Adopting Gaming Regulations to Address Critical Social Issues: Sexual Harassment Prevention and Beyond

From the earliest age, in societies and cultures around the world, girls are taught to ignore sexual harassment as they go about their business. Women cannot walk down streets, use mobile devices, attend school, go to work, or be in a relationship without the risk of being subjected to sexual harassment and/or sexual misconduct. Faced with economic realities and the necessity to provide for themselves and their families, women simply continue to do what they have been predisposed to do from childhood: ignore sexual harassment and abuse.

In a multi-country study ¹ from the Middle East and North Africa, between 40% and 60% of women said they had experienced street-based sexual harassment. This includes sexual comments, stalking, following, staring, and/or ogling. ²

One in 10 women in the European Union report having experienced cyber-harassment as early as the age of 15. This constitutes the receipt of unwanted, offensive sexually explicit emails or text messages, or offensive, inappropriate advances on social networking sites. ³

Approximately 15 million adolescent girls, aged 15 to 19, worldwide admitted they have been sexually victimized. As horrific as that statistic is, what is truly devastating is that as of 2017 only one percent ever sought professional help. ⁴

Results from a national Australian survey show that almost two out of five women (39%) aged 15 and older who have been in the workforce in the last five years have experienced sexual harassment in the workplace. ⁵

In the majority of countries with available data, less than 40% of the women who experience violence seek help of any sort. Those who do, look to family and friends instead of police and/or health services. Less than 10% of women seeking help sought help from the police. ⁶

Sobering isn't it! From the work done by Women of Diversity, we know that in Nevada, women are increasingly the primary breadwinners in their households. ⁷

Armed with this knowledge about sexual harassment, sexual misconduct, and sexual assault, why is anyone surprised that women who face sexual harassment and/or sexual misconduct in the workplace don't recognize it what it for what it is, are unaware of available resources, and fail to report it?

To be sure, protections have been put into place. At least 144 countries have passed laws on domestic violence, and 154 have laws on sexual harassment. However, even when laws exist, this does not mean that countries are always compliant with international standards and recommendations or that the laws are implemented. ⁸

Using the U.S. as an example, the Civil Rights Act of 1964, ⁹ a piece of landmark legislation prohibiting discrimination based on race, color, religion, sex, or national origin, is supposed to provide protection to members of vulnerable populations. Despite the 54 years since these protections against sexual harassment and sexual misconduct have been in place, allegations and/or evidence of sexual misconduct from somewhere within the U.S. is in the news almost daily.

A sample of U.S. headlines in the past year or so include:

“Disabled Woman Raped at Hacienda Healthcare, Was Likely Pregnant Before” ¹⁰

“Art Briles, Who Was Fired Amid a Sexual Assault Scandal at Baylor, Has Been Hired to Lead an East Texas High School Football Program” ¹¹

“Crisfield High School Nurse Arrested on 19 Sex Offense Charges” ¹²

“Professor Who Accused Virginia Lt. Gov. Justin Fairfax of 2004 Sexual Assault Issues Statement Detailing Alleged Incident” ¹³

“Who Is Christine Blasey Ford the Woman Accusing Brett Kavanagh of Sexual Assault?” ¹⁴

“Prominent Harvard Professor Placed on Leave Following Accusations of Decades of Sexual Harassment” ¹⁵

“Harvey Weinstein to Take “Leave of Absence” as Sexual Harassment Allegations Surface” ¹⁶

On January 12, 2018, it was announced that I had been appointed to be the first female to chair the Nevada Gaming Control Board (NGCB). The NGCB is charged with protecting the integrity and stability of Nevada's multi-billion dollar gaming industry. It governs the gaming industry through Nevada's stated legislative public policy of requiring the “strict regulation of all persons, locations, practices, associations and activities related to the operation of licensed gaming establishments and the manufacture or distribution of gambling devices and equipment.” ¹⁷

On the morning of my fifth day as chair of the NGCB, the following headline popped up on my computer screen: “Dozens of People Recount Pattern of Sexual Misconduct by Las Vegas Mogul Steve Wynn.” ¹⁸

Almost immediately the NCCB began reviewing the allegations and opened an investigation. ¹⁹ Within days, an electronic portal to facilitate communication with the public was launched. ²⁰ Ultimately, that investigation concluded about a year later, and other than the public complaint that was filed with the Nevada Gaming Commission, the investigation and its processes are confidential.

From time to time, the NGCB has found it appropriate to regulate certain social issues such as problem gambling, ²¹ patron dispute processes, ²² club venues, ²³ and medical marijuana. ²⁴ On occasion, when confronting important social issues, the NGCB has sought additional clarity and authority regarding Regulation 5. ²⁵ On March 1, 2018, drawing on the same provisions of Regulation 5 the Board had relied on to address the challenges associated with club venues, the Board issued an Industry Notice regarding “Verification of Policies, Procedures and Training Related to Sexual Harassment in the Workplace—Minimum Standards.” ²⁶

Many have argued and continue to argue that Regulation 5 as presently constituted is all that is needed to effectively regulate the gaming industry. Regulation 5 is broad and provides the Nevada Gaming Control Board with significant regulatory authority.

The need to address sexual harassment issues in the gaming industry was presented years ago. In fact, almost a decade ago. These first public indicators of sexual harassment and sexual misconduct within the gaming industry were made manifest in 2009. Those circumstances were public, reflected poorly on the state of Nevada, and resulted in licensee disciplinary action. However, the lens through which this alleged misconduct was viewed was much smaller, less obvious, and was not part of a worldwide movement for reform.

On July 9, 2009, the Nevada Gaming Control Board filed a complaint against Opbiz, LLC dba Planet Hollywood Resort & Casino. ²⁷ The complaint contained nine counts, and counts four and five are especially relevant.

Count 4

Paragraph 41 of the complaint reads: “There have been a number of allegations from Privé patrons that employees of Privé have assaulted and/or battered, both physically and sexually, the patrons.”

Count 5

Paragraph 46 states: “There have been many assaults and/or batteries and/or altercations between patrons of Privé including at least one instance of alleged sexual assault.”

Paragraphs 42 and 47 allege: “PH knew, or should have known, about this conduct and failed to take action to prevent it from occurring.”

Paragraphs 43 and 48 conclude: “By itself and/or in conjunction with the actions contained in the other counts of this complaint, this failure to prevent the above reflects or tends to reflect poorly on the reputation of gaming in the State of Nevada and/or acts as a detriment to the development of the gaming industry and/or reflects or tends to reflect discredit upon the State of Nevada or the gaming industry.”

Paragraphs 44 and 49 list the alleged violations: “PH's acts and failures to act as set out above are a violation of Nevada Gaming Commission Regulations 5.010 and 5.011(1) and (10). This constitutes an unsuitable method of operation, and, as such, is grounds for disciplinary actions. See Nev. Gaming Comm'n Regs. 5.010(2), 5.011 and 5.030.”

In the stipulation for settlement and order, dated the same day, in paragraph 1, the licensee admitted each and every allegation set forth in the complaint. ²⁸

In 2009, disciplinary proceedings dealing with club venue issues relied on gaming regulations 5.010, Methods of Operation; 5.011, Grounds for Disciplinary Action; and 5.030, Violation of Law or Regulations.

Still faced with a variety of challenges from club venues, six years later, during the 2015 legislative session, former Gaming Control Board Chair A.G. Burnett specifically asked for the ability to regulate club venues despite the very broad and “all-encompassing” provisions of Regulation 5. ²⁹ The legislature enacted Nevada Revised Statute § 463.15999 allowing the Commission to establish regulations for the “registration of club venue employees and matters associated therewith.”

By November of 2015, the Commission adopted 12 sections of regulations, 5.300–5.380, concerning club venues, many of which go well beyond registration:

Regulation 5.310 requires that “[a] licensee shall designate at least one of its employees to monitor club venues at its establishment.”

Regulation 5.330 requires regular assessment of entertainment and events within club venues. It also imposes surveillance standards on club venues.

Regulation 5.335 imposes medical staffing requirements.

Regulation 5.340 requires that independent hosts have written agreements.

Regulation 5.360, required policies and procedures:

Establishes that licensees with a club venue have “written policies and procedures for club venues that seek to foster the public health, safety, morals, good order, and general welfare of the patrons.” ³⁰

Allows the Board and Commission to consider the following factors to determine whether or not a licensee has established the appropriate policies and the extent to which:

▪

a licensee or club venue operator has “a written policy detailing the standard of conduct for club venue operations, and the extent to which the licensee or club venue operator informs the club venue employees” of the policy; ³¹

▪

“the licensee or club venue operators conducts regular meetings with club venue employees, independent host … to discuss club venue policies and daily operating, security and safety concerns;” ³²

▪

“licensees or club venue operator's management is actively involved in the oversight … in initial and continued training of club venue security and employees and management's active participation in monitoring club venue activities; ³³ and

▪

“club venue management, employees and security staff receive training with regard to ensuring the safety of all employees and guests. Such training topics should include, but not be limited to, sexual assault … ;” ³⁴

Later in his testimony, Chair Burnett also said, “At the end of the day, the licensed gaming establishment's license is at risk, and if improper activities occur, even in a nightclub when it is located on the premises of the gaming establishment, that puts the gaming operator's license in jeopardy.” ³⁵ It is evident from the regulations that were created for club venues that Regulation 5 and its general provisions are not nearly specific enough.

As of March 1, 2018 all Nevada gaming licensees were put on notice that the NGCB was interested in better understanding the issues involved in sexual harassment and sexual misconduct as they pertain to the gaming industry. Though matters pertaining to these topics are difficult, complex, and multifaceted, thoughtful inquiry and respectful dialogue with community stakeholders is necessary and healthy.

Feedback on the regulations began to filter into the NGCB from private citizens, women's groups, college professors, attorneys practicing in the area of sexual harassment, Nevada state agencies, union members, employees detailing their experiences of sexual harassment while working in the gaming industry, the Nevada Resorts Association (an industry advocate for gaming in Nevada), nonrestricted and restricted licensees, sportsbook operators, gaming manufacturers, and others, all of whom shared how the proposed regulations would affect them.

In April it was decided that the Verification of Policies, Procedures and Training Related to Sexual Harassment in the Workplace—Minimum Standards should be converted into a written regulation. In May, the NGCB began holding a series of workshops as a forum for open discussion throughout Nevada. The workshops were noticed for discussion purposes so that participants could participate without fear that the NGCB would take action before everyone could be heard. The Board members listened carefully to the comments and suggestions that were made, took them into consideration, and crafted some changes to the proposed sexual harassment prevention regulations.

There was a diversity of opinion. Not surprisingly, some were of the opinion that the breadth of Gaming Regulation 5 was adequate to allow the NGCB to discipline any matters affecting gaming licensees. Nevada Gaming Regulation 5.011, which lays out the grounds for disciplinary action, is all that is necessary, it is argued because it is a broad grant of authority and could cover a range of conduct:

Regulation 5.011 allows “[t]he Board and the Commission to deem any activity on the part of any licensee, the licensee's agents or employees, that is inimical to the public health, safety, morals, good order and general welfare of the people of the State of Nevada, or that would reflect or tend to reflect discredit upon the State of Nevada or the gaming industry, to be an unsuitable method of operation and shall be grounds for disciplinary actions . … ”

Subsection 10 of Regulation 5 states that a licensee can be subject to discipline for “[f]ailure to conduct gaming operations in accordance with proper standards of custom, decorum and decency, or permit[ting] any type of conduct in the gaming establishment which reflects or tends to reflect on the repute of the State of Nevada and act as a detriment to the gaming industry.”

Others felt that specific regulations for sexual harassment prevention were long overdue.

I believe the reason there were two distinct schools of thought largely centers on the reality that a Nevada gaming license is a privileged license and no property rights attach to it. If a regulatory body, such as the NGCB, has regulations proscribing or prohibiting certain behaviors or activities, then a gaming licensee could be disciplined or even lose its license.

At about the same time as the NGCB was proposing sexual harassment regulations and conducting workshop hearings, other jurisdictions were having similar conversations and establishing similar requirements.

Maryland

On April 2, 2018, HB 1596 was amended to require employers with 50+ employees to submit a survey to the Maryland Commission on Civil Rights. The surveys are required to contain, among other things, the number of settlements made by or on behalf of the employer of an allegation of sexual harassment by an employee.

New York

Effective since October 8, 2018, all businesses in the state of New York to are required to have the New York model sexual harassment policy in place or revise their existing policy to equal or exceed the minimum standards provided by the model. New York also requires every employer to either adopt the New York model sexual harassment complaint form or draft its own form.

The NGCB proposed sexual harassment prevention regulations requiring all gaming licensees regardless of the number of employees to meet or exceed the NGCB proposed minimum standards. The initial forms released by the NGCB as part of its Industry Notice contained a complaint form.

Michigan

The Michigan Gaming Control Board requires that licensees notify the Board of law suits or settlements, including sexual harassment.

Other Gaming Jurisdictions

Regulators from other gaming jurisdictions have indicated they are going to consider how to address sexual harassment prevention at the regulatory level.

After months of refining the proposed regulations and checklist, the Board held its last workshop in November in Las Vegas. But unlike the previous workshops, this workshop was noticed for possible action. It seemed that finally, after countless conversation and revisions, a consensus had developed that Nevada needed to adopt specific regulations concerning sexual harassment prevention within its gaming regulations.

One by one, well respected stakeholders in the gaming industry and the community stood in support of the proposed regulations, including: Governor and First Lady Sandoval; Patricia Becker, the first female member of the Nevada Gaming Control Board; Jan Jones Blackhurst from Caesars Entertainment; Kim Barker Lee from IGT; Marlene Adrian and Denise Duarte from Women of Diversity Production's Gaming Gender Equality Index; Professor Ann McGinley of the Boyd School of Law, and many others. They urged the NGCB to recommend the Verification of Policies, Procedures and Training Related to Sexual Harassment in the Workplace—Minimum Standards for consideration and approval by the Nevada Gaming Commission (NGC).

The NGCB voted unanimously to recommend the proposed regulations for consideration and adoption by the Nevada Gaming Commission. Nevada was on the verge of sending the message that gaming regulators were concerned about sexual harassment and would not tolerate it.

My last day working at the NGCB, a Friday, ended when Wynn Resorts, Limited settled the NGCB's complaint regarding allegations of sexual misconduct. ³⁶

Despite 54 years of prohibition, sexual harassment continues to be pervasive in the U.S. workplace regardless of industry. Currently, there is a worldwide crisis—one of unrelenting sexual harassment and sexual misconduct. It is critical to continue to look for ways to more productively address these issues. The proposed regulations, Verification of Policies, Procedures and Training Related to Sexual Harassment in the Workplace—Minimum Standards, recommended to the NGC last November are a proactive, productive process by which concerns related to sexual harassment can appropriately be addressed.

Regrettably, the sexual harassment laws of the United States and many other nations have consistently failed women for decades, so why create new regulations? Won't they just be ignored? The short answer is no because they would serve as a tool of compliance to require appropriate behaviors in an industry that depends upon a privileged license to operate. Much like the challenges licensees have had and will continue to experience with regard to club venues, I believe sexual harassment prevention requires a separate set of regulations within Regulation 5. Regulation designed to address social issues can be necessary and appropriate when taking into account the context of the circumstances in which solutions to those social issues must be found. As broad as Regulation 5 appears to be in terms of regulating the operation of gaming establishments, it is not nearly specific enough to appropriately regulate critical social issues.

As has been the case in the U.S. for 54 years, sexual harassment laws are employee facing. In other words, those laws create workplace standards and an adjudicatory structure for when those standards are violated. The regulations the NGCB crafted, would, for the first time that I am aware of, require employers to certify their compliance with the law. And that dramatically changes the process.

Despite the actions on behalf of the NGCB, other jurisdictions have been more proactive on sexual harassment and sexual misconduct than Nevada. Rather than leading on these issues, Nevada is now in a position of trying to keep up or catch up. At present the proposed regulations dealing with sexual harassment rest with the NGC. Regulation 2.030 allows, “any member of the Commission to place an item on a Commission agenda for consideration by the entire Commission.” It is my hope that the NGC will take up and pass the sexual harassment prevention regulations that were unanimously recommended to them by the NGCB almost one year ago. It's October and time keeps moving!