ATLANTIC CITY, N.J. (AP) -- Not everything that happens in Vegas stays in Vegas.
Caesars Entertainment has agreed to pay New Jersey casino regulators $225,000 to settle a case arising from the way company officials handled a high-roller in Las Vegas who became involved in a sex, drugs and gambling scandal.
None of the conduct took place in New Jersey. But, company officials are also licensed here and subject to the requirements of New Jersey law governing sound judgment and proper business operation. Caesars Entertainment owns Harrah's Resort Atlantic City; Caesars Atlantic City; Bally's Atlantic City and the Showboat Casino Hotel here.
The state says the Nevada case involved "inappropriate behavior and arguably illegal activities" on Caesars premises on the part of a valued high-roller.
The case involved Terrance Watanabe, a Nebraska businessman who lost as much as $200 million at Caesars Palace and the Rio Hotel Casino in Las Vegas in 2007. He was indicted by a grand jury for failing to pay $14.7 million in gambling debts, but later settled with the company and the criminal charges were dropped.
Watanabe sued Caesars, saying the company gave him alcohol and pain killers without a doctor's prescription, rendering him incapable of gambling responsibly.
New Jersey regulators also said Caesars violated its own policies against sexual harassment by not protecting its employees from inappropriate advances from the player.
"Senior management did not respond appropriately to allegations that the player possessed and used illegal drugs on (Caesars) property, (and) engaged in inappropriate sexual conduct in the presence of (Caesars) employees and made inappropriate sexual advances toward (Caesars) employees," according to a report by an investigative firm hired by the casino company.
The firm said as many as 15 people saw the gambler use marijuana or cocaine on casino premises, but rejected his claims that the casino provided him the drugs.
There was no immediate comment Monday from Caesars Entertainment or the attorney who represented Watanabe in his dealings with the casinos.
Despite the fact that all this activity took place in Nevada, New Jersey regulators said Caesars conduct, if left unchallenged, "might reflect on the reputation of the state of New Jersey" and bring discredit to the casino industry.
The settlement was reached March 7 and made public Monday.
New Jersey used the same principles to question MGM Resorts International, the half-owner of Atlantic City's Borgata, over its dealings in the Chinese enclave of Macau, in a case still working its way through regulators. MGM initially chose to give up its 50 percent stake in the Borgata rather than cut ties with Pansy Ho, its partner in a Macau casino.
New Jersey regulators cited allegations that Ho's father, Asian gambling magnate Stanley Ho, has ties to Chinese criminal gangs — something which both Hos deny. MGM recently petitioned New Jersey to reconsider the matter, saying Pansy Ho's stake in the casino has lessened, and her father's health has deteriorated.
Wayne Parry can be reached at http://twitter.com/WayneParryAC