[Rev. 11/21/2013 11:56:56 AM--2013]

CHAPTER 463B - SUPERVISION OF CERTAIN GAMING ESTABLISHMENTS

NRS 463B.010        Definitions.

NRS 463B.020        “Commission” defined.

NRS 463B.040        “Supervisor” defined.

NRS 463B.050        State policy concerning continued operation of gaming establishment whose license is surrendered, lapsed, suspended or revoked.

NRS 463B.060        Applicability of chapter.

NRS 463B.070        Regulations.

NRS 463B.075        Hearing upon suspension of license regarding appointment of supervisor; notice.

NRS 463B.080        Appointment of supervisor.

NRS 463B.090        Limitations on order of court to stay appointment or enjoin supervisor.

NRS 463B.100        Compensation of supervisor and other persons.

NRS 463B.110        Supervisor subject to gaming laws and regulations; jurisdiction of court over powers and duties of supervisor; effect of appointment of supervisor on license and operation.

NRS 463B.120        Powers and duties of supervisor under gaming license issued by municipality.

NRS 463B.130        Vesting of property interests in supervisor; duty to protect property.

NRS 463B.140        Disposition of certain securities does not affect supervisor.

NRS 463B.150        Duties of supervisor.

NRS 463B.160        Powers of supervisor.

NRS 463B.170        Retention of books, records, evidences of debt and accounts in State.

NRS 463B.180        Order compelling delivery of property to supervisor.

NRS 463B.190        Effect of appointment of supervisor upon obligations of establishment.

NRS 463B.200        Distribution to former legal owner; exceptions.

NRS 463B.210        Reports by supervisor: Filing; inspection.

NRS 463B.220        Sale of gaming establishment by former owner: Conditions; approval of court.

NRS 463B.230        Sale of gaming establishment by supervisor: Time; conditions; approval of court.

NRS 463B.240        Sale of gaming establishment: Notice; transfer of property to buyer; payment of proceeds to former owners.

NRS 463B.250        Objection to suitability of supervisor; petition for account or review of qualifications or performance of supervisor; petition for removal of supervisor or termination of supervision.

NRS 463B.260        Certain circumstances requiring termination of appointment of supervisor.

NRS 463B.270        Limitation on personal liability of supervisor.

NRS 463B.280        Unlawful acts; penalty.

_________

 

      NRS 463B.010  Definitions.  As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 463B.020 and 463B.040 have the meanings ascribed to them in those sections.

      (Added to NRS by 1979, 804)

      NRS 463B.020  “Commission” defined.  “Commission” means the Nevada Gaming Commission.

      (Added to NRS by 1979, 804)

      NRS 463B.040  “Supervisor” defined.  “Supervisor” means the person appointed by a district court as a fiduciary to manage and control a gaming establishment pursuant to this chapter.

      (Added to NRS by 1979, 804)

      NRS 463B.050  State policy concerning continued operation of gaming establishment whose license is surrendered, lapsed, suspended or revoked.  The Legislature hereby finds, and declares it to be the policy of this state, that:

      1.  The stability and continuity of gaming establishments in this state are essential to the State’s economy and to the general welfare of its residents.

      2.  Any closure of a gaming establishment because of a surrender, lapse, revocation or suspension of its license may cause unnecessary financial hardship to its employees, creditors and investors and may have an adverse economic effect on the residents of the community in which it is located and on the State generally.

      3.  Public confidence and trust in the ability of the State to control gaming operations must not be sacrificed by any relaxation of strict controls in particular circumstances merely to permit gaming operations to continue.

      4.  Placing the management and control of a gaming establishment whose license is surrendered, lapsed, suspended or revoked under a competent supervisory official may ensure the proper regulation of the establishment while maintaining its value for its creditors and investors, protecting the interests of other persons, avoiding any disruption of the economy of the community in which it is located, and promoting the general welfare of the State.

      (Added to NRS by 1979, 804; A 1981, 1066; 1991, 1012)

      NRS 463B.060  Applicability of chapter.  This chapter applies only to gaming establishments:

      1.  Having 16 or more slot machines; or

      2.  Having any number of slot machines together with any other game or gaming device.

      (Added to NRS by 1979, 804)

      NRS 463B.070  Regulations.

      1.  The Commission shall adopt regulations pertaining to the administration of gaming establishments by a supervisor and any other matters relating to supervisors which are not inconsistent with this chapter.

      2.  The regulations must be adopted, amended and repealed in conformance with the requirements of chapter 463 of NRS.

      (Added to NRS by 1979, 804)

      NRS 463B.075  Hearing upon suspension of license regarding appointment of supervisor; notice.  The Commission shall hold a hearing within 15 days after the suspension of a license pursuant to NRS 463.311 regarding the appointment of a supervisor. The Commission shall notify the licensee of the meeting and afford the licensee the opportunity to be heard concerning the appointment.

      (Added to NRS by 1985, 1726)

      NRS 463B.080  Appointment of supervisor.

      1.  Except as otherwise provided in subsection 5, if the license of any person whose license is essential to the operation of a gaming establishment:

      (a) Is revoked by the Commission;

      (b) Is suspended by the Commission;

      (c) Lapses; or

      (d) Is surrendered because the gaming establishment or the ownership thereof has been conveyed or transferred to a secured party who does not possess the licenses necessary to operate the establishment,

Ê only the Commission may ex parte petition the district court for the county in which the gaming establishment is located for appointment by the court of a supervisor to manage the establishment. The petition is discretionary with the Commission and this chapter does not create any property right or interest in continued gaming at the establishment.

      2.  The petition must contain the names of two or more persons who the Commission believes are suitable and qualified to manage a gaming establishment and are available for appointment as a supervisor unless, in the opinion of the Commission, only one person is available who is qualified to serve, in which case the Commission may name only that person.

      3.  Upon receipt of such a petition, the court shall appoint as supervisor of the gaming establishment a person who is listed in the petition. The court shall immediately notify the Commission of the appointment. Upon receipt of notice from the court, the Commission shall immediately notify all interested licensees.

      4.  The petition may be presented pursuant to this section even if time has not expired for a petition for judicial review of the final determination of the Commission to revoke or suspend the gaming license.

      5.  The Commission shall not petition any court for the appointment of a supervisor pursuant to this section if:

      (a) The gaming establishment has never been in operation and opened to the public.

      (b) A rehearing has been granted by the Commission to the licensee on the revocation or suspension of his or her license and the rehearing has not been concluded.

      (c) The gaming establishment is, or reasonably appears to be, insolvent.

      6.  If the Commission does not petition for the appointment of a supervisor, no district court of this state may issue an order which allows gaming to continue at the establishment.

      (Added to NRS by 1979, 805; A 1981, 1066; 1987, 189; 1991, 1013)

      NRS 463B.090  Limitations on order of court to stay appointment or enjoin supervisor.  No district court of this state may issue any order:

      1.  To stay the appointment of a supervisor appointed pursuant to this chapter, whether or not a petition has been filed for judicial review of the Commission’s determination to revoke or suspend the license required for operation of the gaming establishment.

      2.  To enjoin a supervisor from exercising the duties and powers of the supervisor pursuant to this chapter.

      (Added to NRS by 1979, 805)

      NRS 463B.100  Compensation of supervisor and other persons.  The court which appoints the supervisor shall allow reasonable compensation, out of the revenue of the gaming establishment, for the services, costs and expenses of the supervisor and for any other persons whom the supervisor may engage to aid the supervisor in the supervisor’s duties.

      (Added to NRS by 1979, 806)

      NRS 463B.110  Supervisor subject to gaming laws and regulations; jurisdiction of court over powers and duties of supervisor; effect of appointment of supervisor on license and operation.

      1.  A supervisor is subject to the provisions of chapter 463 of NRS and any regulations adopted pursuant thereto as if the supervisor were personally licensed to operate the gaming establishment.

      2.  The court which appointed the supervisor has jurisdiction over all powers and duties of the supervisor in any proceeding relating to the exercise of those powers and duties, and may issue any order or decree in the proceeding which it deems necessary.

      3.  After the court appoints a supervisor the gaming license of the establishment shall be deemed transferred and the previously licensed operation shall be deemed a continuing operation.

      (Added to NRS by 1979, 805; A 1991, 1014)

      NRS 463B.120  Powers and duties of supervisor under gaming license issued by municipality.  A supervisor shall be deemed to be a licensee of the gaming establishment under any license issued to operate the gaming establishment by a county, city or town, and may perform all acts that the supervisor is required or permitted to perform without approval or other action of the county, city or town.

      (Added to NRS by 1979, 805)

      NRS 463B.130  Vesting of property interests in supervisor; duty to protect property.

      1.  Upon the appointment of a supervisor, the right, title and interest of all persons in the gaming establishment is extinguished and automatically vests in the supervisor, subject to any liens, claims and encumbrances thereon.

      2.  The supervisor shall protect the money and property so acquired by managing it on a prudent businesslike basis.

      (Added to NRS by 1979, 806)

      NRS 463B.140  Disposition of certain securities does not affect supervisor.  Except as provided in NRS 463B.220, 463B.230 and 463B.240, any sale, assignment, transfer, pledge or other disposition of any securities issued by a former or suspended licensee while a supervisor is appointed does not divest or otherwise affect the powers of the supervisor.

      (Added to NRS by 1979, 806)

      NRS 463B.150  Duties of supervisor.  The supervisor shall:

      1.  Take immediately into his or her possession all property of the gaming establishment, including its money, accounts, books, records and evidences of debts owed to the establishment.

      2.  Continue the business of the gaming establishment.

      (Added to NRS by 1979, 806)

      NRS 463B.160  Powers of supervisor.  The supervisor may:

      1.  Hire, discipline and dismiss employees of the gaming establishment, and fix the compensation of its employees.

      2.  Engage independent legal counsel and accountants.

      3.  Settle or compromise with any debtor or creditor of the gaming establishment.

      4.  Prosecute actions on behalf of or defend actions against the gaming establishment.

      5.  Enter into any contract or borrow money on behalf of the gaming establishment and pledge, mortgage or otherwise encumber its property as security for the repayment of any loan, except that the power to borrow money or encumber property is limited by any provision of an existing document of credit.

      6.  Grant or renew leases of the property of the gaming establishment.

      7.  Perform any other lawful acts on behalf of the gaming establishment which an owner is entitled to perform. This subsection does not authorize sale of the establishment by the supervisor.

      (Added to NRS by 1979, 806)

      NRS 463B.170  Retention of books, records, evidences of debt and accounts in State.  Unless otherwise authorized by the court, if a gaming establishment is under the control of a supervisor:

      1.  All the books and records relating to the operation of the establishment and all evidences of debts owed to the establishment must be kept and retained in the State of Nevada.

      2.  All the money of the establishment which is to be deposited with financial institutions must be kept in accounts in financial institutions located in this state.

      (Added to NRS by 1979, 809)

      NRS 463B.180  Order compelling delivery of property to supervisor.  If any property of a gaming establishment is sold, leased or otherwise conveyed or hypothecated in violation of NRS 463B.280, or if any property of the establishment is withheld from a supervisor after appointment of the supervisor, the supervisor may petition the district court in the district where the gaming establishment is located for an order compelling delivery of the property to the supervisor.

      (Added to NRS by 1979, 809)

      NRS 463B.190  Effect of appointment of supervisor upon obligations of establishment.  This chapter does not affect the right of a creditor to commence or continue foreclosure or other proceedings to collect a secured or unsecured debt, and, consistent with the public policy of this chapter, the appointment of a supervisor must not be treated as an event precipitating a default or acceleration under any note, lease, deed of trust or other extension of credit. Except as provided in this chapter, the supervisor is not entitled to assert any right, claim or defense other than one available to the gaming establishment or any licensee or former licensee connected therewith.

      (Added to NRS by 1979, 806)

      NRS 463B.200  Distribution to former legal owner; exceptions.

      1.  Except as otherwise provided in subsection 2 and subject to prior approval by the court which appointed the supervisor, a supervisor may, consistently with regulations to be adopted by the Commission, make periodic distribution of earnings to the former legal owner of the gaming establishment.

      2.  Upon petition to the court by the Commission, earnings that would otherwise be distributed pursuant to subsection 1 must, except as otherwise provided in this subsection, be paid into the court pending judicial review of the final determination of the Commission. An amount of the earnings which represents the reasonable rental value of the premises must be retained by the supervisor for distribution to the former legal owner. If the Commission has ordered suspension or revocation of a license and:

      (a) The Commission’s order of suspension or revocation is upheld after final judicial review; and

      (b) The gaming establishment is sold pursuant to this chapter,

Ê all earnings, except the amount representing the reasonable rental value of the premises as determined by the court, which were paid into the court pursuant to this subsection are forfeited and must be deposited in the State General Fund. If that order is reversed or otherwise modified and the former legal owner regains his or her license, the earnings must be distributed to the former legal owner.

      (Added to NRS by 1979, 807; A 1985, 804; 1991, 1014)

      NRS 463B.210  Reports by supervisor: Filing; inspection.

      1.  A supervisor shall file with the court which appointed the supervisor and the Commission reports on the administration of the gaming establishment in such form and at such intervals as the court may prescribe.

      2.  The reports may be made available for inspection by any creditor of the establishment or person having a substantial interest in it, and the court may direct that copies of the reports be mailed to those creditors or persons.

      (Added to NRS by 1979, 807)

      NRS 463B.220  Sale of gaming establishment by former owner: Conditions; approval of court.  If:

      1.  Any person who owned an interest in a gaming establishment at the date of appointment of a supervisor thereof secures a willing and able buyer for the establishment before the time when the supervisor must offer the property for sale pursuant to NRS 463B.230;

      2.  The persons who owned a majority of the interest in the establishment on the date of the supervisor’s appointment approve the terms and conditions of the proposed sale; and

      3.  The buyer obtains a license to operate the establishment within 6 months after the time when the supervisor must offer the property for sale pursuant to NRS 463B.230,

Ê the supervisor shall petition the court which appointed the supervisor for approval of the sale, providing notice to parties as the court may direct, and, if the court grants approval, shall carry out the sale on the terms and conditions agreed to between the parties.

      (Added to NRS by 1979, 807)

      NRS 463B.230  Sale of gaming establishment by supervisor: Time; conditions; approval of court.

      1.  Except as provided in subsection 2, the supervisor of a gaming establishment shall offer the gaming establishment for sale:

      (a) At any time before the time described in paragraph (b), (c) or (d), when requested in writing by the owners of a majority of the equity interest in the establishment to initiate sale proceedings;

      (b) Six months after refusal by the Commission to renew the license for the establishment for failure of a licensee to fulfill a condition of his or her license;

      (c) If no petition for judicial review is taken from the determination of the Commission to revoke or suspend the license, 6 months after the last date on which a petition for judicial review could have been filed; or

      (d) If a petition for judicial review is taken, 6 months after exhaustion of any right of appeal in the courts of this state resulting in a final determination which upholds the revocation or suspension of the license,

Ê whichever date is later.

      2.  The supervisor shall not offer the gaming establishment for sale if a timely sale of the establishment has been consummated pursuant to NRS 463B.220.

      3.  The supervisor shall exert his or her best efforts to secure a buyer for the gaming establishment, including advertising, to assure a fair price. The supervisor may employ brokers and other persons to assist the supervisor in securing a suitable buyer.

      4.  A supervisor shall not accept any offer to purchase the gaming establishment made by a person who does not possess a license issued pursuant to chapter 463 of NRS which would permit the person to operate the establishment, except that the supervisor may accept an offer which is contingent upon the buyer’s procuring such a license.

      5.  The supervisor shall petition the district court which appointed the supervisor for approval of the terms and conditions of the sale. If the court approves the sale, the supervisor shall, if the buyer obtains a license to operate the establishment, consummate the sale.

      (Added to NRS by 1979, 807)

      NRS 463B.240  Sale of gaming establishment: Notice; transfer of property to buyer; payment of proceeds to former owners.  The following provisions apply to any sale of a gaming establishment pursuant to this chapter:

      1.  All known creditors and other persons designated by the court who are known to have had a legal ownership interest in the gaming establishment immediately prior to the appointment of the supervisor must be notified of the proposed sale at least 30 days before the hearing on the petition for approval of the sale. The notice must be delivered personally or sent by registered or certified mail to the last known address of each such person. The court shall also order that notice be published in a newspaper of general circulation in the county in which the establishment is located. If the address of a creditor or owner is not known, or personal service is not possible for some other reason, service by publication shall be deemed adequate. Any person so notified may file with the court a statement of objections to the proposed sale, including all grounds for the objections no later than 10 days before the hearing.

      2.  Upon completion of a sale pursuant to this chapter, the appointment of the supervisor terminates, except that the supervisor shall convey all his or her right, title and interest of the supervisor in the property of the gaming establishment to the buyer and shall pay the net proceeds of the sale to those persons who owned the property at the time he or she acquired it, or their successors or assignees, according to their respective interests.

      (Added to NRS by 1979, 808)

      NRS 463B.250  Objection to suitability of supervisor; petition for account or review of qualifications or performance of supervisor; petition for removal of supervisor or termination of supervision.

      1.  Any person who suffers or is likely to suffer direct financial injury as the result of an act or omission of a supervisor may file an objection with the Commission to the suitability of the supervisor.

      2.  Any person described in subsection 1 may petition the district court which made the appointment for an accounting or for a review of the supervisor’s qualifications or performance.

      3.  If at any time the district court finds that a supervisor is not qualified or available to serve as supervisor, it shall request from the Commission the names of two or more persons who the Commission believes are suitable and qualified to manage a gaming establishment and are available to serve as a supervisor unless, in the opinion of the Commission, only one person is available who is qualified to serve, in which case the Commission may name only that person.

      4.  The Commission may, at any time after the appointment of a supervisor, petition the court for the removal of the supervisor and the appointment of a new supervisor or for the termination of the supervision.

      (Added to NRS by 1979, 807; A 1991, 1014)

      NRS 463B.260  Certain circumstances requiring termination of appointment of supervisor.  The appointment of a supervisor terminates if any court of this state or of the United States overrules the Commission’s decision to revoke or suspend the license for operation of the gaming establishment, or if the Commission’s petition for termination is granted, except that the supervisor shall transfer to the appropriate persons their respective interests in the establishment.

      (Added to NRS by 1979, 809)

      NRS 463B.270  Limitation on personal liability of supervisor.  A supervisor is not personally liable for:

      1.  Any secured or unsecured debt of the gaming establishment incurred before, during or after the supervisor’s appointment.

      2.  Any penalty which may be assessed against a former licensee for the supervisor’s failure to pay or the late payment of any license fee or tax levied pursuant to chapter 463 of NRS.

      3.  Any act or omission made by the supervisor in the exercise of prudent business judgment or pursuant to an order of any court.

      (Added to NRS by 1979, 806)

      NRS 463B.280  Unlawful acts; penalty.

      1.  It is unlawful for a person during the pendency of any proceeding before the Commission which may result in the appointment of a supervisor or during the period of supervision:

      (a) To sell, lease or otherwise convey for less than full market value or to hypothecate any property of a gaming establishment.

      (b) To remove from this state or secrete from the Commission or the supervisor of a gaming establishment any property, money, books or records of the establishment, including evidences of debts owed to it.

      2.  A person who violates any provision of subsection 1 is guilty of a category D felony and shall be punished as provided in NRS 193.130.

      (Added to NRS by 1979, 809; A 1995, 1295)