Mandalay Bay Fined $500 Thousand in 2012 Drug and Prostitution Sting

The Mandalay Bay Resort agreed to pay a $500,000 fine after its employees were caught by undercover law enforcement officers in a sting operation. The casino’s employees provided drugs and prostitutes to the undercover officers

This past week, the Nevada Gaming Control Board proposed the $500k settlement, which Mandalay Bay agreed to pay. The fine agreement is still awaiting approval by the Nevada Gaming Commission.

According to the arresting authorities, Las Vegas undercover police officers purchased ecstasy, cocaine, and other drugs from Mandalay Bay while at the House of Blues Foundation Room (inside the resort) during the summer of 2012. Police officials say staff also provided four prostitutes and a private room for the undercover agents. The sting ended with the arrest of 10 employees and 5 non-employees engaging in illegal activity.

MGM Resorts Releases Statement

The executives at MGM Resorts, the parent company of Mandalay Bay, did not contests the police findings. They complied with the investigation and agreed to the fines assessed by the Gaming Control Board. All employees caught in the operation were fired. Also, casino management says the high dollar lounge has increased training for its staff, so future misconduct will not happen.

MGM Resorts released a statement on the case, saying, “House of Blues has increased its compliance and training procedures and reemphasized its zero tolerance for inappropriate conduct.

The statement also explained Mandalay Bay’s explanation for the incident, saying, “While these activities took place outside our knowledge, we acknowledge our responsibility, as landlords, to monitor all nightclub and ultra-lounge operators at our resorts. The intolerable activities discovered by investigators are obviously completely contrary to the type of luxury resort our company strives to run.

Besides paying the fine, the gaming company also agreed to reimburse the Las Vegas Police Department $17,000 for investigation fees.

The investigation began after an undercover officer bought cocaine off a man inside the Mandalay Bay, who was later determined to have been an employee of the Foundation Room. This led to a wider investigation in which the other transactions took place. Authorities say most of what happened took place in the public areas of the Mandalay Bay Resort.

Two arrests took place in the case, though arrests may have been delayed to avoid disrupting the operation of the lounge. Gaming Control Board Enforcement Chief Karl Bennison says the authorities take these crime seriously. When asked about the nature of the sting operation, Bennison said, “You’re trying to see how far up the management chain things are being directed.

Palms Casino Sting in 2012

The activities uncovered in the investigation are a part of policing any area where people come for entertainment and a lot of money changes hands. The Mandalay Bay sting was similar to one conducted by local authorities and state gambling regulators in 2012 at the Palms Casino Resort, which is found west of the Las Vegas Strip. In the Palms case, employees accepted payments to procure cocaine, pain medication, and prostitutes.

In spring 2013, gambling regulators sent a letter to all the Las Vegas area casinos, asking them to take special precautions to end or curtail illegal activities inside their gaming complexes. The letter asked for the management at these various resorts to investigate potential criminal activity in the clubs and pool areas of their hotels.

House of Blues Foundation Room

The Foundation Room is a chic club and restaurant found on the 43rd floor of Mandalay Bay Resort on the Las Vegas Strip. Besides the restaurant, the Foundation Room has an exotic lounge, seven private rooms, and banquet space. Private rooms include the Buddha and Ganesh Prayer Rooms, as well as the Gothic and 1856 rooms. A dress code exists, so patrons wearing shorts, sandals, sweatshirts, tank tops, athletic shoes, and other casual attire are not allowed into the area. The dress code is enforced on guests, aswell.

This is not the only such lounge at Mandalay Bay, though it has the best view of the Vegas Strip of the bunch. Other nightlife includes the Evening Call, Eyeandy Sound Lounge, Fat Tuesday, Mix Lounge, Mizuya Lounge, and Orchid Lounge.

About Cliff Spiller

Cliff Spiller has been an online writer for 14 years. He worked for Small World Marketing for a decade, where he covered topics like gaming, sports, movies, and how-to guides. Since 2014, he has blogged about US and international gambling news on,, and

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