State v. Rosenthal
559 P.2d 830, 1977 Nev. LEXIS 462, 93 Nev. 36 (1977)
Rule of Law:
Gaming is a revocable privilege conferred by the state, not a property right, meaning the state may deny license applications without judicial review or strict federal due process standards; however, the automatic revocation of an existing work permit without a separate hearing violates state statutory due process protections.
Facts:
- Frank Rosenthal served as an executive consultant to the Chairman of the Board of Argent Corporation, exercising significant influence over policy decisions for three major hotel-casinos in Las Vegas.
- Due to his influential role, the Gaming Commission directed Rosenthal to submit an application for a gaming license as a 'key employee.'
- Rosenthal submitted the application, describing his duties as advising and supervising corporate standards and policies.
- During the investigation, the Commission discovered derogatory information regarding Rosenthal, including a North Carolina conviction for conspiracy to bribe an athlete.
- Evidence also indicated Rosenthal attempted to bribe a player to fix a 1960 football game and had admitted to corrupting public officials in Florida.
- Based on these findings, the Commission unanimously voted to deny Rosenthal's application for a license.
- As a consequence of the license denial, gaming regulations technically required the automatic revocation of Rosenthal's existing work permit, which would bar him from working in the industry in any capacity.
Procedural Posture:
- The Gaming Control Board voted unanimously to recommend denial of Rosenthal's application.
- The Nevada Gaming Commission voted unanimously to deny the application.
- Rosenthal filed a petition for judicial review in the Eighth Judicial District Court (state trial court).
- The District Court, sua sponte, declared the licensing provisions of the Gaming Control Act unconstitutional for lack of standards.
- The District Court nullified the decision of the Gaming Commission.
- The State of Nevada and the Gaming Commission appealed the District Court's judgment to the Nevada Supreme Court.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
1) Are the licensing provisions of the Nevada Gaming Control Act unconstitutional for lacking sufficient standards? 2) Does the denial of a gaming license application violate federal due process rights? 3) Can the state automatically revoke an employee's existing work permit based solely on the denial of a license application?
Opinions:
Majority - Justice Thompson
No, the statutes are constitutional, and federal due process does not apply to the privilege of gaming; however, Yes, the automatic revocation of the work permit was improper. The Court reasoned that gaming is a privilege reserved to the states under the Tenth Amendment, not a fundamental right protected by the federal Constitution. Therefore, the legislature may grant the Gaming Commission broad discretion to deny licenses to protect the public welfare. The statutory standards ('public interest') combined with administrative regulations regarding character and integrity provide sufficient guidance for licensing. While an applicant for a new license has no property right requiring judicial review, an employee holding an existing work permit possesses a state-created property interest. Therefore, the regulation requiring automatic revocation of a work permit upon license denial conflicted with statutes guaranteeing review for permit revocations. Rosenthal cannot be denied a license, but he retains his work permit until a separate, fair hearing is conducted to revoke it.
Analysis:
This is a seminal case in Nevada gaming law, establishing the 'Nevada Doctrine.' It solidifies the concept that gaming is a 'revocable privilege' rather than a right, effectively shielding the state's regulatory decisions from federal constitutional intervention under the Tenth Amendment. The decision grants the Gaming Commission immense power to exclude individuals from the industry to protect the state's economy and reputation. However, the Court drew a critical line between an applicant seeking a new privilege (who has almost no rights) and a current employee holding a work permit (who has due process rights). This distinction prevents the state from bypassing statutory procedural safeguards when stripping an individual of an existing livelihood, even if they are found unsuitable for a higher-level license.
Unlock the full brief for State v. Rosenthal