KVIG Informative

Nevada’s gaming law has required anyone with a stake in a casino to disclose it to state regulators since the state began licensing casino owners at all. Two men ignored that requirement at the Frontier Hotel in the 1960s, and the federal case that followed still shapes how Nevada polices hidden casino ownership six decades later.

Anthony Zerilli and Michael Polizzi secretly acquired an ownership interest in Vegas Frontier, Inc. in 1966 and 1967, according to the U.S. Court of Appeals for the Ninth Circuit’s opinion in United States v. Polizzi. Vegas Frontier, Inc. operated the Frontier Hotel on the Las Vegas Strip, which reopened under a rebuilt structure and a new Nevada gambling license in July 1967.

Neither Zerilli nor Polizzi disclosed that interest to Nevada gaming regulators, the appellate court found. State law required disclosure of any direct or indirect interest in a licensed gaming operation, a requirement the court said reached anyone holding administrative, policymaking or supervisory authority over the business, not only the people named as officers or shareholders on paper.

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Vegas Frontier, Inc.’s public filings listed other men as its officers and shareholders while Zerilli and Polizzi held their undisclosed interest, according to the same opinion. That gap between who the paperwork named and who actually held a stake in the operation became the basis for a federal criminal case.

A federal grand jury charged Zerilli, Polizzi and co-defendants with conspiring to violate the Travel Act, 18 U.S.C. § 1952, by using interstate travel and facilities to promote a business enterprise built on the concealed Nevada gaming interest. Prosecutors also charged substantive violations of the same statute, according to the Ninth Circuit’s opinion.

A jury convicted the defendants, and the Ninth Circuit affirmed the convictions on April 30, 1974, modifying its opinion on July 18, 1974, according to the published decision. The case is cited today as United States v. Polizzi, 500 F.2d 856.

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Vegas Frontier, Inc. sold the Frontier Hotel to Howard Hughes in November 1967, four months after the rebuilt hotel opened under the concealed ownership arrangement, according to the Ninth Circuit’s opinion.

The disclosure requirement Zerilli and Polizzi violated still governs Nevada gaming today. State law requires applicants for a gaming license, registration or finding of suitability to disclose the interests the Nevada Gaming Control Board and Nevada Gaming Commission need to evaluate, according to Nevada Revised Statutes 463.339. Separate provisions of that same chapter require individual licensing of corporate officers, directors and other persons with influence over a gaming operation, according to NRS 463.530 and NRS 463.5735.

Wynn Resorts bought the 34.6-acre parcel that once held the Frontier Hotel in 2017 for $336 million, and the Clark County Zoning Commission has since extended the company’s approval to build an 1,100-room resort tower there, with a construction deadline of April 2026, according to county zoning records. No groundbreaking on the site has been confirmed.

Zerilli and Polizzi answered for the interest they hid at the Frontier with federal convictions that took eight years to become final. Whichever company eventually breaks ground on the same 34.6 acres will do it under a disclosure regime built specifically so Nevada regulators never again have to learn who really owns a casino from a federal indictment instead of a license application.