Fifth Street Gaming is facing scrutiny from Nevada regulators over tax and audit violations. These issues will be addressed at an upcoming meeting of the Nevada Gaming Commission when it considers limiting sportsbook revenue at Fifth Street’s North Las Vegas property.
Fifth Street owns Ojos Locos Sports Cantina Y Casino, previously known as the Lucky Club. When the Nevada Gaming Commission meets Nov. 20, they will consider a recommendation by the Nevada Gaming Control Board that would limit the operator’s share of sportsbook revenue with Boomer’s Sportsbook for two years and require it to come back for further approval. Boomer’s, on track to be the new sportsbook operator at the casino pending Commission approval, is unaffected by the limitation.
Ojos Locos General Manager Robert Wright was questioned by the Board, which didn’t provide many details of the tax and audit issues that date back to a 2023 letter sent by regulators.
Wright said most of those 2023 dealt with the live-entertainment tax. He said they updated their auditing system and closed the Silver Nugget that allowed for more oversight of the property. “There were a bunch of changes in the company and the accounting. All of those things have been addressed.”
Board Chairman Mike Dreitzer said a review this year “brought about a whole host of additional matters, including the one recurring matter relating to accounting records. Why was that not addressed when it was brought to your attention in 2023?”
Wright responded that they upgraded their systems, including the one for slot machines, remodeled Ojos Locos, and closed the Silver Nugget.
“When you’re upgrading the slot system, you don’t have a count room and the online system isn’t working. Most of the records problems were during the timeframe when we were being remodeled” in late 2022 and early 2023.
Wright said one problem centered around a controller using the actual slot win instead of another method that includes free play. That system has been corrected and the property changed to a more experienced auditor.
Dreitzer cited additional violations and concerns about the volume of violations — records retention, internal control policies, mandatory count procedures, and gross revenue computations. “I understand that some of these relate to the time period in question, but these are pretty serious matters that need to be addressed in full. Would you agree?”
Wright responded 100%. He said he’s checking on all of those concerns every month to ensure it balances while the controller has taken a more active role.
While Wright said the issues are settled, Dreitzer responded that the 2025 letter includes more issues disputing that. “You have a pattern going back now over the course of four years where there is concern over policies that don’t meet the standard of what we expect from our licensees.”
Wright said that he now checks every item and with the closure of the Silver Nugget, he can be more active in accounting, rather than just operations.
“This is a fair amount of data and responsibility to fall on your shoulders in a direct way,” Dreitzer said.
Wright said the key is the new auditor; the controller’s training has also been increased.
Dreitzer didn’t let up. He said there were breakdowns the property is trying to deal with, but the letter from a couple of months ago brings up substantial items that need to be addressed.
“I support the application, but it’s hard for me to say the burden has been met when these matters and their extent are so new,” Dreitzer said in proposing a two-year limitation to give time for another review with the expectation the violations would be solved. “I want you to use this time to continue to improve. I appreciate what you are doing, but it feels like it’s not quite set and you’re still trying to figure things out. You need time to get it set and for it to gel … and meet the standards we expect from our licensees.”
When asked about the Silver Nugget closure, Wright told Dreitzer that they’re still trying to figure out the “big picture for the property” in North Las Vegas. It was an old building and the plan is to reopen at some point.
Fifth Street also operates the Downtown Grand in Las Vegas.