The complaints stemmed from incidents in early 2012 when undercover agents at the Moon, Rain, and ghostbar nightclubs at the Palms were provided with prostitutes and drugs by casino employees in exchange for cash on several different occasions.
Various details were included in the 21-page complaint. Hosts and bottle runners at Moon sold cocaine to agents on several different occasions as well as provided escorts for private parties when told that agents were looking for: "...some girls for their party because they wanted to get laid and didn't care how much it would cost."
Palms agreed to pay the fine but did point out in a statement that at the time the clubs were only partially owned by the casino:
"The club venues are owned and operated by NM Ventures LLC and NM Ventures II LLC (collectively Nine Group), which at the time of the investigation were only partially owned affiliates of Palms.
"Additionally, at the time of the investigation, Palms did not employ, direct or control the employees whose actions formed the basis of the allegations of the complaint."
The Palms isn't the first casino to run into trouble of this sort or get hit with big fines.
Several fines over $1 million have been levied in the past and the Hard Rock Hotel agreed to pay a $650,000 fine in 2011 for similar complaints from the Nevada Gaming Control Board of selling drugs in clubs and letting patrons use private restrooms for sex and drug use.
Prostitution is legal in the state of Nevada but only in certain areas, all of which are outside the Las Vegas area.
Palms caters to a younger, trendier crowd than most other casinos in Vegas and uses its numerous clubs as a means to try to lure visitors off the Strip and stay and gamble at Palms.