Las Vegas strip clubs paying-for-customers practice in jeopardy

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LAS VEGAS - As a professional poker player, Steve Graham is no stranger to the idiosyncrasies of Las Vegas. But he couldn't believe it when, during a December visit, he was told cabdrivers would pay passengers for the privilege of dropping them off at the cabbie's topless club of choice.

Then he and four friends discovered for themselves that such deals could be had.

After going from cab to cab at Mandalay Bay, they found a driver who agreed transport them for free, give them each $30 -- $150 total -- in exchange for dropping them at Sapphire gentlemen's club.

Graham said that upon arrival the driver handed them each $30, which covered the club's entrance fee. "I thought I'd heard it all," said Graham, 30, who now lives in Illinois. "It certainly opened my eyes."

The cabdriver, of course, didn't leave the club empty-handed. Las Vegas cabdrivers have long received kickbacks for delivering customers to certain businesses. Such payments from strip clubs currently range "up to $120 per head," according to Las Vegas attorney Al Marquis, who is representing several topless clubs that want the county to crack down on the payments.

No one knows the exact amount of the payments - strip clubs don't exactly hand out 1099 tax forms every time a cabdriver pulls around back to take a kickback. But in a class-action lawsuit filed in June, it was alleged that some clubs pay as much as $100,000 a week to cabdrivers who bring in customers.

But that might be changing.

Clark County Commissioner Larry Brown is asking colleagues to discuss the payments at their meeting next Tuesday. Brown said he agreed to raise the issue after being approached by various "stakeholders."

"I don't have a strong position on it," he said. "I don't even know the scope of the issue. It's just an issue that has tentacles throughout the community."

To be sure, a long line of politicians, club operators and government regulators have taken runs at ending the practice. Some say the first attempt was made in 1965, after some restaurants were found to be paying cabdrivers $2 a head to bring in customers.

"It's been going on forever," said Sheriff Doug Gillespie.

County code banned the kickbacks until March 2006. That's when commissioners voted to repeal part of the code, banning businesses with liquor licenses from tipping or extending "any form of gratuity to a taxicab driver for the delivery of any passengers to the business location."

The parties Marquis represents argue that bounties are bad for Las Vegas. It puts customers in a pressurized situation; cab companies lose control of their drivers, who ignore female customers in favor of male customers. And now massage parlors are starting to pay cabbies for customers, too.

Cab companies hate the practice, said Gordon Walker, Nevada Taxicab administrator, because it causes drivers to focus almost exclusively on customers they think want to go to a strip club. "So it takes (the driver) out of the normal flow of things," Walker said.

As a percentage of all the cab rides in Las Vegas, trips to clubs account for a small share, he said. "But it still takes away from providing better service to locals and the main tourist corridor. I think the fines should be very expensive - $10,000 for a first offense, $20,000 after that."

Marquis has a proposed ordinance that would punish the clubs, not the drivers. It asks for initial fines of $1,000. Three violations in 12 months would result in the revocation of a topless club's license.

Asked if the rising bounties were the reason behind this latest attempt at regulation, Marquis said that had nothing to do with it. "It's just bad business all around," he said.

Taxi union Chief Shop Steward Parker Moffitt of the Industrial Professional Employees Union disagreed. He said the club's rising payouts are exactly why it has become an issue again.

"If they wouldn't have started paying these huge amounts in the first place, it wouldn't be where it is today, we wouldn't have this issue," said Moffitt, a cabdriver for Yellow-Checker-Star. "This was never an issue when the clubs were paying $5, $10 a person."

Moffitt's union of 1,400 is gearing up for a fight.

"We are working people, we make $20,000 to $30,000 a year, so if the clubs can afford to pay someone $70, $80 to $100 a person, how much money are they making off the customers in order to cover that?" he said. "This is never discussed. This should be talked about."

Cabdrivers will show up at the commission meeting Tuesday, he predicted, because "taking our money away is not going to help anybody. How is this going to improve anything for anyone?"

E-mail Joe Schoenmann at joe.schoenmann(at)lasvegassun.com.

(Distributed by Scripps Howard News Service, www.scrippsnews.com.)

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