SBE Head Gives Up Control of Vegas Hotel After Admitting Drug Use
Sam Nazarian said in a hearing that he recently used cocaine and has paid almost $3 million to a convicted felon
SBE Entertainment group CEO Sam Nazarian is stepping back from management of the recently opened SLS Las Vegas hotel and casino.
Nazarian and SLS Las Vegas majority owner Stockbridge Capital announced Tuesday that Nazarian is relinquishing leadership of day-to-day operations to Stockbridge president and chief operating officer Scott Kreeger. The Las Vegas Review-Journal was first to report the news.
San Francisco-based Stockbridge will allow Nazarian, his family and SBE to retain 10 percent ownership of the casino. SBE — which operates various restaurants and clubs, including the Hyde brand — will still run the facility's nightclubs, eateries and stores, although Nazarian will not be in charge of any of those ventures.
The move comes after Nazarian took part in a hearing with the Nevada Gaming Control Board earlier this month to apply for a casino license.
During the hearing, he admitted to having used cocaine during an April trip to Mexico. He also revealed business dealings that involved paying close to $3 million since 1999 to two-time convicted felon Derrick Armstrong and his associates, including former record mogul Suge Knight. Nazarian called the cocaine use a mistake.
"Following a recent hearing by members of the Nevada Gaming Control Board, we have made a collective decision to change the operating structure for the property, which Sam and I agree is in the best interests of the SLS Las Vegas," SLS Las Vegas executive director Terry Fancher said in a statement, according to the Review-Journal.
Nazarian said in a statement that he is "extremely proud" of his company's work in recent years, including SLS Las Vegas' August opening, the Los Angeles Times reports.
He added that his "professional efforts are more productively focused on the long-term growth of SBE brands throughout North America."