The Nevada Gaming Commission approved a gambling license for Sam Nazarian after hearing an appeal Thursday by the Los Angeles nightclub mogul, who admitted to paying $3 million to a convicted felon and using cocaine.

After a grueling two-hour hearing -- in which the shame-faced nightlife impresario was forced to identified the date of his last drug use and to confirm he was the father of a child out of wedlock -- the board granted Nazarian a limited one-year license.

The license, approved on a 4-0 vote, includes a requirement that Nazarian submit to random drug testing and establish a $50,000 fund to pay for the tests.

“After 39 years on earth, I’m proud of all that I’ve accomplished,” Nazarian told the board. “I want to talk to you today about things I’m not proud of.”


After apologizing to the commissioners and their investigators for initially lying about his drug use, a visibly nervous Nazarian said he was stepping away from day-to-day operations at SLS Vegas and its parent company SBE.

He acknowledged he “might have” a drug and alcohol problem, admitting experimental use of ecstasy and marijuana in his 20s.

“The thing that I am assessing now is alcohol abuse,” he said.

He said that he had sought the care of a substance abuse specialist in Las Vegas.


“If there is an issue, we will find a solution,” he said.

All four members of the board said that they came to the hearing almost certain they would vote to deny Nazarian’s application but said his candor and humility persuaded them to grant the license.

“I always want to give someone a second chance,” said chairman Tony Alamo. “And perhaps give them enough rope to hang themselves.”

Nazarian oversees dozens of trendy restaurants, nightclubs and boutique hotels, and is planning to open eight SLS hotels by 2016, including locations in New York, the Bahamas and Beijing.


Nazarian opened the SLS Las Vegas in August but gave up day-to-day control of the hotel after commission investigators disclosed the details of his drug use and payments to convicted felon Derrick Armstrong and others, including Death Row Records founder Marion “Suge” Knight.

Nazarian characterized the payments as extortion by Armstrong, who, when he tried to attend the commission meeting Thursday, was arrested on outstanding warrants for theft and writing bad checks.

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