The Brownstein Hyatt Farber Schreck shareholder and head of its gaming practice has a reputation as a principled but dogged advocate with a keen legal mind. He has famously taken on the most challenging applicants for gaming licenses. At the same time he has fostered profitable decadeslong legal relationships with Nevada's top gamers.

Schreck, along with fellow attorneys David R. Arrajj, Edward N. Barad and Ellen Schulhofer, this year were named by Lawdragon as four of the nation's leading legal deal-makers in the ranking service's annual list.

The Southern Nevada native a year ago made a career-transforming move by merging his firm with a large regional law firm (Brownstein Hyatt Farber). The move has dramatically increased the size of his firm, and his practice is able to take on the largest regulatory cases in gaming.

His background as a former Nevada gaming regulator has given him unique insight into how gaming regulators operate and what they need to see in a proposed regulation or gaming license application.

Question: Tell me about the firm and your role in it.

Answer: The Nevada firm merged with a larger Colorado firm, effective Jan. 1 this year. Prior to that, our firm ranged between 24 and 27 lawyers. I guess we could be described as a boutique law firm. We had a very high profile in the gaming industry; we provided a lot of ancillary services to the gaming industry such as litigation, corporate and commercial real estate and transactional work.

There came a time two or three years ago when I realized that, with the growth of Las Vegas and the growth of the projects my clients were involved in, there was no way that we could handle the nongaming business with the number of lawyers we had no matter how good they were.

We had, over the years, been romanced by all the large Phoenix law firms and a lot of other regional and national law firms, mainly because I think we have the type of business that they were looking for coming into Nevada. We represent most of the major gaming companies and that was their focus because that's where all the major finance, construction and building is. None of them seemed to fit our corporate culture.

And so, after a lot of exhausting negotiations and discussions — and I wasn't involved in those, I had my three other partners who are a lot younger, doing that work — and because we needed backup in order to do the type of transactions our clients were becoming involved in — where it's not a $100 million building, it's now a $2 billion — we needed to expand. I've known Norm Brownstein for 20 years, and their firm does up there what we do here. And that's high-end work, but they have 140 lawyers.

Their corporate culture is the same as ours and we got together and negotiated ... and now we have a large number of lawyers who can handle the large transactions that we can get involved in here in addition to bringing skills that we didn't have in practice areas such as intellectual property, securities work, tax work and a lot of things that we didn't provide. So it's been the perfect fit for us.

What's your role in the firm?

I'm head of the gaming ... department? Division? Whatever that is. And our gaming practice is an extremely large practice. We probably represent more people than anyone ... our firm is handling all the regulatory work in Apollo/TPG's purchase of Harrah's, so we're coordinating that licensing all over the country. We've hired lawyers in the different states that Harrah's operates in and that Apollo and TPG need to be licensed in.

I've trained those lawyers in the licensing structure we developed here years ago for Colony Capital that has been used a lot of times. And then I had to go educate their regulators on the structure. And now we've been going through the licensing. All the licensings have been falling in last month and this month. We have a whole bunch and we'll finish, hopefully, with the Nevada Gaming Commission on the 20th.

Contemporaneously with that, I'm doing the same thing for two funds in New York called Fortress (Investment Group)and Centerbridge (Partners)who have entered into an agreement to purchase Penn National (Gaming). Penn National is not licensed in Nevada, but it is licensed in 13 or 14 other states. And I'm coordinating that licensing all over the country, and we were hired to do that because we're the only ones who've ever been able do that. We did it with the Harrah's transaction.

And so we're handling all of that licensing, which are the two largest projects of that nature in the history of gaming. Then we have all of our regular clients: Stations Casinos — I've represented Frank and Lorenzo's father when he got licensed, so that goes back over 30 years; Steve Wynn's been my client over 30 years. We have a lot of long-term clients that we represent as well as many of the big firms.

What are the major gaming regulation trends in Nevada today?

Well, we've created the most important trend and that's private equity investment in the gaming industry, which is incredibly significant. My former partner Jack Godfrey, who is now general counsel for Pinnacle Entertainment, which is one of our clients, he and I created the licensing structure to allow Colony to buy Harvey's (Harvey's Lake Tahoe)in 1999.

We then utilized that structure for Bay Harbour (Management)and its purchase of the Aladdin — it's the 50 percent owner of the Aladdin. We used it for Oak Tree (Capital Management)and Oak Tree's purchase of an interest in the Cannery. We've used it for Goldman Sachs' Whitehall Funds and its purchase of a 40 percent interest in the (Las Vegas)Hilton. Colony again is coming back in the purchase of a huge equity interest in Stations. And now Apollo and TPG have a purchase of Harrah's, which was recommended for approval by the Gaming Control Board.

That structure we've also utilized throughout the country in terms of the Harrah's transaction. Where 14 or 15 jurisdictions — which required going and educating their regulators and their staff as to what this really meant — why you don't really have to license limited partners.

The whole key of it is, and the structure is, that you've got all the limited partners, which are just like the public shareholders. You're exchanging, when private equity buys Harrah's all that happens is they replace the public shareholders with these limited partners in the funds. And limited partners are huge pension and public and private pension funds, endowments, institutions, you know, they're the CalPERS and CalSTRS in California, PERS in Nevada, you know, the retirement funds all invest in these funds. Apollo and TPG, one's 17 years, one's 15 years. Their annual rate of return has been over 40 percent annually. So that's why all these funds get the money, because of their incredible success. And they're good for the gaming industry because, as I mentioned to the board, the structure itself is far more transparent from a regulatory standpoint than a public company is because if you compare limited partners with the public shareholders, the public shareholder in Harrah's, you don't necessarily know who they are because most of them are in street names. Whereas, the limited partners, every single one of them, are disclosed, they've signed subscription agreements with the funds, they've had meetings with them, so they know who their customer is.

You've talked a little bit about how casino ownership has evolved since the early days in major ways. Have those changes been good for the industry and Nevada? How and why?

You'll get two different philosophies. If you're looking at the friendliness and the congeniality of the old days, everybody has fond memories of that. I saw a TV documentary the other night on Don Rickles. And it had a lot of the old time comedians, Bob Newhart and all the guys who used to come in in those days when the casinos were controlled by mobsters. And they felt that it was so much more friendly and so much more open. They could walk the streets, they were always safe. And now when corporate America comes into Nevada, it's not the same. I think that's probably a little exaggeration, but that's kind of that old feeling about, "Jeez, Nevada's not the same."

Nevada can't be the same and be what it is today.

One example I've always given is that when I was on the Gaming Commission, in the mid-1970s, early 1971 through 1975, there were three major banks in Nevada. The two big banks didn't lend to the gaming industry. The third, which was by far the smallest of the three, lent to the gaming industry. And its money was really coming through the Teamsters pension fund, which turned out not to be the right source of funds anyway.

But Nevada banks wouldn't lend to the gaming industry. Caesars Palace, when it was built and it was the Mecca of gaming, it was the showcase of casino gaming in this country, was $60 million. The preproduction cost and the staging for (Cirque du Soleil show)"O" cost twice as much as Caesars Palace cost. So you're in a whole different world now. Where it used to be that you could spend $200 (million), $300 million and have a nice casino and be the top of the line, these (nowadays)are all $4 (billion), $5 (billion), $6 billion projects. And where do you get that money? You don't get it from mom and pop, you don't get it through bank loans. That's why private equity is so important. Private equity has a lot of money. And they're patient investors. But now the capital investment demands on the industry are so great that you can't have the old days. I mean, there are no small banks to finance, there are no mom-and-pop organizations that can put this together, there are no families that can put this together.

The Fertitta family was kind of the last, but they went public seven, eight years ago, nine years ago, to access public markets ... A family business just can't support the costs and the capital requirements of this industry. So you don't have family businesses.

How has gaming regulation changed along with that?

Well, to Nevada's credit, and it's the reason why you see a $7 (billion), $8 billion project at CityCenter, a $5 (billion)or $6 billion project at Echelon (Place), you see Steve Wynn building his next tower and that whole thing will be $4 billion, (Sheldon)Adelson put $4 (billion)or $5 billion into his project. The whole reason you see that is because of the stable regulatory and tax structure in Nevada. And I've really learned firsthand — I mean I kind of understood it — but I've learned firsthand going to each of these states that I'm getting Harrah's licensed in and Penn National and the Fortress people licensed in, is to compare just the systems and what's good and what's bad. And it's clear that in Nevada the stable regulatory and tax structure are what appeal to these companies.

It is why Apollos and TPGs and their principals, who are very private, will expose themselves to the licensing process to get involved in the industry. Because the investment in the industry, especially in Nevada, creates predictable cash flows, predictable regulatory environment and one that grows with changes in the markets. This private equity was something totally new.

And we were privileged at the time to have someone like Bill Bible as chairman of the Gaming Control Board, who probably knew more gaming law and more finance than any gaming lawyer or any financial guy standing in front of him. And he was comfortable in how he needed to protect the state, and he was so smart that you could bring novel and different ideas to him, and he could see how it could work.

So the board has continued in that vein to learn and understand and not be afraid of new concepts. The mobile technical stuff that they just approved — and that's way beyond my capabilities, I have trouble using my BlackBerry — but there are a lot of new innovations going on in the technology area that the board is staying on top of, and a lot of finance. It is so complicated when you're dealing with billions and billions of dollars and huge sophisticated financial entities like these private equity funds that the state needs to grow with them and in Nevada they have grown with them. And Nevada led the way in private equity investment. And that's basically where it's at.

What's the biggest challenge facing gaming today?

In terms of the industry, it's just being able to manage the huge capital requirements that are now being imposed on them in creating new facilities. I think the challenges are going to come in states that are not as reliant on gaming as Nevada is and don't have as long a history with (gaming)where they will look at gaming as just a source of revenue and will continue to hike taxes and eventually make themselves unattractive to most companies. That's going to be a challenge, and there's already some of that going on.

I think the challenge will be to find new venues. The large companies, there's a constriction in the industry, as you know, so eventually there are going to be fewer independent companies and a lot of larger companies, and those companies will be out looking for opportunities outside the United States. And that's probably where the bulk of their growth is going to be. And then you have all of the Indian country gaming facilities and the growth in Indian country, which has been phenomenal. And the question is where does that go, where does it stop, does it stop, how will states react to it like in California and in Massachusetts where they have private companies coming in now competing against tribal casinos? There's a lot of those things that are still way up in the air.

And then with financing it's just going to be the ability of private equity funds to pick the right companies to invest in.

You talked a little bit earlier about clients you've had for decades. Who are your major long-term clients and how have those relationships been rewarding?

Well, being a gaming lawyer puts you in a much different position with your clients than any other lawyer. The nature of licensing work requires individuals who have been very private and who don't talk about what they do or what they own or what they've done, to give all that information to you. And if you have any personality at all, you have a bonding. And they become your friends. Because you basically know more about them than their wives, their business partners or the public in general throughout this process. So you end up becoming very good friends with them. And that to me has always been rewarding. I've been doing this over 35 years and it could get tiresome, but it doesn't because of the types of individuals I get to deal with.

Just now in Apollo/TPG, I get to deal with guys like David Bonderman and Leon Black. They're two of the icons of the private equity world. I mean, they're both multibillionaires. They made their money and they both started from scratch. And then really incredible entrepreneurs like Steve Wynn and the late Arthur Goldberg. It's just been real interesting. And then to watch the Fertitta kids. They're both in the Fortune 500. I wrote a letter of recommendation for Frank (Fertitta)to go to (University of Southern California). I mean, I got his dad his first license ... I took the Gaming Control Board and Commission members on a walk-through of Red Rock (Resort)just before it opened with Frank and Lorenzo, and we walked into one area that was just going to be a sort of anteroom for a big lounge and I said, "How big is this?" And Frank said it's about 5,000 square feet. And I said, "Can you even understand or imagine that this anteroom, which doesn't even have a real function, is larger than your father's first casino that started all this?" It was called the Casino, it was where Palace Station is now.

So those are the things that have been pretty neat. I've been fortunate in my period of time from being on the Gaming Commission and Mike O'Callaghan appointing me — I was his first appointment, actually, in 1971, and then left to bring Shannon Bybee, who is deceased unfortunately, into my law firm. He was on the Gaming Control Board and wasn't going to accept a reappointment, so I quit to bring Shannon into my firm.

But I've been there from really the major growth. As I was thinking about private equity and the change from public companies, I drafted as a representative of the Gaming Commission with Shannon as a representative from the Control Board and our outside consultants, the regulation that sets up the criteria for licensing publicly traded companies.

I mean, I'm thinking back, I've gone through this whole thing. It's really been kind of exciting. I hope I don't look that old, but my last Gaming Commission meeting, I called (Frank)Rosenthal forward for licensing. I go way back to the old days. I was on the commission when we licensed Morrie Shenker. I remember Shannon Bybee on the board said, "I made my vote and recommendation after I drank a lot of milk because I had an ulcer in my stomach because I knew there was something there but we can't prove it. And you had to prove something."

So it went through that whole era. And then out of it, I've been able to be somewhat at the forefront of a lot of the changes that have occurred. I drafted the institutional investor amendment or regulation. I brought it up when two major casino companies were coming out of bankruptcy. They were basically owned by investment companies that then couldn't get licensed and then they were going to end up converting their debt to equity and so we worked out an institutional investor regulation that has now benefited the entire industry because now you have all these large institutional investors who can get up to 15 percent interest in a company without having to get licensed. And they're easily recognizable. They have to go through a procedure, but they don't have to go through the kind of licensing that everybody else has.

You have a reputation as being the gaming lawyer who is willing to take on challenging applicants for licensure. Do you agree with that assessment, and what makes that part of your practice successful?

First of all, I'll never take on a gaming license applicant who I didn't think is licensable. I've told a lot of people not to file applications and I've ended up with a couple of people, but one in particular, who filed an application — the application looked fine — we go to an initial interview, which really just means going over the application and with the small docket now it takes an hour at the most. After 5 1/2 hours of the initial interview I knew there were lots of problems that were not disclosed in the application that I couldn't have had any idea about and I told him to go find a different lawyer. But most of the time I can figure that out as I go along. Or if something develops in the course of the investigation, you know I'll tell them that it's time to pull out, you can't get licensed. I've done that on a number of applications. But I usually don't get to that point because I understand who my client is and I do my due diligence.

Having said that, I will take some people who I believe are licensable that maybe what I'm saying (is)I can be wrong. Hopefully, I'm not, but they know I'm doing it honestly. And I'm not a wallflower. I'll take people who are a little more controversial and that doesn't bother me. Because I think the reason I've been successful is that I'm an advocate. And a lot of gaming lawyers are not necessarily advocates. I'll tell board members and commission members and agents what I think and I'll do it professionally. But they know when I do talk, I think my reputation is that I believe (in what I'm doing), I'll pursue and I'll be aggressive. But I'll do it in a professional way.

And there are people who I've represented who I felt should be licensed and positions I've taken that other people may not have taken. And I don't think I've lost any of them. But I am an advocate and that is the challenge in the business. My clients have a right to have someone who is going to be an advocate.

We've gone through this with Harrah's in other jurisdictions where there will be agents saying, "I demand to have this, you've got to do this, you've got to do that." And I'll say, "No, no I don't. And these are the reasons why." And if I can't convince him, I'll go above him and say this is silly, this is not a legitimate request. This is either too personal, doesn't lead to any information as to suitability and if I don't get satisfaction, then I'll go to his supervisor. I've resolved a lot of issues that way. Does an agent get mad because I do that? Oh well. If they do, they do.

But I think in the long run I'll have respect from them because they know I'm going to stick up for my client and I'll only do it when I think I'm right and I'll be the first to tell my client when I think they're wrong, too.

What do you think about the Boyd School of Law and its gaming emphasis? Have you had anyone trickle up out of that program yet?

I, for years and years and years, was dead set against a law school here. And I was born here, I was born and raised in Henderson. My fear was, you get a law school and then what you're going to get over there teaching kids are people who are ex-judges or ex-lawyers or retired judges — people who really weren't that bright to begin with trying to train lawyers. Because that's a neat place to go as kind of a semiretirement. It's like John Robinson coming here to coach football. He was really retired and didn't put any effort in. That's my big concern. I have been extremely pleasantly surprised with what Dick Morgan did out there. None of those types of people were hired. They brought in really good younger professors and they've done a very, very good job overall in the law school. We've hired people from the law school here. We have every year at least one and we sponsor a scholarship there. And they do a very good job.

The gaming part of it, we've never hired anybody from there that's taken gaming. Although I know that's something we ought to look at. I know Bob Faiss upstairs from Lionel Sawyer teaches out there and does a lot out there, and he's been around this business out here for a long time. And so they're getting good people out there to try to train lawyers. It's probably not a bad idea for me to think about. It's triggered something in my mind because we have hired some people from there but none of them into the gaming department that we have.

You've been in the legal community here for more than 35 years. A lot has changed. What's different now, compared to when you first came on the scene?

There's a lot more lawyers, and it's a lot more specialized and it's much more complicated. My practice, for example, when I was on the Gaming Commission in the early 1970s, in those days a lot of it was everybody believed it was who you knew. There were certain lawyers that had reputations in town, not as being good lawyers, but as being individuals who were close to the governor who had juice. And everybody gravitated toward them because it was perceived because of the history of gaming that licensing and regulatory work really were about your ability to influence somebody as opposed to being a lawyer. And that has changed. One of the greatest things that could have happened in Nevada, we had 24 years of governors that did not politicize the gaming industry or get involved with the gaming industry and that started with Dick Bryan for his six years, Bobby Miller for his 10 years and Kenny Guinn for his eight years.

I mean, just leave gaming alone, appoint the right people, appoint good people and let them do their job. So there wasn't any people calling the governor to try to influence that at any point in that time, which gave the gaming industry a chance to grow unencumbered by the political injury. I think that's a significant thing that people don't really realize or focus on.

I remember when Dick Bryan was elected. He defeated a governor who was running for reelection. There had been some connections between him and the Strip and things going on and juice and all that kind of stuff. I'll never forget when Dick won, because I was his chief fundraiser and all the guys on the other side thought I was the guy with the juice. And they called and said don't take my clients. These guys were my friends and they were saying please don't take my client away, don't do this because they had people calling them and saying, "It's time to go over to Schreck now."

And I had two people call me. And in one case they named one person and I said, he's as good a gaming lawyer as you're going to get. I don't think I'm any better. I'm a good gaming lawyer, but he can represent your interests very well. The other was with a guy who was a terrible gaming lawyer and I said you don't have to hire me, but my advice is that there are probably some better gaming lawyers you can get. But these guys were concerned about that.

It's evolved to a great extent ... It's now a complicated, sophisticated administrative law practice. It isn't, "Hey, I know these guys." You have to have good relationships, you have to know people, they have to respect you. And hopefully I've developed that over all these years. But I can go to the chairman of the Gaming Commission, he was my partner for over 20 years, if I go to him with something that's wacky he'll throw me out of his office. And I'd expect him to. He'll return my phone call because of our long-term relationship, but if I ask him something that makes no sense, I wouldn't ask him that anyway. I think that's how I built my reputation. I don't try to do something that shouldn't' be done. I'll advocate something that some other people think shouldn't occur, like private equity.

You're moving into the Molasky Building. As you're well aware, it's a LEED Certified Green building and there are a lot of things that go along with leasing that type of space. What prompted that move and what benefits are you hoping to get back?

Well, we'll go into a nice, new building, this building is an old building. We don't have parking for our secretaries, they have to walk way down to another parking lot during the winter at night. That's not something we really like, so it's much more convenient for all of us to be in one location and not have people disadvantaged by that. That was a major factor for me.

Irwin is my friend and I liked the idea of a green building because indirectly you're doing something nice ecologically. So those are the reasons why. We've just kind of worn our stay out here and we decided we needed new surroundings and that was a really nice place to do it.

Do you have any idea of the timeline of when that might take place?

We thought we'd be in by now, but it now looks like February. That's the construction business.

Is there anything else that I haven't asked about that you'd like to share?

No, just the fact that everyone who lives in this community should feel blessed. It's just been an incredible ride. There is some downturn now, certainly, in the housing market and construction, but the last 20 years in this town with these huge projects, what the next 10 or so years are going to be is just absolutely phenomenal. Having been born and raised here, I don't really appreciate how lucky we are until I go and talk to people who live in other areas of the country who haven't had this kind of big boom that seems never ending. So we're all very lucky to be in this community and be in business and no matter what your business is. Fortunately I have a niche in a good business for Nevada, the gaming business, so it's helpful that way. But it's been a great ride here. I look forward and I'm not ready to cash in my tickets yet (laughs).