Ten days ago, I wrote a column declaring that the Gaming Commission would have to review the way it deals with outside investors who are making real estate plays on the Strip. And on Thursday, the Commission had the chance to resolve this dilemma, reports the Associated Press. 

In my humble opinion, the regulators screwed up. The Commission was reviewing a novel arrangement that gave officers of a Goldman Sachs investment fund a shared seat on the board of the company that now owns the Las Vegas Hilton. It agreed to license the individuals rather than making Goldman Sachs and its many investment and banking arms jump through the licensing hoops.

Apparently the commission thought this wasn’t a hard case. Everyone knows that Goldman Sachs is the bluest of blue chip firms, of course, but it is a hard case precisely because no one would question GS’s good faith. And so this bad case has inadvertently made bad law.

The fact is that the Commission has put itself in the unenviable position of having to pick and choose who it thinks is respectable enough to meet its “Goldman Sachs” standard or else it will have to give everyone a pass so long as they’re willing to invest in a casino. And that’s the bogus basis for this decision. The commission wants to ensure there’s enough capital for casino investment.

Excuse me? Last time we looked, the boys of Wall Street were lining up to fund billions of dollars in Strip projects. Credit Suisse, to take the latest example, is bankrolling the Aztar buyout, and Columbia Sussex said it had a few other banks offering to help. And that’s for a company without proven experience as a big operator on the Strip.

The fact is that gaming regulators over the last couple of years have given every casino buyer a virtual pass on licensing if they hired a gaming manager. Read the column if you need your memory jogged but it’s only a matter of time until a front operator is put into place by an owner who just could not or should not be licensed.