Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Tuesday, May 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

Kickbacks: the Las Vegas Way of Life

LAS VEGAS (CN) - Kickbacks from strip clubs are a way of life for Las Vegas cab drivers - they even have a website to tell them how much the clubs are paying - and Uncle Sam takes a cut.

Strip clubs and massage parlors pay $20 to $50 a head to cabbies and limo drivers, and sometimes as much as $100 per customer, interviews with cab drivers and formers drivers reveal.

Generally, fully nude strip clubs pay more than topless clubs, drivers say, and they adjust the kickbacks depending on how busy Las Vegas is during a given week

"If a big convention that draws a lot of men is going on, a lot of strip clubs will increase their kickbacks to $50 or more per passenger," a former Yellow Cab driver told Courthouse News.

"The drivers usually know which clubs are paying how much and will share that information. But you also can get it from a website called Cab Dash, which tells you how much different places are paying in kickbacks, how many people are checking out of which hotels and when planes are landing at the airport and how many passengers they are carrying."

Drivers are expected to kick back a percentage of their kickbacks to the doormen.

"They have a guy who watches the cabs that come in and drop off passengers. When you go up to get paid, he already knows your cab number and how many people you drop off, but will ask you anyway just to make sure you are being honest," the former cabbie said. "You have to give him your placard to get paid and are expected to give back about 10 percent of what you got paid to the guy at the door. Those doormen can make a lot of money on a busy night."

Kickbacks are so lucrative that drivers seek out potential strip club customers while they hang out on the Las Vegas Strip. A Courthouse News reporter recently was approached twice in less than 10 minutes by drivers offering to take him to a strip club.

Even more lucrative are runs to a massage parlor, which can pay $100 per head.

"Not all of the massage parlors pay the same. But when I was training with Yellow-Checker-Star, the guy training us pointed out a particular massage parlor that would pay $100 per passenger," the former driver said. "I've known of guys getting paid $140 to drop off a passenger."

The real jackpot is the rare run to a legal brothel in Pahrump, about 60 miles from Las Vegas, in Nye County. Prostitution is not legal in Clark County, where Las Vegas is, but it is in Nye County.

"A brothel might pay the cabbie 40 or 50 percent of whatever it gets from the guy you drop off, and usually will give you a free meal while you wait," said Darrin Bagnuolo, a former Nellis Cab driver. When added to the commission paid for taking a passenger some 120 miles round trip, a run to a Pahrump brothel "can make your month," Bagnuolo said.

Cabbies say the clubs make the money back on cover charges and alcohol, and depend on cab drivers to keep business rolling in.

"I once had a passenger ask to go to the Spearmint Rhino, which would have paid me $20," a former driver said. "On the way, he asked about the Sapphire Club, which I knew was paying $50 a head. So I told him it was a very popular club with a lot of hot women, and he told me to drop him off there. If I hadn't known the Sapphire was paying more, I would have just told him they all are popular and have a lot of hot women."

Cab drivers can get up to $15 for dropping off passengers at the increasingly popular gun ranges in Las Vegas, many of which charge premium prices to shoot machine guns and other firearms.

The practice of kickbacks to drivers goes back to the days when organized crime helped found Las Vegas. But over time, it has become a legal and legitimate practice, in which even the IRS gets a cut of the action.

In 2011, the Nevada Federal District Court ruled against plaintiffs in a class-action racketeering lawsuit filed in 2009 that accused strip clubs of using taxi drivers to extort money from passengers by diverting them to particular clubs.

The court dismissed the case, finding no evidence of criminal activity.

The IRS got in on the action in 2010 by requiring strip clubs to make cabbies and limo drivers fill out 1099 tax forms to report their kickbacks on their annual income tax returns.

The strip club owners agreed to the 1099 requirement to avoid potential federal prosecution and having their clubs shut down.

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.