LAS VEGAS — Nevada state gambling regulators are reviewing business dealings between casinos and their nightclub partners amid reports that the Internal Revenue Service is investigating cash flow at two popular Las Vegas Strip clubs.

"We're going to look at all aspects of those relationships," Jerry Markling, chief of enforcement at the Nevada Gaming Control Board, told the Las Vegas Sun. "We want to make sure the relationships are in the best interests of gaming and the tourists."

Markling did not immediately respond Thursday to messages seeking comment. He told the Sun that regulators have notified casinos that they can be held accountable for conduct in clubs, and are reviewing revenue-sharing agreements between clubs and casinos.

Some casinos own their nightclubs. Others lease space to club operators. Some resorts share club revenues.

IRS investigators reportedly searched Pure nightclub in February and interviewed tip earners at LAX in a probe of whether employees have properly reported unadvertised admission fees and tips received from clubgoers. Agents confiscated computers from the offices of nightclub operator Pure Management Group on Feb. 20.

Pure Management and its co-owners, Robert Frey and Steve Davidovici, run Pure, at Harrah's Entertainment-owned Caesars Palace, and LAX, at MGM Mirage's Luxor. Both clubs have revenue-sharing agreements with the casinos.

Bob Emmers a spokesman for Pure Management, said the nightclub company will cooperate with the Control Board inquiry. He said Pure Management would not comment on its lease arrangements with the casinos.

Harrah's Entertainment spokesman Gary Thompson declined to discuss the Pure lease, saying his company is still "reviewing our nightclub operations."

MGM Mirage spokesman Gordon Absher declined comment about LAX, but added that his company was conducting an internal review of its affiliated nightclubs.

Pure and LAX lease agreements on file with the Clark County Business License Department provide detail complex business ties between nightclubs and Strip casinos.

Pure agreed in December 2003 — a year before the club opened and before Harrah's bought Caesars Palace — to pay $840,000 a year in rent, or $70,000 a month, plus 8.5 percent of gross sales.

The club is bound by the 10-year lease to include "all cover and other charges associated with the nightclub" in gross sales, and to provide Caesars Palace with an accurate accounting of gross sales every month.

Records show that several celebrities and high-profile locals invested in the $14 million nightclub. Together, those investors contributed a total of $11.5 million, according to a December 2004 list Pure provided the county.

The 10-year LAX lease, signed in January 2006, obligates the club to pay the Luxor $2 million in rent per year, or $166,667 a month. LAX reportedly cost $20 million to build. It also owes a percentage of gross sales varying from 10 percent for $20 million in sales to 20 percent of sales exceeding $40 million.

LAX also has to provide the Luxor with a monthly accounting of gross sales, which include "all cover charges and admission charges."

Both lease agreements give the casinos approval rights for top club managers, and require the clubs to conduct business in a manner that meets the approval of state gambling regulators. Both also allow the casinos to terminate the leases if conditions aren't met.

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Information from: Las Vegas Sun, www.lasvegassun.com