Nevada's Gaming Control Board, which filed a complaint against the hotel, said despite warnings it continued to break the law by allowing the sale of drugs and providing private restrooms so people could have sex and take drugs, the Las Vegas Sun reported.
Without admitting or denying the allegations, the organization agreed to settle the matter by paying a $500,000 fine and paying $75,000 each to the Gaming Control Board and Metro Police to cover costs of the investigation.
The complaint alleged that in 2006 and again in 2009 the board sent letters to casino licensees expressing concern about excessive drunkenness, public sex acts, prostitution and drug distribution.
Hard Rock officials attended training seminars in 2008 and 2009, but undercover investigations found numerous violations in followup investigations.
Officials said in the settlement that Hard Rock "took significant steps" to correct the drug problem, including firing employees and key executives.
The settlement said the casino later tested its security officers and many nightlife workers and vice presidents, and found that 97.5 percent were drug free.