Taverns accused of running mini-casinos
The Dotty’s chain of taverns in Nevada, which have been accused for years of running de facto slot parlors, have once again been told to change the way their businesses are set up to satisfy the concerns of gaming regulators.
The new rules are meant to force Dotty’s and similar businesses to “look and act more like traditional bars,” reported the Las Vegas Sun, “or risk losing more than half their slot machines.”
Clark County Commissioners voted 6-1 last week to amend the ordinance governing the taverns. Commissioner Chris Giunchigliani, who cast the dissenting vote, also had asked that existing taverns have more time to comply with the new ordinance, which is effective immediately for new tavern applicants, and on January 1 for existing operations. It will require the taverns to operate full-service kitchens and embed more than half of the location’s slot machines into bar tops, or prove that slot revenue is 50 percent or less than other revenue generated at the taverns, the Las Vegas Review-Journal reported.
If a tavern cannot satisfy one of those requirements, it must reduce its number of slot machines from 15 to seven. The ordinance also specifies the size of the bar and the hours of operation for the kitchen.
“If they’re getting less than 50 percent of their revenue from gaming, it doesn’t matter what they do, they’re OK,” Commission Chairman Steve Sisolak said at the meeting. “This is a small group that I feel has been operating as slot parlors and were never taverns to begin with.”
“When I walk into a tavern, I know what I see,” agreed Commissioner Larry Brown. “Dotty’s is something different. No one is going to convince me that gaming is incidental to the primary business.”
But Dotty’s COO Mike Eide said the idea that his 120 locations are thinly disguised slot parlors is “absolutely false.” He also said the chain, which is owned by Nevada Restaurant Services, may have to spend up to $10 million to comply with the ordinance.
The most recent change in the ordinance came in 2011, when Dotty’s and other taverns with restricted gaming licenses, like Jackpot Joanie’s, were required to install bar-top slot machines and a restaurant with seating.
The new ordinance has two requirements. The tavern facility must operate a full-service kitchen and embed more than half of the location’s slot machines into a bar top, or show that slot machine revenue is 50 percent or less than other revenue.
Behind the ongoing legal challenges are some of the state’s casinos, which have complained of losing business to the neighborhood tavern. Golden Gaming attorney Sean Higgins warned commissioners that if the taverns were not reined in, there would be “slot parlors on every corner.”
Despite the crackdown in 2011, the Review-Journal reported that most Dotty’s locations still collect “far more than 50 percent” of their revenue from gaming.
“Gaming is a privileged license,” Higgins said. “If people had complied in 2011, we wouldn’t be here today.”
