From Las Vegas to small Midwestern towns, “grandma casinos” are growing in popularity and controversy. Throughout Las Vegas, 64 Dotty’s Gaming and Spirits lounges attract mostly women age 40-plus with red-and-white checkered tablecloths, plastic flowers, old clocks and other tchotchkes—and slot machines. In a 50-mile radius from Elgin, Illinois, nearly 140 Dotty’s and similar establishments either are open or are getting ready to.
Mike Eide, chief operating officer for Dotty’s in Nevada, said, “We are redefining what a bar is. We designed a bar for older women, which was a clientele nobody wanted. It’s probably not a place I would go, but I’m not going to dictate what kind of bar they go to.” He said it’s only “the big local casinos that complain.”
Local officials also are complaining that for years, Dotty’s and other slot parlors have flaunted regulations by claiming to be taverns and opening in residential neighborhoods, where casinos are prohibited. As a result, Clark County temporarily is not issuing gambling licenses at taverns.
County Commissioner Steve Sisolak said, “We didn’t want mom-and-pop-type casinos popping up everywhere, and there have gotten to be too many of these slot arcades. They don’t create any jobs, compared to a traditional tavern or casino. All they’re doing is skimming the cream off of the gaming revenue without offering anything to the community.”
Sisolak added since 2010, the number of Dotty’s, Penny’s, Stella’s, Jackpot Joanie’s and other slot parlors has more than doubled, as neighborhood bars, restaurants and service businesses closed during the recession. Most of the slot parlors, Sisolak noted, have only one employee on site at a time. That means their operating costs are a fraction of a traditional tavern, so they can offer lower prices and better odds. “A regular tavern has three bartenders, cooks, busboys. These places have none of that,” he said.
Most slot parlors in Nevada are licensed as taverns and can offer up to 15 slot machines, if, according to state law, gambling is “incidental” to the business; “incidental” is not clearly defined, making gambling difficult to regulate. In 2011 most of the slots parlors were forced to start offering food and alcohol.
Food service and a local liquor license were required when Illinois began allowing up to five video gaming terminals in August 2012 at truck stops, restaurants, bars and fraternal and veterans organizations. But recently corporate owners of “gaming cafes” have been seeking liquor licenses from village boards by presenting the businesses as deli-style shops that will serve wine and beer with a limited light menu, plus gaming. And instead of opening in existing bars or restaurants, they are moving into empty strip mall storefronts.
That’s happening in Portland, Oregon on Hayden Island in the Columbia River, near Vancouver, Washington. Jeff Geisler, chairman of the Hayden Island Neighborhood Network, said, “The strip mall is no longer a strip mall. There’s no dry cleaner, no beautician. None of the normal businesses are left. What you have is a mini-casino, and it’s a blight on the neighborhood.” Last year Hayden’s group unsuccessfully lobbied Oregon legislators to support a measure that would have tightened restrictions on bars offering video lotteries.
Tom Swoik of the Illinois Gaming Association said while these gaming cafes are fully legal under state law, they violate the spirit of the law. “We don’t believe that the intent of the act for video gaming was to have these kinds of places,” Swoik said. He noted the law required those seeking liquor licenses and video gaming to be Illinois residents, but forming a corporation in the state qualifies according to Illinois Gaming Board rules. That’s how Nevada-based Dotty’s has been allowed to open about 150 gaming cafes in Illinois.
Swoik the state’s casinos were starting to recover from the recession when video terminals came online. Now there are 16,000 video gaming terminals operating in the state. By comparison, Illinois casinos are limited to just 1,200 gaming stations.
Suzanne Phillips, marketing director at the Grand Victoria Casino in Elgin, noted her casino has been hit hardest by the gaming cafes, which both market to women age 55-60. Phillips said since 2007 revenues are down 55 percent at Grand Victoria. That slide is likely to continue unless certain inequities are addressed, she said. For example, when the Grand Victoria plans a promotion, Phillips must submit all the details to the Illinois Gaming Board for approval, which takes two weeks. She cannot offer spontaneous specials via social media to attract players since the state must approve any casino advertising.
Additionally, Phillips cannot send direct mail addressed to “Jane Doe or Current Resident,” because that current resident may be on the state’s self-banned list. The casino could be fined if an individual on the list receives one of those mailers. But gaming cafes can send direct mailers without state scrutiny, and there’s no way to patrol self-banned individuals at the cafes or at restaurants or bars with gaming terminals. A self-banned person would be arrested and charged with trespassing if he or she tries to enter or enters Grand Victoria Casino. Phillips said Grand Victoria must update its list of self-banned residents twice a week.
Another issue is boarding fees, Phillips said. She noted whenever an individual passes through a turnstile at Grand Victoria, the boat is charged $3; $2 goes to the state and $1 goes to the city of Elgin. Gaming cafes, and bars and restaurants with gaming terminals do not have to pay fees.
Swoik said, “There should be limits and caps on the gaming café facilities. There needs to be restrictions on advertising and promotions. Those are the two main areas that we are looking at.” He said some states have banned video gaming terminals in locations where less than 60 percent of income comes from food or liquor. “That kind of rule would reduce the number of cafes opening in Illinois,” he said.
In Nevada, Eide noted, if taverns were restricted to earning up to 49 percent of their revenue from gambling, “90-something percent of taverns in the state would be out of business.”
But the issue seems to be fading away in the Silver State.
“We really have heard enough on this issue.”
With those words, Nevada Gaming Control Board Chairman A.G. Burnett summed up the feelings of legislators who failed to advance a bill to further define restricted gaming.
Despite several efforts by Assembly Majority Leader William Horne and Station Casinos to keep the issue alive, Horne’s peers gladly let it die.
“I just don’t see us reaching consensus on a bill draft,” Senator Greg Brower said of the bill. He said the committee should “punt” the idea, which has been revisited several times in the past three years, and resulted in several changes in the law regarding establishments with restricted licenses.
Nevada Gaming Commission Chairman Peter Bernhard said the issue has “been vetted many, many times” and is only being kept alive by Station Casinos. “This is not a recent issue,” said Bernhard. “A loud and persistent competitor has continued to bring this to everyone’s attention.”
Sisolak said state law needs to more clearly define “incidental.” And Horne urged the committee to define the difference between traditional taverns and slot parlors. But a motion on his recommendation died when no one seconded it.
Commission Chairman Peter Bernhard dismissed allegations that slot parlors have grown in recent years. Again referring to Station, he said, “Just because you happen to see them more than you’ve seen them before, it is because people with a competitive interest have brought them to our attention.” Bernhard said a simpler way to resolve the issue was to delete the word “incidental” from the statute entirely, the Review-Journal reported.
