After much ado from the Nevada Resort Association and Station Casinos, the Clark County Commissioners were scheduled to revisit its gaming policies under the direction of Chairman Steve Sisolak, who is advocating for stronger regulations. The association and Station Casinos are targeting Dotty’s, a business permitted as a tavern, but allegedly earning like a casino from its approximate 1,300 slot machines in 69 locations.
Dotty’s Chief Operating Officer Mike Eide disagrees, saying Dotty’s has invested millions to ensure it is in complete compliance.
“They should tell us what law we’re not following,” Eide said.
Tavern owners—not just Dotty’s—are in fear their operations will suffer if commissioners continue to tighten regulations.
The state and Clark County gaming conglomerates argue Dotty’s is classified as a tavern with “incidental” gaming revenue, which means most of Dotty’s revenue should not be from gaming. Plus, conventional casinos are more restricted than taverns and pay a significantly higher tax.
The ongoing dispute between Dotty’s and the county stems from an incident in 2010 in which a county audit found Dotty’s earned 90 percent of its revenue from slot machines.
“You don’t go to Dotty’s unless you’re going there to gamble,” Sisolak said. “Nobody goes to Dotty’s for a beer.”
Sisolak and others do not feel Dotty’s sketchy food and drink menu qualifies as a viable source of revenue.
By law, slot machines in taverns are incidental revenue, much like pool tables. Because of the 2010 incident, the county imposed new regulations that had space and seating requirements, along with a functioning kitchen 12 hours per day and a bar equipped with no less than eight embedded slots. Dotty’s was given two years to make the renovations. In response to the new regulations, Dotty’s added two dozen selections to its menu—mostly microwavable prepared food—but two years later when inspectors checked, Dotty’s had 15 of the 17 locations in noncompliance.
All 17 complaints were dropped because the law was written ambiguously and in March, commissioners approved a 90-day hold on gaming applications for taverns until they tweak the regulations.
Conventional casinos spend millions of dollars in construction costs before they are allowed to host table games and slot machines. They also pay up to 6.75 percent on gross gaming revenue. Dotty’s, on the other hand, pays just $574 per machine under its restricted tavern license.
Prior to becoming a concern in Clark County, Dotty’s was attracting attention in Oregon because of its success. An audit in 1997 revealed 21 out of 22 locations were collecting two-thirds of their revenue from gaming. Original owner Craig Estey sold his holdings in Oregon in 2007 after he was investigated for domestic violence and then lied to the Nevada gaming authority about the incident. Nevada fined him $200,000 for the lie.
Station Casinos has been accused of organizing the opposition to Dotty’s because the locals casino company sees the taverns as threats to its market. Nonetheless, a local media report that Station was trying to purchase Dotty’s from Estey was discounted by Station officials. Estey claims he turned the offer down but the president of Station Casinos, Steve Cavallero, denies the offer was ever on the table. He said the meetings with Estey had to do with preliminary business.
“There was no formal offer made,” Cavallero said. “We would have had to go to the board.” When asked a second time, Cavallero said there was no formal offer to the best of his knowledge and any discussion would have been on Dotty’s value. Cavallero said if a deal had been completed, Station would have brought the taverns into compliance.
Estey went on record about the offer with the Gaming Control Board. Station Casino agents reportedly offered Estey seven times the raw value of Dotty’s. Later, the agents said Estey felt his business was worth more.
After attempting to tweak the law, the commissioners turned to the Nevada Gaming Commission for advice. Gaming officials will review the law May 22.
