Siller critical of linking slots, McDonald’s restaurants

David Strow

Friday, March 10, 2000 | 11:05 a.m.

What appeared to be a routine slot machine application turned into a legal debate Thursday, as a member of the Nevada Gaming Control Board questioned a decision to allow slot machines in a Las Vegas convenience store with a McDonald's restaurant.

The control board approved ETT Inc.'s application to place seven slots in a Terrible's outlet on East Sahara Avenue. The McDonald's restaurant is separated from the slot area, but in the same building.

ETT is a slot route operator owned by members of the Herbst family, owners of the Terrible's chain.

The approval came over the objections of board member Bobby Siller, who likened the move to approving a slot machine themed after Ronald McDonald.

"McDonald's targets children," Siller said. "It is a place we take our children for a variety of reasons. Where do we draw the line?

"I don't think this is a very healthy combination of these two entities."

The legal issue turns on a decision made by the board and Nevada Gaming Commission more than five years ago. At that time, ETT presented the concept of combining convenience stores and fast food restaurants to regulators and the commission determined that such outlets would be suitable for gaming. Nevada gaming regulations generally allow slot machines to be placed in convenience stores.

Since that time, a number of such stores have been approved by the commission, including several with McDonald's restaurants. Several commissioners have expressed discomfort with the combination in the past, but were not willing to break from assurances made to ETT five years ago.

Based on this precedent, Board Chairman Steve DuCharme and member Dennis Neilander moved for approval.

"This particular applicant relied on that prior approval in investing millions of dollars in development in these kind of locations," DuCharme said.

But Siller -- who had voted to approve such combinations in the past -- voted against it this time.

Siller argued that the board and Nevada Gaming Commission have taken a number of actions in the past year to protect children from gambling, including a ban on "child-themed" slots and a measure designed to prevent the spread of gaming into neighborhoods. For this reason, he said, the board should be even more cautious about potentially exposing children to gambling.

"At some point, I had to take a stand," Siller said.

But DuCharme pointed out that the restaurants had separate entrances from the convenience stores, so parents could avoid passing by the slots.

"There is adequate supervision in these convenience stores, as with any other convenience store, to restrict access by minors to these gaming devices," DuCharme said.

Although the slots will be allowed into the East Sahara store with commission approval, DuCharme asked the attorney general's office for legal advice on whether ETT could rely on the previous approval, or if the board and commission had a way of rescinding the blanket approval.

It's a critical issue for ETT, which plans to build at least seven more of the stores in Nevada.

"Obviously they would like some comfort that they're not going to spend a couple of million dollars on development ... and not be approved," DuCharme said.

In a second potentially precedent-setting decision, the board rejected an unusual application by a Pahrump couple hoping to sell their home through a charitable lottery.

Under the structure of the proposed raffle, the couple would have retained $145,000 from the sale of raffle tickets as compensation for their home. The remainder -- estimated at $54,000 -- would have gone to the benefit of "No to Abuse," a Pahrump non-profit organization benefitting victims of family violence in Nye and Esmeralda counties.

The couple, who identified themselves as Mr. and Mrs. Ferd Loisel, said they their home was appraised at $165,000, and that another buyer had been located who would buy the home for that amount -- but that they wanted to donate a substantial sum to a children's charity.

While noting that the charity was worthwhile, DuCharme expressed concern that a precedent could be set by approval.

"In the past, associations have raffled off homes for charity," DuCharme said. "In this case, it appears to be close to a homeowner sale. If anyone wanted to sell their home (in Nevada), why wouldn't they look up their local (non-profit) and raffle it off?

"Our actions will affect the whole state, not just your community."

Though the board denied the application, they urged the Loisels to restructure the raffle in a manner permitted by Nevada law. One way to accomplish that would be for the home to be deeded to the charity prior to the raffle, with the charity compensating the couple prior to the transfer.

"I commend you, not only for wanting to give, but to give the maximum," Siller said. "I'm touched by that, and I hope you can structure this in a way so you can accomplish this (donation)."

Also in Thursday's hearings, the board came close to denying a gaming application by the owners of a Las Vegas liquor store over a lack of candor with control board investigators.

The owners of Jack's Liquor, 4914 Boulder Highway in Las Vegas, withdrew their application after board members warned they would be denied if a vote was taken.

Outright denial of a gaming license is an onerous designation in Nevada, as denied applicants are prohibited from doing business with any Nevada gaming license holder. Denial is rare, however, as the board usually allows the withdrawal of the application, unless the offense is particularly grievous.

One partner, Nahla David, claimed on her application that she had never been arrested or convicted for any crime. However, investigators later found that she had convictions in San Diego for perjury and welfare fraud. David claimed her response was because she did not understand the question.

Similar concerns cropped up with David's partner, Adil Yako. Yako also claimed he had never been arrested or convicted. Investigators found that Yako had been arrested and taken to jail; Yako responded that he believed the question did not apply to him, since he had only been in jail for several hours.

David and Yako's application was withdrawn with prejudice, which prevents them from reapplying for one year.