Big gamers may be right, but cried wolf too often

By Jon Ralston

Friday, April 1, 2011 | 2:01 a.m.

This is the juiciest story to come along in quite some time in this juice town.

In one sense, it’s a familiar tale: The gaming industry takes a legitimate policy issue — the proliferation of slot parlors — and overreaches, trying to obliterate competitors and using smash-mouth tactics.

And the gamers, who usually have the biggest juice bottle, have been met with resistance from well-heeled foes who are willing to hire the two most successful local government lobbyists — Chris Kaempfer and Jay Brown — along with a stable of former industry regulators, who once seemed concerned about gaming infiltrating all areas of the community, but now are outraged, just outraged at the anti-competitive zeal of the industry they once oversaw.

Amid all the lobbying and rhetoric is a serious — or at least it should be serious — policy issue: What is the state’s role in enforcing a regulation that mandates gaming is “incidental” to a tavern’s operation, a requirement woven into Nevada’s fabric to protect, within reason, the industry that has invested billions and sustains the economy.

The problem is twofold: The industry has set out, through its juice locally and in Carson City, to crush competitors, no matter their size, through its hegemony. And the regulators have not, well, regulated.

When I hear the megaresorts, which regularly ask for corporate welfare from local and state governments, say this is not about competition, I wonder upon what meat they doth feed. But, of course, I know: They feed on suckers — and I mean the ones playing slots and with the elected titles.

It’s never enough for these guys, who often act as if the politicians are their handmaidens — and the elected officials are often obliging. When times were good, no one paid attention to little Dotty’s, which started 16 years ago, posing as a tavern but morphing slowly into a slot bar mostly for women who would rather win a jackpot than watch the Final Four.

But now the Big Boys who cried wolf so many times in the past over every threat, real and imagined, and who often went into business with those they demonized (New Jerseyans, Mississippians, Indians, Web gamblers), are surprised they have a public relations disaster on their hands as the economy has tanked.

I think I was most offended when I saw the gamers were spreading around an old story about a Dotty’s principal and domestic violence and him not being straight with regulators about it. Not only is it not at all relevant to the case at hand, I wonder how he would look matched up against some of our captains of industry or their lieutenants through the years. Really, gamers, you want that debate?

Their tactics aside, the gamers have a point.

This debate over what the meaning of the word “incidental” is in the regulation has ebbed and flowed for decades, with the state rubber-stamping the notion that an enterprise with a tavern license is presumed to operate a business where gaming is incidental.

Even if that were once true — and that is debatable — it is simply laughable since the smoking ban was enacted, which, not coincidentally, exempted the casinos and pulverized bars. Most taverns now have well over

60 percent of their business from slots — Dotty’s was estimated at 72 percent by the county audit and it wasn’t the highest.

As Gaming Commission Chairman Pete Bernhard put it last week at a hearing, “although we have the power to do it, we have never exercised that power to challenge it (that revenue is incidental).”

It’s about time to enforce or change the regulation. Dotty’s is neither fish nor fowl, complicating this mess. Just look at how longtime Dotty’s consultant Patty Becker, a former regulator, described the business at various times during that gaming hearing:

“I represent the controversial casino … We are a bar. We’re a bar. We’re a tavern. We’re a saloon … We are a very quiet casino.”

But it was Commissioner Randolph Townsend who exposed the Dotty’s canard with his “but for” test: “But for the food, I wouldn’t walk into a Safeway to gamble … But for the Slurpee and the corn dog and the bag of chips and the gasoline and carwash, whatever, I wouldn’t go into a convenience store to gamble.”

And but for the slots, no one would go into a Dotty’s. Period.

A deal may be struck between the Dotty’s folks, the tavern owners and the gamers before next week’s meeting. I sense both sides are weary of the fight. But, with so many billable hours expended, so many egos at work, so much at stake, the juice may be out of the bottle.

(I have posted many documents relevant to this issue on my blog on the Sun site.)