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April 19, 2014

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J. Patrick Coolican:

Antagonists aplenty in policy battle pitting Big Gaming vs. Dotty’s

The public loses again in politics-as-usual Nevada

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Justin M. Bowen

Cindy Clark plays a slot machine at Dotty’s near Eastern and Serene in Henderson on Thursday, March 24, 2011.

J. Patrick Coolican

J. Patrick Coolican

Dotty's

Cindy Clark plays a slot machine at Dotty's near Eastern and Serene in Henderson on Thursday, March 24, 2011. Launch slideshow »

My favorite public policy fights are those in which none of the players evokes sympathy at all.

And what a great example we have in the naked power play by big gaming interests to shut down Dotty’s, the neighborhood slot arcades that have popped up across the valley over the years like ugly little weeds.

It’s like a David and Goliath story, but only if David had been a little hustler who took money from old ladies.

By now the particulars are fairly well known: Dotty’s, the first of which opened in 1995, is a genius piece of marketing. It caters to gamblers — apparently a majority of them women — who don’t want to sit in a bar where everyone is getting sloshed. And many Dotty’s customers want to smoke, which they can’t do in many standard taverns because they often have kitchens and thus must comply with the voter-approved smoking ban.

So Dotty’s is bright and clean and offers counter service for drinks and packaged snacks instead of a bar or kitchen. So it’s not a bar atmosphere, and you can smoke. Then, these geniuses have gone one step further. As my colleague Liz Benston reported, they’ve filled the place with “curio shelves filled with knickknacks found across America: cow-shaped cookie jars, big-eyed turtles wearing straw hats, smiling frogs sitting on benches ...”

At a southeast valley location Tuesday evening, Dotty’s was packed but had a weird, hushed, monastic vibe, the only sounds soft rock and fingers on buttons. But a lot of people love it — there are 21 locations in unincorporated Clark County and dozens more statewide. What kind of people love Dotty’s? We’ll get to that in a minute.

Big Gaming, no doubt angry and embarrassed that it didn’t think of this marketing ploy first, did what capitalists often try to do: It got the government to shut down the competition. In Texas this is called “Bidness.” Here we call it “Juice.”

So a bunch of people who don’t believe in fairness or a level playing field, people worth millions or billions of dollars, started screaming, “No fair!” and “We must level the playing field!”

Geoffrey Lawrence, a policy analyst for the libertarian Nevada Policy Research Institute, put it this way: “They want to level the playing field because consumers prefer Dotty’s.”

Now, don’t get me wrong. Big Gaming had a legitimate legal argument to make.

It goes like this: Nevada law is cool with neighborhood gaming taverns. You can have gaming as long as the machines are “incidental” to the main activity of the establishment, which, in a real tavern, means boozy philosophizing, complaining about your boss and mediocre food. So is Dotty’s a tavern? Not any kind of tavern I’ve been in, and I’ve been in a few.

(Attorney Mark Ferrario, representing Dotty’s, quotes the language of the regulation: “If you are operating a bar, tavern, saloon or the like, licensed to sell alcoholic beverages ... then slot machines are presumed incidental to your business.”)

But let’s stipulate that it’s not a tavern. So if it’s not a tavern, it’s a minicasino. But if you want to be a casino, like the Station Casinos property in a neighborhood near you, you have to get a “privileged license,” which requires you to add amenities. See, Dotty’s doesn’t give you buffets or movie theaters or bowling alleys.

“If you want a privileged license, you have to follow the rules,” says Clark County Commissioner Steve Sisolak, who I guarantee will be the recipient of big bundled campaign contributions when the time comes. (I’m not suggesting any quid pro quo, mind you.)

Sisolak, with the support of Station and the Nevada Resort Association, pushed for a new ordinance last week that will end Dotty’s suspect business model. It will require existing taverns to have machines embedded in a bar. And, new taverns must have the bar with the embedded slot machines and 2,500 square feet of public space, a kitchen and a restaurant with 25 seats. (A win for those of us who treasure nongaming establishments: They are unaffected.)

As long as they were hard at work telling tavern owners how to run their businesses, the commission should have required a jukebox with Coolican favorites.

“It will put a lot of people out of the market. And that’s really the point,” Lawrence says.

Although I get the legal argument, I’m still a little confused about the public policy, because here’s where we are: We don’t want slot parlors like Dotty’s in our neighborhoods, but we’re perfectly fine with honest-to-goodness taverns where people will drink heavily and then drive home. Fantastic!

Then there was this scummy little side deal: Lobbyists for existing tavern owners went along with the County Commission’s new language in a deal with Big Gaming, which pledged to help get the Legislature to overturn the smoking ban.

So while the rest of America continues to make progress in this important area of public health, we’re going to go backward. At least R&R Partners, the lobbying powerhouse for the Nevada Resort Association, doesn’t represent the Nevada Cancer Institute anymore.

Finally, let’s talk Dotty’s and gambling addiction. It’s obvious that at least some players like Dotty’s because they can get “in the zone.” This is the term used by gamblers to describe the narcotic allure, when the world goes away and there’s only the machine. For those gamblers who are addicted, their brains are flooded with the pleasure-regulating chemical dopamine.

According to a 2002 report commissioned by the Legislature ­­— still considered the most reliable — 5.1 percent of Nevada adults met the definition of “pathological” or “problem” gamblers. Taken together, that’s 100,000 Nevadans. For these players, Dotty’s is a little slice of heaven, which means that for the rest of us, it’s a nuisance.

The next step in this war: There could be similar battles in other jurisdictions, as well as litigation over the county ordinance. We can only hope everyone involved bleeds cash in legal fees, and then sues all their lawyers and lobbyists for a true circular firing squad.

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  1. Dotty's has a very nice atmosphere inside, clean, friendly, open, bright and there is nothing wrong with snacks instead of a kitchen.

    Big Casinos don't want to pay taxes and want Government out of their business operations but are the first to use Government to ruin the livelihoods of their competition. Wealth creates control, not Liberty or Freedom.

  2. This column starts out fine with the conflict between Dotty's and the old line casinos, but runs amok in the addiction section, where I became confused.

    "Finally, let's talk Dotty's and gambling addiction. It's obvious that at least some players like Dotty's because they can get 'in the zone.'"

    Mr. Coolican, are you saying Dotty's is designed to attract or prey on the addict, or at least more so than any other casino?

  3. Dotty's operated beyond the letter and intent of the law. Nothing much else matters.

  4. "So while the rest of America continues to make progress in this important area of public health, we're going to go backward"

    Some people don't consider government regulation of private spaces to be "progress" - particularly when the product being used is legal. Either criminalize tobacco, or decriminalize its use within private spaces.

  5. Yes Turrialba, that's what he said and it appears to be their business model

  6. Many of these regulations exist only to drive up costs of starting your own casino to create a large barrier to entry which prevents competition.

  7. "Dotty's operated beyond the letter and intent of the law. Nothing much else matters."

    James_P -- you seem to not understand the difference between legal and lawful. And you seem to endorse the police state our republic is fast becoming.

    Dotty's lawfully rents space, creates jobs and provides what its patrons obviously want. It appears to have done so with the appropriate permits. Seems it's done so for several years. Now the county wishes to impose a regulation to put it out of business. How exactly is that in the public's interest?

    "[The law] has placed the collective force in the service of those who wish to traffic, without risk, and without scruple, in the persons, the liberty, and the property of others; it has converted plunder into a right, that it may protect it, and lawful defense into a crime, that it may punish it." -- Frederic Bastiat, 1850 "The Law"

  8. We can't have Dotty's. What would happen if someday casinos had to publish the average payback on their slots? We know the payback is falling and it may border on criminal. Can you imagine if Dotty's paid back 92% and Harrahs paid back 86%? What if word got out!!?? And what if Dotty's started to offer blackjack at 3:2 and Caesars properties wanted to pay 6:5. We can't have that. It's better to kill all of Vegas than to have to compete and loose. Shhhhh....

  9. Liberloonietoonians Wynn and Adelson need the government to protect them from competition. Gambling should only be allow in unionized properties.

  10. "Gambling should only be allow(ed) in unionized properties." Really? Here you have the naked mindset of the Red-leaning subculture. Then again, maybe mred, the talking horses rear end, was just kidding. Don't bet your freedom on that!

  11. Dottie's should just close down all operations in Clark county and raise the unemployment rate and cut the county's taxes. A good business model that was legally implemented and approved by the state and the county agencies. Not noticed until they profited in a recession, the others got jealous and tried to kill Dotties and every other operation like it. When you are the 47th worst state to do business in and want jobs. Well lets just say that people who start businesses here are ill-informed about the true business climate here.

    If you are going to change the rules in the middle of a game to rig the outcome, then why would anyone want to play. We should do that in high school football. Let them play the game and at the end of the game the winner gets to call the coin toss. The winner of the coin toss gets to be the winner.