Clark County pitches new rules to regulate Dotty’s, slot parlors

By Conor Shine

Tuesday, Oct. 7, 2014 | 2 a.m.

The battle over how much money taverns can make from bartop slot machines is shaping up with a new ordinance set to be introduced by the Clark County Commission today.

Commissioners have struggled for years to rein in slot parlors like Dotty’s, which critics say operate more like mini-casinos than bars. The commission passed new regulations targeting the industry in 2011, but commission Chairman Steve Sisolak says they didn’t do enough to solve the problem.

Now Sisolak is proposing tighter regulations on slot parlors.

Commissioners will introduce the new ordinance today and spend the next two months gathering feedback before a Dec. 2 vote.

Here’s a look at what’s in the law:

The 50 percent threshold

The biggest change is a requirement that bars with slot machines make at least 50 percent of their revenue from the sale of food and drinks. Previously, the law only required that gaming revenue be “incidental” to the main business of selling food and drinks. But the law never defined incidental, leaving a loophole that allowed businesses to earn up to 70 percent of their revenues from slot machines.

Who’s pushing for the changes?

Sisolak has been the most vocal supporter of new slot parlor rules, but he has some powerful allies. Station Casinos, the locals casino giant, and the powerful Nevada Resort Association, the primary lobbying group for hotels and casinos, have also pushed for tighter rules in the past. Those groups argue that slot parlors, such as Dotty's, operate more like casinos than bars by emphasizing slot machine gaming over food and drink sales. But Dotty’s doesn’t have the same restrictions and tax burdens faced by conventional casinos.

What other changes are in the new law?

The new law also changes several definitions to make them more clear. For instance, to qualify as a bar with a restaurant, the establishment must serve food prepared in the kitchen. Pre-packaged or prepared meals that are reheated in an oven, like what Dotty's serves, don’t count toward the bar’s 50 percent food and beverage sales threshold. Sales of cigarettes, a popular item at Dotty’s, also don’t qualify toward the 50 percent mark.

Finally, bars will be required to submit detailed records to the county each year showing how much money they made from food and beverage sales compared to how much they made from gaming. Bars that don't meet the 50 percent threshold could see their number of allowed slot machines slashed from a maximum of 15 to seven.

Are there any exceptions?

Any bar that operates a kitchen staffed by at least one employee for 16 hours a day is exempt from the 50 percent revenue test. This is meant to protect smaller bars that are trying to follow the law but still bring in more money from gaming than food.

“The concern was if they’re following the rules and have a kitchen open and then someone comes in who happens to spend $25,000 on the slot machine. It could throw the whole thing out of balance,” Sisolak said.

The law also contains a grandfather clause that allows any bar open since 2006 or earlier to continue operating without any changes.