Las Vegas Sun

March 19, 2024

Another duel for Dotty: Slot parlor chain facing scrutiny in city of Las Vegas

Dotty's

Justin M. Bowen

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

Less than six months after Clark County commissioners passed sweeping new rules targeting so-called slot parlors, popular tavern chain Dotty's is under scrutiny again over its business model — this time in the city of Las Vegas.

The questions being raised by city councilman Bob Beers have led to two delays in Dotty's being granted a permanent restricted gaming license for a new location near Sahara Avenue and Hualapai Way. That location, which opened in March, is operating under a temporary license.

An attorney for Dotty's said last week that the application, which has received state gaming commission and gaming control board approval, was being subjected to "a new level of scrutiny" that isn't applied to other tavern gaming applications the city council routinely approves or the dozens of other Dotty's already located in the city.

The attorney, Susan Johnson, also raised the specter of Station Casinos, a giant of the locals gaming market and Dotty's chief antagonist.

"What this boils down to is this particular location is unfortunately about a mile from Red Rock Station, so suddenly an additional level of scrutiny is being asked of you," Johnson contended.

Beers said he didn't have any communication with Station Casinos or any other groups before pulling Dotty's application for review.

"This is the first time I've had a Dotty's come up (in my ward) and they're pretty clearly not the same as other applicants," Beers said. "In the end the singling out argument draws attention away from underlying situation, which is that gaming regulators made the decision about Dotty's based on several incorrect facts."

The issue in Las Vegas, as it was in Clark County, is over how much revenue a typical Dotty's location brings in from slot machine gaming compared to the sale of food and drinks.

State and local gaming laws require revenue from non-casino slot machines be incidental to a primary business like running a bar, restaurant, convenience or grocery store.

Dotty's well-lit, homey decor and relaxed atmosphere have made it a hit with a largely female clientele and differentiate it from the typical sports bar. The chain, which does offer a limited menu and full bar, has spread to more than 100 locations statewide since arriving in 1996 and has spawned a wave of knock-off competitors. But critics say Dotty's patrons are drawn less for the food and drink and more for the opportunity at unfettered, uninterrupted gaming, allowing the company to reap big profits without the investment and taxes required from casinos that receive more expansive, unrestricted gaming licenses.

Dotty's representatives insist the company complies with all state and local gaming laws. But complaints about its business model have persisted, fueling a fierce political battle over bar gaming involving Dotty's, Station Casinos and local governments on and off for the last decade.

Clark County spent much of last year debating revisions to its tavern gaming rules before passing an ordinance in December requiring bars to either operate a full kitchen or take in less than 50 percent of revenue from gaming.

Beers said as far as he could tell, the Dotty's location on Charleston Boulevard did not have a primary business other than gaming.

"The question is ... whether there is a primary purpose besides gaming," Beers said.

In a review of Dotty's application with the state, Beers said he found several errors in Dotty's calculations that underrepresented how much time, space and money would be put toward the slot machines of its new tavern, a key factor in determining its primary business. Dotty's initially predicted it would make 67 percent of its revenue from gaming, but that number has actually been 91 percent through its first several weeks of operation, with another 8 percent of revenue coming from cigarette sales, according to Las Vegas' business licensing department.

Johnson, Dotty's attorney, said gaming revenues would fluctuate over short periods of time depending on player wins and losses, making it inaccurate to base judgements on only a few months of figures.

Beers sent a letter to the Gaming Commission and Gaming Control Board asking the agencies to revisit the application considering the new information he put forward and to clarify what the tavern's primary business is found to be. He's still awaiting a response. Until he does, Beers says he plans to continue holding off on approving Dotty's permanent license, although he could be overruled by a majority of the council.

The Dotty's location will be allowed to remain open and offer slot machine gaming until August under a temporary license approved by the council last week.

Beers hasn't indicated any interest in revisiting the city's broader tavern gaming rules like Clark County did.

"I'm trying to just stick to the law," Beers said. "I hope (state gaming regulators) look at it with new facts and either validate their earlier decision or change their earlier decision."

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