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Gaming Guru

James DeHaven

Las Vegas City Council delays decision on Dotty's gaming license

2 July 2015

Las Vegas City Council members on Wednesday put off approval of a gaming license sought by popular tavern chain operators at Dotty’s, delaying action on a controversial license at least one council member had hoped to deny.

They opted for a four-month temporary license extension that will allow the Dotty’s location near Hualapai Way and Sahara Avenue to continue operating while officials ensure the establishment is in compliance with Nevada restricted gaming statutes.

The city is still weighing a compliance study that would dig into the finances of some or all of Las Vegas’ 125 other restricted gaming-licensed taverns.

State and local law requires non-casino gaming revenues to be “incidental” to a bar, restaurant, grocery or convenience store’s operations.

Casino companies and local government critics have for years accused Dotty’s of shirking that rule and running its businesses more like a strip mall slot arcade than a bar, a move they say has enabled the company to set up shop much closer to residential neighborhoods.

In delaying Dotty’s latest application to run a slot-dominated tavern within city limits, a bare majority of council members sided with company representatives, who invited the city to continue studying the issue before rejecting the license.

Company critics have called on gaming overseers and state legislators to take another look at a regulatory scheme they say has allowed Dotty’s to masquerade as a tavern despite collecting more than half of its revenue through gaming and tobacco sales.

State regulators have long awarded the popular tavern chain licenses to operate up to 15 slot machines at more than 100 Dotty’s locations scattered throughout Nevada.

Financial disclosures submitted to the city by the Dotty’s location seeking a city gaming license show the tavern collected 1 percent of its cash through food and drink sales over a three-week period documented after the location opened in March.

The establishment, which is operating under a temporary city gaming license, collected another 8 percent of its revenue through tobacco sales. It amassed the remaining 91 percent through video poker and slot machines — some 24 percentage points higher than the gaming revenue split Dotty’s presented to state regulators.

City Councilman Bob Beers, whose Ward 2 is home to three Dotty’s locations, quoted each of those figures in a pair of letters asking the Gaming Control Board and the Nevada Gaming Commission to revisit discussions surrounding the company’s oft-maligned business model.

Almost two months later, Beers said he is still waiting to hear back from state officials.