A unique business model emerged during the Las Vegas recession. A company familiar with spreading video lottery games in Oregon built a business model that was aimed at those fed up with full-scale casinos. That company built small slot arcades under the Dotty’s brand. It was immensely successful, even while unemployment tripled and housing prices collapsed in Las Vegas during the end of the 2000’s.
Dotty’s and businesses that built upon the model created friendly establishments that would remind most people of mom’s kitchen. The machines in Dotty’s are typically Game Kings or U1s. These spread a variety of video poker and keno titles. The returns on the games are often better than what are found in locals taverns, but worse than paybacks on machines in locals casinos.
Nobody spoke up when business and liquor licenses were issued based on these models until it became obvious that these establishments were popular among the demographic important to full service casinos.
Dotty’s opponents cite the fact that gambling must be incidental to the primary business to operate under a restricted gaming license. Dotty’s is a bar that spreads video gambling, much like locals taverns do. These opponents argue that Dotty’s does not offer a full service kitchen or book any substantial cash sales from alcohol, as opposed to taverns that often operate 24-hour kitchens and large seating areas.
Restricted Gaming Licenses Rely on Video Poker
While Dotty’s may not be setup as a restaurant, or even a traditional bar, most of its tavern competitors cannot claim that gaming is not a primary business. The percentages for food and beverage may be higher at establishments that offer a full kitchen and seating area, and may even be more than 50 percent of total sales, but many would have difficulty keeping the doors open without gamblers.
Full service casinos have a better argument. These properties are required to operate at least 300 hotel rooms and at least one 24-hour dining establishment. Most provide services beyond this, though some smaller locals casinos do not. From that point of view, it is hard to differentiate between different tiers of taverns.
Too Late to Stop Existing Dotty’s
The Dotty’s business model was approved without any serious opposition five years ago. More were approved after it was obvious what the nature of the business was. It is too late to speak up now.
If this type of business is in fact illegal, the time to address that was when the business and liquor licenses were issued. Waiting until the company was successful to try to ban it is completely unreasonable. If Dotty’s is put out of business retroactively, it could hurt innovation in the future gaming market.
Banning existing Dotty’s now tells prospective business owners that they can try anything and if they fail then that is a part of the cycle, but if they discover a niche, they will have to defend it before local and state governments or have to alter the units at great expense.
It would be acceptable to stop future businesses from operating under this model. That is not what is happening though. The current fight seeks to cover existing units by changing the rules in the middle of the game.
Dotty’s is Unacceptable, Yet Grocery Store and Gas Station Slots Are?
One gaming segment that most Las Vegas tourists do not see is video gambling in grocery stores and gas stations. Residents go to the store for milk and bread and sometimes stop to gamble on the way out of the door. The machines are often directly in front of the cashier area. These establishments fall under a similar restricted gaming license, they just don’t typically serve alcohol.
It is obvious that gaming in this scenario is incidental to the primary business of selling groceries or gasoline. The games are just as bad, and often worse, than taverns and locals casinos. Players sometimes sit with carts full of recently purchased groceries while mashing buttons hoping for a royal flush or keno 7-spot.
It is interesting that gaming inside grocery stores and gas stations was not targeted as this seems to be far more out of place than a bar with standalone machines. Maybe that is because one of the companies behind the lobby against Dotty’s and similar establishments operates the slot route for many retail stores. File that one under the glass houses cliché.
All Locals Gambling is the Same
Nevada residents accept the fact that gambling is everywhere. From an objective point of view, one cannot differentiate between gambling at a tavern with food, a slot parlor, or grocery store. It is all gambling and has been accepted by most that call Nevada home.
In this writer’s opinion, you cannot force one version of established gaming out of business by claiming that it goes too far without taking a closer look at the entire restricted gaming industry segment. I doubt that anyone really wants that to happen.
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