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9th Circuit rejects Dotty’s appeal of Clark County slot machine regulation

The 9th Circuit Court of Appeals has rejected a legal effort by the owners of the Dotty’s and Jackpot Joanies slot machine taverns to throw out Clark County regulations covering the operation of the gambling devices.

A three-judge panel ruled the Clark County Commission “performed its responsibilities in the normal manner prescribed by law” when it approved a slew of changes in December 2014 that required taverns to operate a full-service kitchen and embed more than half of their 15 slot machines into a bar top.

The ordinance, which passed by 6-1 vote, was aimed at taverns at the Dotty’s tavern chain, which has been scrutinized as operating more like a slot machine parlor than a tavern.

Clark County also ruled that taverns, not able to comply with the ruling, had to show the slot machine revenue was 50 percent or less than other revenue.

Nevada Restaurant Services, which operates Dotty’s, sued Clark County in U.S. District Court. The company was joined by Jackpot Joanies LLC, which operates a tavern model similar to Dotty’s.

The 9th Circuit affirmed the ruling by U.S. District Judge Andrew Gordon that supported Clark County. The 9th Circuit opinion was handed down Tuesday.

Writing for the court, Judge Edward Chen said the Clark County ordinance “was legislative rather than adjudicatory in nature.” The court also ruled the tavern operators “received multiple notices” concerning the proposed changes and “were extended repeated opportunities” to object to the new rules.

When the commission approved the changes, Commissioner Chris Giunchigliani cast the lone dissenting vote and had pushed unsuccessfully for an amendment allowing existing taverns more time to comply to the new regulations.

The appellate court also ruled Clark County put forward “a rational justification for the retroactive nature” of the changes.

If a tavern was unable to accomplish at least one of the requirements, it must reduce the number of slot machines from 15 to seven. The ordinance is effective immediately for future tavern applicants.

Clark County Commission Chairman Steve Sisolak said he was surprised by how fast the appeals court ruled. The hearing was held Dec. 11.

“I thought the decision was well thought out and reasoned,” Sisolak said. “It hit on all the points we argued.”

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Find @howardstutz on Twitter.

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