Retroactive gaming rules force lawsuit, call for revamped system

Surprise, surprise, Dotty's has sued the Nevada Gaming Commission and the state of Nevada over the very issue I predicted ---- the retroactive aspect of new regulations.

If Dotty's wins, you'll most likely pay the legal costs incurred by Dotty's as well as the state.

The case was assigned to District Judge Valerie Adair, who was asked by Nevada Restaurant Services (aka Dotty's) to overturn the commission's retroactive aspect of the regulation changes permitting up to 15 slots in a tavern.

The case filed by Kemp, Jones and Coulthard on Wednesday minced no words about the role and motives of Station Casinos and the Nevada Resort Association, plus said things likely to tick off regulators who vote on Dotty's issues.

Dotty's contended Station Casinos headed the push to squelch the Dotty's model. The purpose of the regulation change "was and is to unreasonably interfere with Dotty's business, destroy its profits, and redirect its patrons to its competitors, causing Dotty's to suffer irreparable harm."

The retroactive provisions are "intentionally and blatantly anti-competitive," the documents said. The Gaming Commission's adoption of the retroactive provisions is a taking of Dotty's property "for the very non-public purpose of giving its competitors a private, competitive advantage, and without just compensation to Dotty's, in violation of Dotty's Constitutional rights."

OK, I can say that more bluntly using gambling terms. Dotty's believes the four commissioners who voted for the regulation changes were shilling for Station Casinos and the resort association. Only Commission Chairman Pete Bernhard voted against fronting for big gaming because he thinks the changes were unnecessary.

In a righteous world, Station Casinos and the resort association should be footing the legal bills because I agree with Bernhard that these changes were done at their behest and for their benefit.

The commission decided that going forward, new taverns approved for up to 15 slot machines must have a bar that seats nine people, a kitchen open half the time, a restaurant and 2,000 square feet of nongaming space.

The retroactive aspect is that taverns approved since Feb. 1, 2001, must put in a bar that seats nine people. That's so important to the protection of Nevada gaming. Not.

Dotty's estimates that retrofitting its restricted operations will cost $6 million. The Gaming Commission approved all 57 between 1995 and 2011.

What changed this year? Dotty's competitors pushed the gaming commissioners and the county commissioners for regulations to stop the Dotty's proliferation, calling it a slot parlor, not a traditional tavern.

Say that's true. The commission is entitled to change regulations. My gripe is the retroactive role.

Now, Dotty's attorneys want to know the details of that lobbying effort by Station Casinos and the resort association. The four commissioners who fought for the gaming changes ---- Tony Alamo Jr., John Moran Jr., Joe Brown and Randall Townsend ---- can expect to be questioned in depositions about their relationships with Station Casinos and the resort association, which could give an insider's view of how gaming policy is made when the big boys want something.

Retroactive regulations created a problem that would have faded away otherwise.

My condemnation of the Gaming Commission's retroactive regulations is tame compared with Elko Independent Publisher Fred Weinberg. He began his column: "It is time that we disassembled the membership of the Nevada Gaming Commission, used some sanitary method to pry the current membership's lips from the posteriors of the big gaming companies as well as their lobbyists and start over."

He ended it saying, "It's time to blow up that system and start over."

I'm a child of the '60s, yet no advocate of blowing things up. But Weinberg showed the passions that the Dotty's dispute creates in rural Nevada, not to mention among local customers who enjoy granny-style gambling.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. Email her at Jane@reviewjournal.com or call her at (702) 383-0275. She also blogs at lvrj.com/blogs/Morrison