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EDITORIAL: City Council can’t define Dotty’s ‘incidental’ gaming

The efforts of elected officials to stop the spread of the Dotty’s slot parlor chain have failed because the state body that could settle the legality of the business model has no interest in doing so.

The Las Vegas City Council would be perfectly justified Wednesday in voting to reject a restricted gaming license for the newest Dotty’s slot machine arcade, just outside Summerlin at Sahara Avenue and Hualapai Way. After all, Dotty’s slots are not “incidental” to the business, as required by law. They’re essential.

However, neither state lawmakers nor gaming regulators have bothered to set the slot revenue threshold that defines whether gaming is incidental or not. The ambiguity of that law has enabled Dotty’s to open more than 100 slot parlors across the state and collect gaming revenues that are far from incidental.

Councilman Bob Beers, in whose ward the new Dotty’s sits, said Monday that he won’t support approval of the restricted gaming license. The Dotty’s at Sahara and Hualapai is operating under a temporary permit, and Mr. Beers said Monday that just 1 percent of its initial sales revenues are from food and beverage, 8 percent are from tobacco and 91 percent are from gaming. That’s far higher than the 67.2 percent gaming revenue estimate Dotty’s submitted in its state license application, a figure that by any definition is not incidental.

But the council has no power to set that line. And the city has licensed scores of other Dotty’s locations with identical operations. If the council rejects the license for a single new Dotty’s, the action would expose Las Vegas taxpayers to a lawsuit and force them to bear the burden of a challenge that would have no chance of bringing clarity to state gaming policy.

The Nevada Legislature could have taken up another extended Dotty’s discussion, as it did in 2013. But lawmakers adjourned earlier this month without giving the issue much thought. So it’s up to the Gaming Control Board to set a figure for “incidental” slot machine revenue and chart a clear course for a gaming niche that was never supposed to exist in the first place.

Nevada policymakers never wanted to undermine the large destination resorts that drive Las Vegas tourism — and provide the bulk of the state’s tax dollars — by allowing smaller casinos to proliferate. So taverns, convenience stores, grocery stores and other businesses were allowed to have up to 15 gambling machines, provided they were “incidental.”

But Dotty’s has pushed the boundaries of those standards by making its slots the focus of its business. The much quieter parlors have lots of loyal customers, as evidenced by the growth of the company. But no one goes to Dotty’s to meet friends for a meal or have a drink. Dotty’s customers go there to gamble.

Mr. Beers wrote the control board and the Nevada Gaming Commission seeking guidance on the “primary business activity” of Dotty’s. He hasn’t heard back from either entity.

Gaming regulators know that if they decided to settle the issue, whatever figure they reached would be arbitrary. If 50 percent of a company’s revenue were from gaming, would that be “incidental”? Or 35 percent? And how many restricted gaming licensees would lose their licenses, depending on what figure the control board reached?

The restricted gaming license system is broken. And the Las Vegas City Council can’t fix it. The council should approve the Dotty’s license — and issue a strong call to the Gaming Control Board to clean up its mess.

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