gaming:

Dotty’s charges Clark County leaked trade secrets

Dotty’s near Eastern and Serene in Henderson is shown Thursday, March 24, 2011.

Dotty's

Cindy Clark plays a slot machine at Dotty's near Eastern and Serene in Henderson on Thursday, March 24, 2011. Launch slideshow »

The Dotty’s locals gaming chain has beefed up its lawsuit in Las Vegas against Clark County, now charging that Dotty’s confidential financial information has been leaked to competitors and the press.

Dotty’s owner Nevada Restaurant Services Inc. initially sued the county and the County Commission on May 17 in federal court in hopes of overturning an ordinance effective April 19 requiring Dotty’s and similar establishments to have bar-top gaming like traditional Nevada gaming taverns.

Dotty’s business model involves slot machines that stand alone and are grouped in brightly-lit strip mall locations – a business model targeting women who don’t like the traditional bar scene.

Competitors say Dotty’s is operating unfairly since they say its gaming revenue is not incidental to its main business of selling food and drinks – charges denied by Dotty’s.

In an amended lawsuit filed Monday, attorneys for Dotty’s complained that at the direction of Commissioner Steve Sisolak, the county business license department conducted a non-routine audit of Dotty’s in October and November.

"During the audit process, representatives from the department acknowledged that the business records provided by Dotty’s pursuant to the county’s audit process would 'be treated as confidential.' Indeed, the Clark County Code specifically codifies the guaranty that such information will remain protected," the amended suit charges.

"Shortly after the audit was conducted and from approximately December 2010 through March 2011, certain board (of County Commission) members began disseminating Dotty’s financial and revenue-source information to Dotty’s competitors, the public and the press without Dotty’s consent or authorization and in direct contravention of the county’s promise and legal duty to treat this information as confidential," the suit charges.

"Adding insult to injury, the confidential information was not merely disclosed, it was grossly and inaccurately inflated in public statements to enhance and support the argument that Dotty’s gaming component is not merely 'incidental' to its overall revenue and to fuel the crusade against this successful and lawfully conducted business," the amended complaint says.

This alleged leaking of information resulted in new claims against the county in the amended lawsuit of public disclosure of private facts, misappropriation of trade secrets and negligence.

"The county’s public disclosure of Dotty’s private, confidential, and proprietary audit information was offensive and objectionable to a reasonable person of ordinary sensibilities and not a matter that is of legitimate concern to the public. This public disclosure of private facts has caused Dotty’s to suffer damages, which it is entitled to recover by this action," the amended lawsuit charges.

The amended suit continues to focus on allegations that the County Commission violated Dotty’s due process rights when it failed to properly notice a workshop on the bartop-gambling issue and didn’t provide Dotty’s a chance to be heard; and failed to provide notice of what exactly the commission was considering.

The suit alleges the commission was encouraged to act against the Dotty’s business model by Sisolak, rival tavern chain owners, casino competitors Station Casinos Inc. and Boyd Gaming Corp.; and the casino trade group the Nevada Resort Association.

These competitors gained the attention of certain commissioners and the competitors "worked to propose laws to outlaw Dotty’s successful business model, with the hope that displaced patrons from Dotty’s will redirect their business to these competitors," the lawsuit charges.

The suit complains that requiring the installation of bar-top machines in 21 approved Dotty’s taverns "is not a permissible exercise of police power of the county because it serves no legitimate public interest."

Attorneys for the county have not yet responded to the lawsuit filed by Dotty’s or a similar complaint filed by Jackpot Joanie’s.

The Dotty’s issue may come up again this week when the state Gaming Control Board considers applications for two Dotty’s locations.

In its amended lawsuit, Dotty’s said that in the past it has routinely gained county licenses after receiving approval from state gaming regulators.

"Dotty’s received its initial approval from Nevada’s gaming regulators in 1995 and has been successfully operating taverns throughout the state ever since," the lawsuit says. "When Dotty’s first received its initial approval after describing its business model to the gaming regulators in full detail, then-Nevada Gaming Commission Chairman Bill Curran skeptically told Dotty’s owners, `We wish you good luck. There is always room for somebody that has a better mousetrap."’

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  1. Everyone in Clark county can Thank Mr. Sisolak for all the legal costs that are going to be involved in these lawsuits.

    He is trying to save you from all the evils of Las Vegas.

    Until he started this nonsense there has not been any PUBLIC complaints about Dotty's. Once he stirred the pot a few people showed up to protect their neighborhoods. Not before though. Funny how that works.

    They will lose this lawsuit at a great cost to the taxpayers of Clark County.

  2. Once again, some county flack carries the water for the gaming industry and attempts to stifle competition. In this case it appears to be Sisolak, a guy who is usually on the side of common sense. I have never patronized a Dotty's location and do not plan to, but I object to the coersive methods being used by public officials to vilify a legal, taxpaying and obviously successful business. This is not why we elect County Commissioners nor do we expect them to takes sides and favor one competitor over another. Enough already! Stop the BS, Sisolak!

  3. Station Casinos & other local Casinos have for years prevented local businesses to expand because they didn't want Competition. When I was growing up in Vegas, West Hills Bowling Lanes on Charleston & Decatur wanted to remodel it's place, with help of gaining more then the 15 machine max to pay for it. Palace Station & Arizona Charles prevented it and used it's power to stop anyone from doing it ever again in Las Vegas. The sad part is Arizona Charlies started as a competitor to that same bowling alley, when it began as a bowling alley years before. When they built the the Casino attached to the Bowling Alley, they promised to keep the bowling alley. Promised broken & they didn't want the same thing happening down the street from them. As you know, West Hills is no more and a Super Walmart is at it's location.