For the time being, Nevada’s taverns will continue to rely on standalone slot machines and ersatz “buddy bars” for revenue, after a Clark County judge rejected legal arguments to overturn a bar top shutdown that has been in place since July 10 in a bid to halt the spread of COVID-19.
The directive by Gov. Steve Sisolak to close bars and bar top areas inside taverns and restaurants in six counties silenced a large portion of Nevada’s restricted gaming business – those locations with 15 or fewer slot machines.
The judge’s order, which was issued late Monday, was in response to a lawsuit filed by the operators of 62 Las Vegas-area taverns seeking to set aside Sisolak’s directive.
“Although plaintiffs’ bar and tavern businesses contribute to both the economic welfare of the community and substantial employment of the members of the community, economic rights, such as alleged by plaintiffs, are not recognized as fundamental constitutional rights,” Clark County District Judge Kerry Earley wrote in her decision.
It was unclear if the tavern operators would appeal the judge’s decision. However, at least one tavern operator is hopeful a meeting of the governor’s newly created Mitigation Task Force on Thursday could lead to the bar tops reopening that evening.
“We have the right to appeal but feel that (a new directive) is giving us the possible opening,” said Roger Sachs, who operates three Steiner’s – A Nevada Style Pub in Las Vegas.
Last week, the Gaming Control Board said restricted gaming operators could have casino-style standalone slot machines that touch the bar top areas, in order to connect with the location’s slot management system. Slot machines placed in “buddy bars,” a term that describes sit-down tabletop slot areas, could also be utilized.
The gaming regulators’ notice came after tavern operators were given permission by county and municipal governments to remove slot machines from their bar tops and place the games inside traditional slot machine cabinets.
However, the relief solution hasn’t been a workable option for some tavern operators, due to space limitations and overhead costs associated with relocating the games.
Nevada has 2,451 restricted gaming locations that collectively operate some 17,600 slot machines. Clark County alone accounts for more than 1,600 of the restricted gaming businesses, with more than 13,200 slot machines, according to the Gaming Control Board.
Grocery stores, convenience stores, and drug stores, many of which also have restricted gaming slot machines, were not affected by the governor’s directive.
The judge ruled Sisolak was within his power as governor to close the bars and bar top areas in an effort to slow the pandemic.
“Although a rational basis review allows a court to consider any reasonably conceivable state of facts that could provide a rational basis for the classification, there is no legal authority that allows a court to review events subsequent to the enactment of the challenged state action,” Earley wrote.
Sisolak spokeswoman Meghin Delaney said Tuesday the governor’s office would not comment on pending litigation.
Restricted gaming operators were required to adhere to the same COVID-19 health, safety, and cleaning guidelines, which also included social distancing and capacity requirements. The protocols were established by Nevada gaming regulators ahead of the state’s June 4 reopening of gaming following a 78-day shutdown.
Las Vegas attorney Dennis Kennedy, representing the taverns in the lawsuit, told the judge that many operators went to great expense to comply with the guidelines for their bar top slots, including the addition of plexiglass dividers between games.
Nevada taxes restricted gaming locations through quarterly and annual fees per machine, far different than casinos, which pay 6.75% monthly on taxable gaming revenue in excess of $134,000.
For the first five games, the quarterly fee paid to the state is $81 per machine. The locations pay $141 per quarter for each of the next 10 machines. Under the formula, the total annual tax for a location with 15 slot machines is $11,010.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
