The state’s casino industry and the state-run lottery are feuding. At issue are the Iowa Lottery “touch-play” machines in bars, convenience stores, grocery stores and restaurants around the state. T

The Iowa Gaming Association which represents the state-licensed race tracks and riverboat casinos says those machines should be regulated just like the slot machines in their facilities. The Gaming Association also says residents in each of the towns where those “touch-play” games have been placed should have voted on having them in town, just like voters decided in gambling referendums whether the casinos could open.

Wes Ehrecke is executive director of the Iowa Gaming Association and speaks for the casinos. “People should decide whether they want these types of machines in their area,” Ehrecke says. “We’ve never had an issue with the lottery — instant tickets, Powerball and the like. But now you have machines that are showing up in a large number of locations and are these indeed what we want in our area?”

Iowa Lottery spokeswoman Mary Neubauer says by secretly sending their complaint to the governor rather than the Lottery’s governing board, the casinos have shown that they’re positioning for a political battle over the machines. “Our initial reaction was one of just extreme disappointment because if their concern truly is public policy…why didn’t they ever bring these concerns to the Iowa Lottery or to the Iowa Lottery Board which is appointed by the governor and sets policy for the lottery and oversees lottery operations,” Neubauer says. “This is simply a political fight and I don’t think the real intent is to have a serious, meaningful discussion of the issues.”

Ehrecke, the spokesman for the casinos, questions whether the “touch-play” machines in retail shops, bars and restaurants are being watched to make sure underage kids aren’t playing. Ehrecke says D-C-I agents should monitor the machines just like the agents monitor activity in the casinos. He contends minors are playing the games and no one’s being penalized.

Neubauer, the Iowa Lottery spokeswoman, disputes that. Neubauer says there have been “no instances of underage play on the machines.” Neubauer says Ehrecke is wrong, there are penalties if someone underage were caught playing. The Lottery retailer would be penalized and under a first violation would not be able to sell Lottery products for a week. A second violation would mean a loss of Lottery sales for a month, which Neubauer says would be a huge loss for a retailer. Neubauer says by comparison, the penalty for underage gambling is $10,000 for the casinos, which she says amounts to how much the casino at Prairie Meadows grosses in just half an hour.

The casinos, though, have more beefs. Ehrecke says when the Lottery first introduced the concept, the machines were to dispense “pull tab” tickets with sound and video ads. Ehrecke says the machines that are in Iowa stores today look, act, sound and feel just like a slot machine, and dispense “cash vouchers” just like a slot machine. “We will compete with anybody on a level playing field,” Ehrecke says. “This isn’t about competition. This is about fairness and regulation…and equity.”

Neubauer says the Lottery products are offered statewide and it’s only fair that the “touch-play” machines are spread out statewide, too. There are about 4,500 “touch-play” machines in about 2,500 Iowa businesses. Neubauer says they’re in businesses which have sold Lottery products in the past and understand how to monitor “age-sensitive products.”

Neubauer says there’s no evidence the “touch-play” machines are eating into slot machine casino income because it continues to grow. “For years, (the Lottery and the casinos) have peacefully coexisted and I think we have both run successful, well-regulated programs. It is my hope that that kind of relationship can continue but I really think it is being compromised at this point,” Neubauer says. “There are thousands of other businesses that also are in existence and deserve the opportunity to do business and those are the businesses that have ‘touch-play’ are doing a good job.”

Ehrecke, in a letter to Governor Vilsack, said the “vast majority of the consuming public” thinks the Lottery’s “touch-play” machines are slot machines, and the differences between a slot machine and a “touch-play” machine are “indistinguishable.”

Ehrecke, on behalf of the casinos, asked the governor to immediately set up a task force to examine new regulations for the Lottery. Iowa Lottery C-E-O Ed Stanek said in a letter to the governor that comparing the Lottery’s “touch-play” machines to slot machines is like “comparing beer to near beer. Near beer looks, smells and tastes like beer, but it does not contain any of the bad stuff.” Stanek says the “touch-play” machines will help move the Lottery out of the “paper era” into the “electronic era, as all savvy businesses are doing.”