Iowa AG, Lottery make first pay-out in busted-flush gaming pacts

Legal News Line Aug. 7, 2007, 3:41am

Tom Miller

DES MOINES -- Iowa Attorney General Tom Miller, hoping to duck a $900 million class action suit, has begun cashing in contractors' chips after the disastrous TouchPlay gambling-machine venture. Miller announced yesterday he had settled on behalf of Iowa Lottery with a former TouchPlay machine distributor/operator for $1.67 million. Iowa Lottery reneged on an agreement with dozens of such contractors in May 2006. Soon afterwards, 73 contractors sued Miller and Iowa Lottery for $900 million over the broken agreements to run 6,700 TouchPlay machines at 3,200 retail locations, LNL reported. Iowa Lottery folded on TouchPlay because of negative publicity likening TouchPlay to slot machines. Yesterday's settlement was with West Des Moines-based Royal Financial LLC, which is connected to the Kum and Go chain of 450 mid-western convenience stores. The stores housed most of Royal Financial's TouchPlay machines. Royal Financial owned about one-fourth of all TouchPlay machines in Iowa and was the state's single largest owner. Its 1,600 machines collected net annual revenue of around $23.6 million, AP reported. "We are pleased to resolve a major portion of the TouchPlay litigation with the Royal Financial settlement," Miller stated in the release. Plaintiffs with litigation pending can expect similar treatment to Royal Financial, he added. "The State will continue discussions with any other interested TouchPlay litigants, and the State intends to treat those plaintiffs in a similar fashion," Miller also stated. The first trial featuring former TouchPlay operators against Miller and Iowa Lottery is scheduled to begin in April 2008.

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