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Iowa Settles Final TouchPlay Lawsuit

Posted On: 7/9/2010

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TouchPlay, Iowa TouchPlay, Iowa Lottery Authority, Tom Miller, Iowa lottery settlement, Red Line Vending, Lottery Service Corp., William Wohlers, Thomas Wohlers, video poker, video game, amusement machine, amusement machine operator, coin-op news

DES MOINES, IA -- The last remaining lawsuit involving TouchPlay was settled on July 6, four years after Iowa's government barred the video gaming machines, with $150,000 awarded to the plaintiffs.

The payment, approved by the State Appeal Board, goes to Red Line Vending (New Hampton), Lottery Service Corp. of Iowa (Charles City) and associated operators William and Thomas Wohlers.

In 2004, the Iowa Lottery Authority encouraged operators to purchase slot-type TouchPlay devices. It spent millions on more than 6,700 machines, which were installed in some 3,200 bars, restaurants, convenience stores and supermarkets statewide.

That market generated between $80 million and $125 million a year, according to various estimates, and yielded up to $30 million in tax revenues. But public protests over the highly visible machines prompted the state Legislature to suddenly outlaw TouchPlay in May 2006.

In response, operators, distributors and manufacturers filed numerous suits against the state and its lottery authority, charging that the confiscation of property and undue financial damage caused by TouchPlay's shutdown was unconstitutional.

Iowa initially claimed the charges were groundless, but eventually settled the claims for $18.4 million.

Following the final settlement announcement on July 6, state Attorney General Tom Miller said all the settlements cost Iowa taxpayers far less than it would have going to court. Initially, the plaintiffs had collectively demanded some $900 million in damages.

The settlements therefore "saved the state from potential economic catastrophe" while treating operators "fairly," Miller said.

But William Wohlers of Redline, who had operated 200 TouchPlay machines, said his settlement would make up less than 20% of his losses. "I've invested over $50,000 in legal fees and I don't have the money to continue to fight," Wohlers told the Des Moines Register. "They basically got me where they wanted me."