End of TouchPlay was costly

Friday, July 18, 2008

A costly mistake is how the Iowa Lottery's TouchPlay game will be remembered. The state has settled many of the lawsuits brought by firms that owned or distributed the video machines that brought in millions of dollars for the state in 2006.

The Iowa Attorney General's office reports that the state will pay out $6.5 million to companies that had invested in the machines, which bore a little too close resemblance to video lottery machines in the eyes of the public.

That resemblance, as well as the number of machines that were in local gas stations, convenience stores and taverns caused a public outcry that eventually resulted in the plug being pulled on the game in May, 2006.

The establishments that had invested in the machines and the high speed Internet connection required to operate them cried foul, and many blamed the established gaming business in Iowa for exerting pressure to end the game.

TouchPlay allowed every small town in the state to have a place that could provide a gaming experience similar, on a much smaller scale, to casinos. That was one of the reasons players, as well as businesses that had the machines, were upset about the end of the game.

The state has settled many of the lawsuits brought against it, starting last August with a payment of $1.7 million to West Des Moines-based Royal Financial, the largest individual owner of TouchPlay machines with about 1,600 of the games. This week, the fifth settlement was announced, $2.9 million to Greater America Distributing and Nebraska Technical Services Inc., both based in Omaha, Neb.

The court date for the remainder of the firms seeking damages is Sept. 8 in Polk County District Court.

We hope that the diligent work of the Attorney General's office will minimize the financial cost of the ending of a game that was doomed before it began.