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Stores OK with releasing Iowa Lottery TouchPlay data

Feb 24, 2006, 7:11 am

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Iowa Lottery

Iowa convenience store operators, whose sales information has been made public for years by the Iowa Lottery, say they won't try to block the release of financial information requested by The Des Moines Register about TouchPlay machines.

"We don't have a dog in the fight. We don't care," the president of the trade group that represents convenience stores said Thursday. "It's always been public. All lottery sales are public information by location."

Dawn Carlson of the Petroleum Marketers and Convenience Stores of Iowa said the lottery's warning to companies with a financial stake in TouchPlay machines has caused confusion in her industry.

Carlson said many of her members have been rushing to compile data to provide to the Register.

The Iowa Lottery alerted businesses involved with TouchPlay games that it would release financial information unless one of them went to court to block the move.

In matters other than TouchPlay, the lottery has a history of providing information to the public through the news media.

For example, after the winning ticket was sold in December at the Beaverdale Dahl's in Des Moines for Iowa's largest Powerball jackpot, lottery officials said that 609 tickets were sold at the store for the drawing and that the store would receive a $10,000 bonus payment.

The lottery also routinely releases sales information about individual stores and lottery product sales. In 2000, for example, the Iowa Lottery released information about the stores that had the highest Powerball ticket sales that year. Quick Shop Foods in Ottumwa sold the second-largest amount - $561,804.

Mark Edelsheiser, owner of that store for the past eight years, said he does not remember being notified by the lottery before information was released, though he noted that he receives a lot of memorandums from the government agency.

"I know they release information to The Des Moines Register all of the time. It's standard procedure," he said.

"I don't have a problem with the public knowing. It's a law. Anytime you are involved with something that is regulated by government, it's all public record," said Edelsheiser, who has four TouchPlay machines in his store.

Mary Neubauer, a lottery vice president, said information about the TouchPlay machines is different because the devices are owned by private companies.

When sales information has been released in the past, she said, the lottery has owned the game devices and hasn't notified companies in advance.

"In any of those situations, all of the equipment involved is either owned or leased by the Iowa Lottery, so the only concern that is involved is that of the Iowa Lottery. This is the first instance where a media request for information has involved sales data for equipment that is owned by private companies," she said.

A top lottery official sent a letter to all companies with a financial stake in the TouchPlay project last week advising them that the Register was seeking the information. The letter noted what part of Iowa law could be used in an attempt to block the request. It gave the group a March 2 deadline.

Open records advocates and some lawmakers have said the letter creates the appearance that the lottery is favoring private companies' interests over the public's right to know.

"If you have a request for information and your first action is to tell other people there's the request and how to stop the request from being answered, it creates the appearance that the lottery is in cahoots with the manufacturers and distributors," said House Speaker Christopher Rants, R-Sioux City.

Gov. Tom Vilsack and the Iowa attorney general's office have defended the lottery, saying it was only fair to notify companies with a financial stake that information that could affect their business was about to be released. The lottery said it acted at the recommendation of the attorney general's office.

On Wednesday, Vilsack, a Democrat, said the lottery's notification of businesses "seems to be part of openness, letting people know what's happening, not keeping it secret."

Legal action planned

Bill Wohlers of Redline Vending, president of the Iowa Operators of Music and Amusements, has said he plans to take legal action to block the information from becoming public.

He has about 100 TouchPlay machines.

Wohlers said the information won't serve a public good, and its release would put companies at a competitive disadvantage. He also said the information would make retailers vulnerable to theft.

"I think the request maybe goes a bit too far," he said.

Mike Mahaffey, chairman of a special task force set up by Vilsack to review issues raised about the devices, which resemble slot machines, said he believes the records should made public.

"There is a lot of money involved. That's part of this that is somewhat troublesome. Not that money in itself is bad, but any time you get this much money involved there is a lot at stake," said Mahaffey, a vocal opponent of gambling in Iowa and former member of the Iowa Racing and Gaming Commission.

"People do have the right to know who is making the money and who is having the influence," Mahaffey said.

The largest push back on the request for the information seems to be coming from companies that own the machines. Those companies aren't necessarily the owners of the businesses where the machines are located.

TouchPlay machines are placed in 2,800 locations such as taverns and convenience stores in Iowa.

A moratorium has been placed on new machine orders while the Legislature and the task force review the issue.

About a month ago, the lottery gave the Register a list of all locations of the machines. It also provided weekly figures for the revenue of all of the machines for the past fiscal year.

The database included the names of the 74 companies that own machines and 15 that were licensed by the lottery to be operators but had not yet placed machines by Jan. 7.

The state receives 24 percent of the TouchPlay machines' profit - an estimated $30 million of $125 million this fiscal year.

The rest is shared among the machines' manufacturers, owners and retailers.

Terms unknown

Details of the profit sharing are not known because the contracts are not reviewed by the state, Iowa Lottery President Ed Stanek has said.

He has estimated that manufacturers are collecting about 15 percent of the take.

Scott Henneman of Oasis Gaming, which manufactures TouchPlay machines, said his company is not considering any efforts to block the records release because Redline is already planning to do so.

Henneman said he understands the objections. He declined to say how much his company is collecting from the roughly 2,000 machines it has in operation.

Henneman said the owners of the machines have different contracts with the site owners over the split of the TouchPlay profits.

Releasing the information will inform his competitors of what his arrangement is and give his competitors an unfair advantage, Henneman said.

"It would give them inside information as to what the business arrangement, the contractual relationship is with that site," he said. "Not all of those arrangements are exactly the same."

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