Four years after banning TouchPlay, state reaches settlement

DES MOINES -- Four years after the Iowa Legislature voted to ban TouchPlay, the state has closed the books on the game that generated more than $80 million a year at its peak.

The State Appeal Board July 6 approved a $150,000 claim against the Iowa Lottery Authority and the state to conclude four years of litigation stemming from the ban on the slot machine-like devices that spread from bars to convenience stores and supermarkets.

The state denied and wrongdoing in approving the settlement Red Line Vending, Inc.; Lottery Service Corporation of Iowa, Inc.; William R. Wohlers; and Thomas C. Wohlers vs. The Iowa Lottery Authority and the State of Iowa. The Floyd County District Court case filed in May 2008 alleged damages resulting from the ban.

TouchPlay was introduced after the state pushed the Lottery Commission in 2001 to develop a new lottery program that would generate $24 million in revenue for state coffers. By the time the game was shut down May 4, 2006, there were more than 6,700 devices in more than 3,000 locations statewide.

After the machines were banned, dozens of plaintiffs asserted approximately $900 million dollars in TouchPlay-related claims against the state. Attorney General Tom Miller said he and his staff researched, litigated and settled the claims for $18.4 million, which is less than the state collected in revenue from TouchPlay vendors.

“The TouchPlay settlements saved the state from potential economic catastrophe,” he said. “We treated TouchPlay vendors fairly, acknowledging their substantial losses. At the same time we put in a tremendous amount of effort to minimize the financial damage to the state.”

In February 2008, the state agreed to pay Cedar Rapids-based Camden Amusement $1.05 million as part of a TouchPlay settlement.