OSKALOOSA — Like almost every community in Iowa, Oskaloosa has been touched by TouchPlay.

The colorful, flashing video lottery machines bear a striking resemblance to the famous “one-armed bandits” of Las Vegas fame. They operate by issuing a slip of paper each time the machine is “plugged” with money. Winning slips are then turned in for cash, as are other lottery tickets.

While they are a source of revenue for any establishment that has them, lottery machines have always been seen as a potentially significant source of revenue especially for smaller, family owned, “mom-and-pop”-type businesses. Conventional lottery machines have existed in Oskaloosa for many years. When this new variety was introduced, a number of local businesses, both local and chain, seeing a potential revenue source, installed the machines. Revenue for the state from the machines was estimated to be between $30 and $40 million.

However, sentiment has turned against the machines. In the public arena, there was feeling that the machines’ resemblance to “the real thing” would entice people to use them more heavily than the more conventional machines.

Wes Ehrecke, President of the Iowa Gaming Association, presented his organization’s stance on the machines. He pointed out that Iowa was the first state in the country outside of Las Vegas and Atlantic City to have riverboat-style gambling and, as such, must adhere to strict regulatory guidelines. Identification of patrons must be checked closely to keep minors off the floors of casinos. If minors are found, the casino must report itself and face a fine of between $1,000 and $10,000. If they do not, they face even stiffer penalties, since security and DCI agents are present at all times to monitor the situation also. Casinos also maintain real-time storage and play back of security tapes.

There are other regulatory guidelines as well. Intoxicated patrons are not allowed on the floor. No ATM machines are allowed on the floor. Casinos adhere to a self-exclusionary policy, whereby addicted gamblers may exclude themselves from the floor of casinos and be arrested if found there. Ehrecke maintained none of these conditions could be met when the TouchPlay machines were installed in public places such as convenience stores, gas stations or supermarkets.

“We need to maintain regulation equity to protect the integrity of gaming,” Ehrecke said.

The Legislature was lobbied extensively by both those promoting the machines and those anticipating their detrimental effect. Eventually legislation was passed by both the House and the Senate and signed by the governor to ban them altogether.

Said Tom Rielly, senator from the 38th District, “around January, I began noticing them in every nook and cranny of the state. I received information that some convenience stores were advertising them as ‘casino-style gambling’ — they had peanuts and pretzels and ashtrays by the machines. Some places would have free food and pop during certain hours.” Rielly acknowledged that the machines were probably a boon to smaller businesses, pointing out that some smaller retailers are taking a loss on gas just to compete with “big box” stores. Still, he emphasized, he would rather find ways to create job opportunities than rely on gambling receipts.

“I don’t want TouchPlay to be the savior of Iowa,” Rielly said. He indicated that the Attorney General will look at some possible compensation for those businesses who purchased the machines. He indicated he would be in favor of giving the state’s 24 percent cut from the machines to those who had invested in them. There has been talk of potential lawsuits on the part of businesses who bought the games, since the games were legal at the time of purchase.

Angela Harrington, co-owner of Spaghetti’s, has two of the TouchPlay machines at the restaurant, although she did not purchase them outright. They were installed by Hawkeye Amusements, with whom she has a revenue-sharing agreement. She indicated she would not be interested in being party to any lawsuit since she had no initial investment.

However, she noted, “We pull in about $200 a week. We’ve got 10,000 square feet here,” adding that she cannot afford to overlook any source of revenue. She went on, “If people are going to do it, they’re going to do it (play lottery machines). People complain that if people play the lottery, they’re not spending money in other businesses. Just because you tell people they can’t spend $50 at Kum & Go doesn’t mean they’re going to come to Spaghetti’s for dinner twice a month.”

Jane Shank, of Cork and Bottle, had two machines installed initially, and two more recently. “I had to wait for them to be built,” she said, indicating the demand that existed. She, too, had a revenue-sharing agreement with Hawkeye Amusements and was not interested in suing the state.

“It has helped,” Shank said of having the machines. “It’s a slow time of year. It’s been nice. I think the businesses that are suing have a right to.” She pointed out that, while she has the gambling machines and also sells liquor and cigarettes, she does not use any of these products.

“I can’t impose my personal beliefs on my customers and I don’t think the state should do it either,” she said.