Iowa Touch Play Settlements Happening Very Quietly

Have you noticed that the Iowa Lottery Touch Play settlements have been happening very quietly?  A total of $3.4 million has been paid thus far to settle lawsuits and more settlements are on the horizon.

Apparently this has set off a squabble among Iowa lawmakers about who should pay for the settlements. 

Senate Republican Brad Zaun believes it should fall on the back of the Iowa Lottery which is funded by ticket sales rather than taxpayers.  Others believe the legislature is responsible because of the vote in 2002 to bring in the games and then later deciding in 2006 to pull the plug after lawmakers received widespread criticism for allowing the resembled slot machines to show up in grocery stores and other retail locations.

I am not sure in the end whether it really matters where the money comes to settle the cases.  Either way, it likely comes out of the taxpayers' pockets because the profits from the Iowa Lottery are mixed into the Iowa General Fund and also state gambling treatment programs.

As you might imagine, passions can run high among political types.  But a legitimate question must be asked about whether the state should settle these cases at all.  Is there liability?  Were promises made and not kept or did these companies take a business risk knowing full well that the legislature could change their mind at any time?

The initial rulings on the injunctions went well for the state.  The court ruled the Plaintiffs were not likely to show that the legislature exceeded its authority. Further, the Court found there was nothing in any documents or agreements that bound the State of Iowa to maintain its business relationship with the TouchPlay vendors.  Is there any reason to believe that would be reversed in a trial on the merits? 

In business litigation, settlement eliminates risk.  It never hurts to explore settlement.  But taxpayer funded settlements deserve a little more attention than we are seeing thus far in the TouchPlay cases. 

photo on flickr by Jeff Kubina