iowa settles touchplay lawsuit

Deal with division of Krause Gentle worth $1.6 million.

The State of Iowa will pay a $1.6 million settlement to the largest of several companies that sued after the state pulled more than a thousand TouchPlay machines from Iowa businesses.

A statement issued by the Iowa attorney general’s office said state reached the out-of-court settlement in a lawsuit that had been filed by Royal Financial LLC Royal Financial is a West Des Moines company founded by businessman William Krause, whose family owns the Kum & Go convenience store chain, according to the Des Moines (Iowa) Register.

Royal Financial, the largest operator of TouchPlay machines in Iowa, was among several businesses that sued the state in 2006 after the Iowa Legislature banned the gambling machines, 6,700 of which were in gas stations, convenience stores and taverns across the state.

In its lawsuit, Royal Financial claimed Ed Stanek, the lottery’s chief executive, personally asked Krause, Royal Financial’s founder, to get involved in the TouchPlay program.

“Dr. Stanek stated he needed one private party to take the lead and purchase one thousand (TouchPlay devices) in order to make the TouchPlay program viable. Without such a purchase, the entire TouchPlay program could fail. He requested that Krause be that party,” the lawsuit said.

“… The Lottery Authority represented to Royal Financial that the TouchPlay program would last for a minimum five-year period, that Royal Financial would recoup its investment and expenses.”

Under the settlement, the state will pay $1,671,370.50 to Royal Financial, without acknowledging any wrongdoing.

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