Missouri Puts Slots-Style Machines in the Spotlight

For years, slot machines have been popular attractions and a source of entertainment for travel-weary Missourians. These are often found in small clusters inside truck stops, inside gas stations, diners, and even convenience stores, and they’re marketed as “pre-reveal” or “no-chance” games rather than traditional slots. 

These machines operate outside the casino system, with no formal payment standards or regulations, thus operating within the “grey market”. Now, operators are feeling the heat in Missouri after Attorney General Catherine Hanaway called a probe into these gaming machines. 

State authorities are now looking at their money flow—the billions of dollars from players’ bets to companies that own them. Lawmakers are also debating whether it’s about time to legalize or even tax these gaming devices.

Slot Machines as Illegal Gambling Devices?

In an interview with the Missouri Independent, Attorney General Catherine Hanaway shared their plans to probe into the operations of these gaming machines. Specifically, the team’s looking at the operators’ money flows, slot machine locations and the ownership structure, enforcement action.

The state’s action against slot machines and uts operators stems from a federal civil court ruling that classified the games of Torch Electronics as “illegal gambling devices”.

In 2021, Warrenton Oil and Torch Electronics sued the state’s Highway Patrol and the Department of Public Safety. They asked the court to decide that their devices are “not gambling devices” under the state’s gambling statute (section 572.010).

The Missouri Gaming Association, also representing licensed casinos, filed a counterclaim, asking the court to declare Torch’s gaming machines as illegal under the state’s constitution, and asked the company to stop operating these.

Missouri Looking to Legalize Video Lottery Terminals

Hanaway shared that the Internal Revenue Service (IRS) and the FBI are joining the probe over concerns related to money laundering. While the state’s attorney’s office is busy investigating these gaming machines, lawmakers are prepping up a proposal to legalize and tax video lottery terminals or VLTs. 

According to the bill’s supporters, this plan addresses the unregulated market and provides players with licensed machines, while raising revenues for the state.

The bill’s supporters cite the creation of payout standards, plus additional state revenues of up to $350 million within two years.

However, the VLT bill has its share of critics. For example, Representative Don Mayhew has shared his opposition, while Senate President Pro Tem Cindy O’Laughlin warned colleagues to look beyond the tax revenues.

The VLT legislation’s future remains uncertain, with some House leaders expressing their opposition. Currently, the slot machines' virtual equivalent, the online slots in top sweepstakes casinos, remain accessible in Missouri.

REFERENCES:

• VLT Bill