Lawmakers renew effort to crack down on illegal gaming machines in Missouri

The stage for the inauguration of Gov. Mike Parson at the Missouri Capitol in January 2021 (photo courtesy of the Missouri Department of Public Safety).

Missouri law is clear that it is illegal to have gambling machines outside of a casino. 

Yet in bars, gas stations and other gathering spots around the state, games similar to slot machines have been popping up for years. 

So why, despite outcry from some lawmakers, law enforcement and state regulators, has Missouri been hesitant to crack down on these machines?

It’s a question Senate President Pro Tem Dave Schatz, R-Sullivan, hopes to put to rest. 

On Thursday, he set off once again on his annual push to rid the state of these so-called grey-market games, presenting a bill to the Senate’s committee on government accountability and fiscal oversight that would grant the Missouri Gaming Commission authority to go after these machines.

It also allows for the revocation of a liquor license of any businesses found to be allowing the machines to operate on their premises. 

“If we make it clear that having one of these machines will cost you your liquor license, which is probably more valuable than whatever revenue they were generating from these illegal games, that gives businesses something to lose,” Schatz said in an interview with The Independent. 

This year, Schatz believes his odds of success have improved. 

That’s because late last year, Platte County Judge Thomas Fincham found Kansas-based Integrity Vending LLC guilty of promoting illegal gambling in the first degree, a class E felony.

With gaming companies having long argued that these devices didn’t violate state law, observers had been following the Platte County case for clarity on exactly what kind of games are legal in Missouri. 

Among them was Attorney General Eric Schmitt, whose office enforces consumer protection laws. He has said he’s waiting for the Platte County case to resolve before deciding how to spend $150,000 earmarked in this year’s budget to investigate the devices. 

“We’re watching the case in Platte County as it moves through the court system to determine the best path forward and potential next steps,” Schmitt’s spokesman, Chris Nuelle, said in an email to The Independent on Tuesday.

But Platte County Prosecutor Eric Zahnd says the case is already over. Integrity Vending was found guilty and the judge assessed a fine. The company did not file an appeal, he said, “and the time for filing an appeal has lapsed.”

In response to Zahnd’s comments, Schmitt’s spokesman said via email Thursday morning: “As has been clear all along, and as the Platte County case proves, this is a matter for local prosecutors. If the legislature chooses to expand our jurisdiction in these cases, that’s a whole different matter.”

He did not clarify what the office intends to do with the $150,000.

‘Clearly illegal’

Senate President Pro Tem Dave Schatz testifies before a Missouri House Committee in 2019 (photo courtesy of Tim Bommel/House Communications).

The machines operate similarly to what you’d find in a casino. A player inserts money, selects a game and decides how much they wish to wager. Winners get paid by the store cashier. 

Missouri officials estimate there are 14,000 of these machines across the state. 

The Missouri Gaming Commission has deemed them gambling devices, which are prohibited outside of licensed casinos, and the state highway patrol considers them illegal. 

Schatz says the problem has been getting local prosecutors to take up the cases.

“Prosecutors have a lot on their plates,” he said. “But there is no longer any question that these machines are clearly illegal. There’s no reason to call them gray market anymore.”

At the county level the problem may not seem significant, Schatz said, the impact of so many unregulated machines across the state is concerning. 

“We have seen a diminished return from our lottery sales because of the revenues of being stripped off that are going into these gray-market games,” Schatz said. “This is impacting revenues that should be going to our schools.”

Schatz’s push to crack down on these machines has faced resistance from the companies profiting from them, most notably Wildwood-based Torch Electronics. 

The company, which did not respond to a request for comment, has long argued that its machines are perfectly legal and fall outside the definition of “gambling device.”

Torch was key to derailing legislation last year, Schatz said.

Others have pointed out the company’s ties to Missouri Gov. Mike Parson, who oversees the gaming commission and highway patrol. 

In addition to thousands of dollars in contributions to boost Parson’s campaign, the company also funded a political action committee supporting state House and Senate candidates.

The company’s lobbyist is Steve Tilley, a former House speaker who is a longtime friend and political adviser for Parson

Kelli Jones, spokeswoman for the governor’s office, did not respond to a request for comment on Schatz’s legislation or whether Parson has spoken with Tilley about the issue. 

Tom Robbins, Tilley’s business partner, testified to the Senate committee on Thursday that Schatz’s bill would put Torch out of business. 

He said Torch’s machines reveal the outcome of the wager before the player moves forward, and thus, are not a game of chance.

“Under Missouri law… gambling has three elements: money in, money out, and in the middle, chance, or unknown outcome,” Robbins said. “Our games are not gambling devices because they have no chance element. All outcomes follow a static script, and players can see the outcome before they play or even deposit money.”

Sen. Bill White, R-Jopin, dismissed Torch’s reasoning.

Even if Torch’s machine reveals that a player will lose money, White noted, the player must place a losing bet in order to have a chance at winning again.

“This is a sleight-of-hand argument to pretend this isn’t gambling,” he said, adding: “It’s not skill. It’s a game of chance.”

Level playing field

Jim Turntine, owner of TNT Amusements, says the proliferation of these gaming devices are hurting businesses like his who are “following the letter of the law.”

He’s filed lawsuits trying to get these slot machines removed from businesses, and he hopes lawmakers will put more teeth in the law to ensure enforcement. 

State and local authorities need to take action, Turntine said. 

“They were illegal already,” he said in an interview with The Independent. “You didn’t need the court ruling in Platte County. I’m telling you, if you read the Constitution of Missouri, it’s very clear. They didn’t need that court ruling to take action, but it was an easy cover for politicians.”

Several lawmakers on Thursday wondered why the state has struggled to get a handle on the proliferation of these machines. 

“These things aren’t hard to find,” said Sen. Mike Cierpiot, R-Lee’s Summit. “You just walk into these establishments and there they are.” 

Schatz said some lawmakers want to expand gaming to allow for these types of machines to operate legally. While he would oppose that, he isn’t willing to even entertain a debate on the issue until the state reins in illegal machines. 

“The thing that frustrates me is these companies are operating illegally, but they are betting that the legislature will eventually come in and wave a magic wand and make it legal for these games to exist in Missouri,” he said. “If we want to expand gaming, then we need to make sure there is a level playing field. We can’t allow bad actors to have an advantage because they were willing to break the law.”

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