Sometime around 1911, George Deskin opened a lunchroom in Moberly about a block from the railroad yards that made the north Missouri community a prosperous place.
Along with meals, Deskin’s restaurant offered a game in the form of a gum dispenser. For a nickel, patrons could buy gum and potentially win 10 cents to $1 in tokens. The game alerted players whether the next nickel would only buy gum or also win two to 20 tokens worth 5 cents each.
The machine was set so that players who used a real coin received gum and any tokens indicated. Customers who played with tokens didn’t get any gum.
Instead of paying a $25 municipal fine for an illegal gambling device, Deskin took his case to the Missouri Court of Appeals. The court upheld his conviction, with Judge James Johnson writing in 1913 that the dispenser was illegal and it did not matter if a customer knew the result of the next play.
It was the lure of a payout on a future, unknown result, that kept people playing and that is what made it illegal, Johnson wrote.
In his ruling, Johnson sent a message to the future – that someone would try again to make a machine that would survive prosecution.
“In no field of reprehensible endeavor has the ingenuity of man been more exerted than in the invention of devices to comply with the letter, but to do violence to the spirit and thwart the beneficent objects and purposes, of the laws designed to suppress the vice of gambling,” Johnson wrote.
Today in Missouri, an estimated 14,000 video machines offering prizes of hundreds and sometimes thousands of dollars are drawing customers in convenience stores, laundromats and fraternal lodges. Most of the machines, like Deskin’s gum dispenser, allow a player to know the outcome of the next play and an opportunity to avoid the expense of losing.
Because these machines operate outside of the legal gaming system, there is no public accounting of the dollars spent in the machines, as there is for the Missouri lottery, gambling boats and bingo games.
The only clues indicating how much money the machines handle is contained in documents filed with criminal charges against machine owners and retailers who host them. One machine seized in September 2019 in Linn County, home to 11,920 people, had tallied $180,000 and another, seized at the same time, took in $164,741.
In Andrew County, home to 17,712 people, the Missouri State Highway Patrol and local agencies seized 11 machines in November and found they had received $538,974 and paid out $361,866.
The filings do not indicate how long it took to reach those tallies. Similar amounts spent on lottery tickets would generate about $190,000 for state education programs. The average handle, applied to the estimated number of machines, would total $950 million statewide.
The lottery, which gives the state about 22 percent of sales, sold $1.6 billion in tickets in the most recent fiscal year. Casinos, which pay a 21 percent tax on their net profits, made $926 million and paid $194.5 million in taxes, also to support education, in the first seven months of the current fiscal year.
While lawmakers debate whether to increase penalties and specifically outlaw the machines or somehow bring them into the stream of taxed, legal games, the courts are working through civil and criminal cases to determine their legitimacy.
That means Deskin’s gum dispenser is getting a lot of attention.
According to the Office of State Courts Administrator, there have been 26 criminal cases filed in 18 counties in the past two years for misdemeanors and felonies related to gambling.
A few have been dismissed, and there has been one conviction.
In Platte County, Integrity Vending, a Kansas-based company, was found guilty in September, paid a $7,500 fine and removed all its machines from the state.
Torch Electronics, owner of many of the machines, is charged with felony promotion of gambling in Linn County. And James McNutt, president of Midwest Petroleum, operator of 44 convenience stores in the state, is charged with possession of a gambling device, a misdemeanor, in Franklin County.
Torch and Warrenton Oil Company, operator of FastLane Convenience stores, are worried that prosecutions will become general and they are suing the Missouri State Highway Patrol and other state agencies, claiming to be victims of a “campaign of harassment and intimidation.”
“We would like the Cole County Circuit Court to give us a ruling against the Department of Public Safety so we can try to get some consistency statewide on trying to enforce this law,” said Chuck Hatfield, attorney for Torch.
The lawsuit singles out Franklin County for complaints about enforcement. McNutt was charged in November, and Prosecuting Attorney Matt Becker is awaiting documents to determine whether to file additional charges after a seizure from a Midwest Petroleum location in St. Clair.
When told that his county is accused of harassment and intimidation tactics, Becker laughed and said he considers it to be law enforcement.
“It is a pretty laughable claim there is an army of stormtroopers going in at 3 a.m. to seize these machines,” Becker said.
Torch is also being sued over machines placed in Crawford County, with one suit using a law written in the 19th century allowing losers to recover money lost gambling.
The next case to be heard in any court will come Thursday in Linn County. Prosecuting Attorney Shiante McMahon will present evidence at a preliminary hearing in the case of Florida-based Tritium International Consultants.
Tritium’s operation is different from cases involving Torch and other companies. Instead of retail businesses, it does business as Missouri E-Raffle and puts its devices in places like fraternal lodges and veterans halls.
“I am not the least bit concerned about this,” Tritium owner Jeremy Baxley said in an interview. “I believe this product follows the laws of the state of Missouri.”
On Sept. 12, 2019, Brookfield police Lt. Tom Bunnell visited the Eagles Lodge and seized six machines. Lodge President Jerry Stone said the machines had been there about five months and the net proceeds were split evenly with Tritium.
McMahon has also filed felony charges against Torch and a Columbia company called Capital Vending, which are set for preliminary hearings on March 9.
She charged the companies that own the machines rather than the establishments that hosted them because that is who is reaping the biggest profits, she said.
“I would prefer to prosecute the vendors because I believe that is where the actual reports the officers provided pointed,” McMahon said. “That is where the crime occurred.”
Tritium’s angle on the video gaming market is to use the not-for-profit status of its host sites and provide what Baxley calls an electronic raffle. Under the Missouri Constitution, “any organization recognized as charitable or religious pursuant to federal law” may conduct raffles and sweepstakes.
What makes Tritium’s machines different from those hosted in for-profit retailers is how they work, attorney Nelson Mitten said in an interview.
Unlike machines owned by Torch and other vendors, or Deskin’s gum dispenser, Tritium does not make “pre-reveal” machines, Mitten said.
“The constitution allows these organizations to have raffles and we are merely providing an electronic raffle as opposed to a physical raffle,” he said.
When a player starts, the machine creates a pool of tickets with pre-selected winners. The player purchases tickets and learns immediately if it won or not and the prize. If the player purchases all the tickets, the process starts over.
“All we have done is modernize a traditional fundraising raffle,” Baxley said. “The Missouri Lottery Commission and the Missouri Gaming Commission are mad at me because I created a unicorn.”
In Torch’s Cole County lawsuit, local law enforcement in Linn County, along with Crawford, Barry, Vernon, Camden, Henry and Webster counties, is accused of assisting the highway patrol as it “intimidated and harassed convenience store owners” over the gambling machines.
Bunnell, who seized the machines at the Elk’s Lodge and also those owned by Torch and Capital Vending at Prenger’s Food, said the investigation was entirely initiated by the Brookfield Police Department. The proliferation of machines concerned the department, he said.
“During the investigation we coordinated with other agencies,” he said, “but the investigation began with Brookfield.”
There is no campaign of harassment or intimidation, Bunnell said.
“I wouldn’t feel so,” he said. “The individuals violating the law may feel harassed.”
There have been seven felony cases filed over the gaming machines. Along with the Platte County conviction and the three in Linn County, the others are filed against convenience store owners.
In Henry County, Ijaz Hussain, owner of Clinton Convenience Store, was charged Dec. 29 after four Torch-owned machines were seized Nov. 2. When the machines were opened, they contained $9,476. The criminal case is in its initial stages and Prosecuting Attorney Richard Shields has also filed suit to close the business for a year as a gambling house.
In the Andrew County case, Mohammad Saqib and Azra Noreen, owners of “The Junction” in Country Club on the northern outskirts of St. Joseph, were charged Dec. 16 and the case is also in its early stages. In a civil action, Saqib and Noreen have agreed to forfeit $14,444 removed from the 11 machines seized at their store.
Like Deskin with his gum dispenser, many legal authorities were expecting Integrity Vending to appeal its Platte County conviction. In Johnson County, a misdemeanor case over the company’s machines was dismissed after the conviction when the company withdrew its machines, Prosecuting Attorney Robert Russell said.
“One of things everyone was waiting for was, if it would be appealed, the appellate court decision would declare that they are gaming machines,” Russell said. “Integrity chose to leave the state and not appeal the decision.”
Platte County Prosecuting Attorney Eric Zahnd said the case should still be a signal to prosecutors throughout the state.
“I am hopeful now that we have demonstrated that these machines are not legal in Missouri that police and prosecutors will feel free to seize the machines where necessary and file criminal charges against the distributors for convenience stores or other locations where they are being located,” Zahnd said.
Under state law, seized gambling machines with “no legitimate use shall be ordered publicly destroyed.”
The law isn’t clear about how to obtain an order authorizing the destruction, Zahnd said, so the Integrity Vending machines remain in storage until he figures it out.
The criminal case was filed against the owner of the machine and not the retailer because the company assured the host business that the game was legal, Zahnd said.
There are no more gaming machines in his county, he said.
“We have now, effectively communicated to convenience store owners that despite what these ‘no-chance’ gambling machine owners say, they are illegal and we would prosecute them,” he said.
The issue is not as clear-cut as Zahnd claims, Hatfield said. He anticipates that a case will reach one of the three state appeals courts and possibly the Missouri Supreme Court before the legal questions are decided.
The key to whether a game is gambling is the legal definition that someone “risks something of value upon the outcome of a contest of chance or a future contingent event not under his or her control or influence…”
On a Torch machine and others like it, a player must accept a loss in order to learn whether the subsequent game is a winner. Each play is a separate transaction, Hatfield said.
“The essential argument is that they are not gambling devices because the player is in control of the outcome,” Hatfield said. “You have an option to win or lose, and so the reason we are doing a lawsuit is that there is a dispute about this.”
The Deskin precedent should not apply, Hatfield said.
“The law is different and the machines are different,” he said. “I am not sure that case correctly states the law.”