Missouri Senate president accuses AG of turning ‘blind eye’ to illegal gambling

Dave Schatz had harsh words for Eric Schmitt, a rival in the GOP Senate primary

By: - May 17, 2022 9:30 am

Missouri Senate President Pro Tem Dave Schatz, R-Sullivan, at a March news conference with Majority Leader Caleb Rowden, R-Columbia. (Rudi Keller/Missouri Independent)

Missouri Senate President Pro Tem Dave Schatz used his exit from the legislature to blast Attorney General Eric Schmitt, arguing he failed to stop the proliferation of illegal gambling machines and cost public schools millions in revenue.

Schatz, who is opposing Schmitt in the Republican primary for U.S. Senate, was stymied by a filibuster in his final attempt to pass tougher regulations for machines offering cash prizes that have become common in convenience stores, bars and truck stops.

By the time his amendment was offered Wednesday night, the Senate had been in session for almost 10 hours. Another five hours would pass before the chamber recessed. So after a filibuster of about 30 minutes by Sen. Mike Moon, an Ash Grove Republican and member of the conservative caucus, Schatz set the amendment aside.

So on Thursday night, at the end of the Senate leadership press conference in the Missouri Capitol, Schatz vented frustration that he had been unable, despite four years of trying, to get a bill through heavy lobbying from Torch Electronics, suppliers of many of the machines, 

He called it his major disappointment as a lawmaker.

“To have people on the Senate floor that claim to be constitutional people that stand up and prohibit that, that conversation going on, I think it’s shameful,” Schatz said. “I think also the attorney general has turned a blind eye to this issue, and let this continue on.”

Through spokesman Chris Nuelle, Schmitt’s office declined to address Schatz’s criticism. 

As we’re currently in litigation defending the state’s interest in a related case, we’ll refrain from commenting at this time,” Nuelle wrote in an email.

Schmitt’s office represents the Department of Public Safety and the Missouri State Highway Patrol in a Cole County lawsuit filed by Torch and Warrenton Oil Company, operator of FastLane Convenience stores, claiming to be victims of a “campaign of harassment and intimidation.”

The Senate added $150,000 to Schmitt’s budget for fiscal 2021 intended to spur action on the machines. The money has remained in Schmitt’s core budget but his office is not participating in any local prosecutions and has declined to provide any guidance on the illegal gambling prosecutions.

The Attorney General’s office should develop the expertise and take the lead on gambling prosecutions, Dan Patterson, Greene County prosecuting attorney, said last year. Schmitt’s office gave the same response it gave for not commenting on Schatz’s criticism — it was involved in litigation in Cole County.

“This is one where we really have a statewide issue that would be much better dealt with in a statewide manner,” Patterson said.

Patterson’s office is in litigation with Torch over subpoenas as part of a Greene County criminal investigation.

Torch is also charged with felony promotion of gambling in Linn County.

Schmitt’s campaign did not respond to a request for comment.

The General Assembly made no progress on any gambling issue this year. A bill to legalize sports wagering was killed over casino opposition to allowing the Missouri Lottery to offer video games with cash prizes in bars and truck stops. 

Taxes on legal gambling provided about $670 million to support public schools and higher education in the most recent fiscal year, with the lottery supplying slightly more than half of that amount. 

But the biggest unknown in the Missouri gambling economy is how much is being spent on the video games that offer cash prizes. Suppliers claim they are legal because they have a “pre-reveal” function that allows a player to see the outcome of any particular game and wager amount prior to playing.

“There are probably in excess of 25,000 of these machines that have proliferated throughout our state,” Schatz, R-Sullivan, said during last week’s Senate debate. “They are unlicensed, unregulated and they are obviously not being taxed appropriately. And the revenue that is generated from them, that should be going to our public education, is not seeing that.”

Casinos pay 21% percent of their net from gamblers. The net proceeds on the lottery represent about 20% of sales. 

“There’s millions of dollars every day going through, not getting into the hands of the taxpaying base in this state that should be going to education,” Schatz said last week. “So if I’m disappointed about one thing not getting done, that’s one thing that needs to be stopped in this state.”

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Rudi Keller
Rudi Keller

Rudi Keller covers the state budget and the legislature. A graduate of the University of Missouri School of Journalism, he spent 22 of his 32 years in journalism covering Missouri government and politics for the Columbia Daily Tribune, where he won awards for spot news and investigative reporting.