In Missouri, unregulated or “gray market” gambling machines have proliferated since 2019 in convenience stores, truck stops and fraternal and veterans venues.
State Senator Denny Hoskins, who estimates about 15,000 to 20,000 of the machines currently are in operation, has sponsored a bill that would legalize video lottery terminals and tax them at 21 percent.
“My biggest fear is we have a lot of unregulated and untaxed gray machines.” His legislation would have assured players the machines are honest and benefiting public education programs. “I would put everybody on the same playing field,” Hoskins said.
However, Hoskins didn’t push the measure after state Senator Mike Moon added a provision requiring a statewide vote, like all previous expanded gambling issues. The ballot would have included three issues in one vote: to legalize sports betting, allow state-approved video lottery games and make illegal any machine that has not been authorized by state regulators.
Hoskins said if voters were to reject the issue, that could be interpreted that the public does not consider gray-market machines to be illegal. Without regulation players could not be certain they have a reasonable chance of breaking even or winning money. “If it says you win 1 out of 100 times, no one is checking that you are winning that often,” he said.
Meanwhile, Circuit Judge Russell Steele in Linn County recently ruled against a motion by Florida-based Tritium International Consulting to dismiss the criminal charge against it, felony promotion of gambling. No date has been set for the criminal trial. Tritium also sued Linn County Prosecuting Attorney Shiante McMahon in civil court in an attempt to block prosecution through a court order. That trial is set for September.
In both the Linn County criminal and civil cases, Attorney David Steelman, who represents Tritium, hopes to prove the machines are legal electronic raffle devices, not illegal slot machines. The company offers the machines to not-for-profit fraternal and veterans organizations, which are allowed to operate raffles under the state constitution. Hoskins said he thinks the company may prove its case because current law does not specifically define a raffle.
Another felony case is pending in Linn County and a civil case is pending in Cole County against Torch Electronics, owner of numerous gambling machines in retail locations. Observers said the Cole County case is designed to answer, at last, whether the gray-market machines are legal.
Currently in the courts, in addition to about a dozen criminal cases, civil cases are pending to block prosecution of machine owners and retailers that allow them. Attorney Chuck Hatfield, representing Torch, was asked if the legislature’s lack of action on the issue will affect the outcome of the lawsuits. “I have been thinking about that. I think it may be important that the legislature did not clarify the law,” he said.
