At a recent hearing of the Missouri House Special Interim Committee on Gaming, Missouri Lottery Commission Executive Director May Scheve Reardon said non-regulated gambling machines popping up across the state are cannibalizing lottery profits. Reardon said, “I believe it has hurt the lottery’s revenue and it has the potential to do more damage to profits that fund education. I believe it’s escalating. We really have to pay attention to what this can do down the line.”
The Missouri Gaming Commission has declared the machines to be “gambling devices,” which are prohibited outside licensed casinos. Currently about 14,000 are operating in the state, and that number is increasing, Reardon said, particularly along the I-44 corridor from St. James to Lebanon. She said a lottery representative reported a decrease of $800,000 on her route in a six-month period—an average monthly lottery sale drop of $90,000 per retailer. The rep also said she saw a retailer unplug a Missouri Lottery sign to power up an unregulated gambling machine.
Committee Chairman state Rep. Dan Shaul said, “The lottery is losing revenue here because of these alleged illegal machines, so are the state’s 13 casinos, so is everybody. The state is losing money because of these.”
Shaul said he’d like officials from Torch Electronics, Pace-O-Matic and other video gambling machine distributors to explain why they believe their machines are legally operating in the state. “If people want to talk, certainly they will be heard. Let them share their experience,” he said.
Torch President Steven Miltenberger said his gaming terminals are “entirely legal.” He previously worked for video gaming companies in Illinois, where the slot-like machines have been regulated and taxed since 2012. Over the past year, Miltenberger has placed video gaming terminals in numerous Missouri establishments. In addition, he’s hired powerful lobbyists and donated thousands to Missouri politicians’ campaigns.
Torch spokesman Gregg Keller said, “If Jefferson City bureaucrats, whose departments are enjoying record revenues, want to increase government bureaucracy and regulation while instituting new costs on Missourians, we’d look forward to the opportunity to make the free-market case to the legislature. We’re confident that as we continue to discuss our no-chance game machines with policymakers, they’ll come to agree with scores of local prosecutors and law enforcement officials that our no-chance game machines do not violate Missouri law.”
Georgia-based Pace-O-Matic also has placed video gaming machines in Missouri and other states. The company has hired two Missouri-based lobbyists to represent its interests in the capitol.
Shaul said his committee is exploring a possible expansion of gaming in Missouri, including sports betting and legalizing slot machines in convenience stores and taverns. Reardon said the commission should be allowed to offer parlay wagering kiosks at retailers. She also said video slots could generate an additional $170 million annually to education after four years.
