The Missouri Senate recently defeated Senate Bill 98 which would have legalized sports betting at the state’s 13 casinos; authorized up to 10,000 video game terminals in bars, truck stops and fraternal and veterans’ organizations; and clarified the legality of so-called “gray market” unregulated slots, which observers say number up to 20,000 statewide. With the session ending May 14, observers said this may have been the last chance to expand gambling and address the proliferation of illegal gaming machines.
State Senator Denny Hoskins, who sponsored the measure, stated, “I am disappointed Senate Bill 98 reached an impasse on the Senate floor.”
He said casino companies and firms that place the unregulated machines in bars, convenience stores and other retail locations are trying to undermine his bill. “For them, it seems, the proliferation of illegal gaming in Missouri is not just an acceptable outcome, but an outcome that is preferable to regulation. I have impressed upon my colleagues that illegal gaming will continue to spread across our state until we take action to regulate it,” Hoskins said. The Senate has pushed for tighter gambling regulations but similar bills in the House have yet to receive a hearing.
Under Hoskins’ bill, taxes on the video terminals and sports wagering would have brought in an estimated $200 million annually for education.
Senate President Pro Tem Dave Schatz considers the legislation regarding gray market slots a top priority. He said the machines arrive with stickers on them declaring they do not violate state gambling laws. “I think a lot of these store owners have been sold a bill of goods,” Schatz said.
Hoskins’ measure would give retailers 10 days to remove the machines once they are notified their gambling devices are illegal. Schatz said that would persuade most retailers to remove the machines.
Passage of the bill was on track until state Senator offered an amendment to let the public vote on it. Hoskins said if voters defeated the bill, video lottery terminals and sports wagering also would be rejected. In addition, it would indicate voters considered gray market machines to be legal. Hoskins told Moon, “I know your intent was good. You have told me you are against gaming and what you have done has just expanded gaming to the state one way or another. Moon responded if voters defeated the proposal, the law would remain as is. “If something is illegal, it would still be illegal,” Moon said.
The measure is one of the session’s most heavily lobbied bills. Casinos are pushing for the extra revenue sports wagering would produce and electronic games providers are eager to place more lottery terminals.
Among the providers is Torch Electronics, which has been charged with felony promotion of gambling in Linn County and is suing the Missouri State Highway Patrol and other agencies in Cole County, seeking a ruling that its machines are legal and that law enforcement must cease prosecutions. Torch and other providers claim the machines are legal because they have a “pre-reveal” feature that allows players to know the outcome of their next bet.
The MHP sent prosecutors 190 probable cause statements in 2019 and 2020. Of those only 26 cases alleging illegal gambling, including eight felony charges, were filed. One guilty plea and one conviction have resulted in cases involving the machines.
Attorney David Steelman recently used the low number of prosecutions to argue for a judge to dismiss a case in Linn County against Florida-based Tritium International Consulting, which claims its machines are electronic raffle devices, not slot machines. The company offers the machines to nonprofit fraternal and veterans’ organizations; they are allowed to operate raffles under the state constitution. “These machines are now in 39 counties, and of 39 counties, 38 prosecutors have not prosecuted and one has,” Steelman said.
However, Prosecuting Attorney Shiante McMahon said the devices operate like slot machines and do not meet the commonly understood definition of a raffle. She said, “Our experts, and the Highway Patrol, would say that it functions as a slot machine. That meets the burden under the statute that it is an unlawful gambling machine.”
Circuit Judge Russell Steele said he would rule on the motion in the near future.
