Two states in the Midwest moved in different directions when it comes to illegal slot-like games.
The North Dakota Gaming Commission recently voted 3-2 to change the definition of a bar in order to halt electronic pull-tab machines at gas
stations and liquor, grocery and convenience stores. Legislators will address the rule change during the 2023 session. The change will clarify where the Las Vegas-style, slot-like machines will be allowed.
North Dakotans spent more than $1.3 billion on electronic pull-tab machines in fiscal 2021−nearly twice as much as they spent in the previous fiscal year, according to state data. Gaming Commission Chairman Deb McDaniel said gamblers are on track to wager $1.8 billion on the games in the current fiscal year, ending June 30.
McDaniel and Attorney General Drew Wrigley said the rule change will make clear the intent of the legislature in 1994, when a bar was defined as a “retail alcoholic beverage establishment where alcoholic beverages are dispensed and consumed.” The amended language specifies a bar does not include gas stations and liquor, grocery and convenience stores, however a bar in a hotel, bowling alley or restaurant still could offer the machines.
Wrigley said, “I’ve never thought of a gas station or convenience store as a bar. That’s not what anybody envisioned.” McDaniel noted four gas stations that offered the games have begun selling alcoholic beverages. They can keep the machines until the legislature decides if that will be allowed.
Currently more than 4,100 electronic pull-tab machines are located in 770 sites around the state. Wrigley warned unless the definition of a bar changes, the machines will continue to proliferate.
Lawmakers approved the games in 2017 but they didn’t debut until August 2018. The machines generated more than $25.5 million in gambling taxes in the 2022 fiscal year, nearly double the amount collected in fiscal 2020 and three times the total in fiscal 2019. About $130 million went to charities, up from $95 million in 2020.
In Missouri, at a press conference signaling the end of the legislative session, Senate President Pro Tem Dave Schatz expressed frustration that after trying for four years, he was not able to get a bill passed creating stricter regulations on video gambling machines. An estimated 25,000 of the games are in operation in convenience stores, bars and truck stops throughout the state.
Schatz said the machines “are unlicensed, unregulated and they are obviously not being taxed appropriately. 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. So, if I’m disappointed about one thing not getting done, that’s one thing that needs to be stopped in this state.”
Criticizing Attorney General Eric Schmitt, Schatz said, “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. I also think the attorney general has turned a blind eye to this issue, and let this continue on.”
Schatz is opposing Schmitt in the Republican primary for U.S. Senate.
Schmitt’s spokesman Chris Nuelle said, “As we’re currently in litigation defending the state’s interest in a related case, we’ll refrain from commenting at this time.” Schmitt’s office represents the Department of Public Safety and the Missouri State Highway Patrol in a Cole County lawsuit filed by Torch Electronics, distributor of the games, and Warrenton Oil Company, operator of FastLane Convenience stores, which offers the machines. They claim they are victims of a “campaign of harassment and intimidation.” Torch also has been charged with felony promotion of gambling in Linn County.
Schmitt’s office has declined to provide any guidance on the illegal gambling prosecutions. Greene County Prosecuting Attorney Dan Patterson said the Attorney General’s office should take the lead on gambling prosecutions. “This is one where we really have a statewide issue that would be much better dealt with in a statewide manner,” Patterson said. His office is in litigation with Torch over subpoenas as part of a Greene County criminal investigation.
Torch and other video gambling machine suppliers claim the games are legal because the “pre-reveal” function allows a player to see the outcome of any particular game before wagering.
The company recently made six $40,000 donations to political action committees managed by its lobbyist and former House Speaker Steve Tilley. Last year, Torch contributed $230,000 to Tilley’s PACs. Observers said Tilley is exploiting a loophole that lets his clients to bypass donation caps, by allowing companies to donate any amount to the PACs, which then can give maximum amount to a candidate.
