During their 2021 session, the Missouri Legislature failed to agree on how, or whether, to change gaming laws so the courts may end up deciding on the legality of the
unregulated devices that offer cash prizes to players. You can’t call them gambling machines, because that’s what’s at the heart of the issue – are, or these
machines not – gambling under Missouri state laws. However, with about a dozen criminal cases to prosecute the owners and operators of these machines, and civil cases pending to block their prosecution, this issue may end up being decided in Missouri courts.
Untaxed ‘gray machines’
Missouri has legal, regulated gambling in the form of a state lottery, 13 casinos, charity bingo and raffles. The unregulated, or “gray market,” machines, claiming to be legal because they reveal the outcome of the next wager on request or mimic a raffle, have proliferated since 2019 in convenience stores. State Sen. Denny Hoskins (RWarrensburg) sponsored a bill that would have legalized sports wagering at casinos, allowed video lottery terminals subject to a 21% tax and clarified that most of the machines currently in place are illegal. “My biggest fear is we have a lot of unregulated and untaxed gray machines,” Hoskins said, adding that the estimates he believes put the number at 15,000 to 20,000. Legislation is needed, he said, so players know the machines are honest and the education programs that benefit
from gambling are supported. “I would put everybody on the same playing field,” Hoskins said. Without regulation, he said, there is no protection for players that 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. In contrast, players are guaranteed that slot machines and the lottery will return set amounts. For gambling machines in casinos – slot machines and those that mimic table games like video poker – the minimum return is 80%. According to Missouri Gaming Commission data, in March the 13 casinos paid out an average of 90% of the money deposited in the machines. A minimum 45% of lottery revenue is dedicated to prizes.
Legal and Civil Lawsuits
Tritium International Consulting ,a Florida-based company that says its machines are legal electronic raffle devices, not illegal slot machines. The company offers the machines to not for profit fraternal and veteran’s organizations, which are allowed to operate raffles under the state constitution. Tritium is charged with felony promotion of gambling. On Thursday, Circuit Judge Russell Steele ruled against Attorney David Steelman’s motion to dismiss the criminal case.
No date has been set for the criminal trial. The civil case, seeking to block prosecution through a court order, is set for trial in September.
The other significant civil case is pending in Cole County. Torch Electronics, which owns numerous machines in retail locations, and Warrenton Oil Company, which hosts the devices in its Fast Lane convenience oder blocking enforcement in any county.
Torch is also charged in a felony case pending in Linn County. In both the Linn County criminal and civil cases, Tritium International is trying to prove that its games are legal raffles, authorized by the constitution. Hoskins said he thinks the company may prove its case because current law doesn’t define the elements of a raffle.
The Cole County case is designed to do what legislators have been unable to do — provide a definitive answer to whether the gray-market machines are legal.
Whether the legislature’s inaction will mean anything to the courts is uncertain, attorney Chuck Hatfield, who represents Torch and the other plaintiffs, said in a recent interview.
“I have been thinking about that,” he said. “I think it may be important that the legislature did not clarify the law.”
Linn County Prosecuting Attorney Shiante McMahon, who is being sued in civil court by the same company Steelman is defending in the criminal case, said she hadn’t paid enough attention to know the legislative outcome. “The law stands as the law stands,” she said, “and it has got to find its way through the courts at this point