Missouri Slot Machine Laws

Missouri Slot Machine Laws – Lawmakers renew illicit gaming debate, sports betting on Missouri Bills will ban “pre-announce” machines, expand casino offerings, and allow video lottery games

A backhoe smashed the second of five illegal slot machines destroyed on the Platte County Public Works estate in Platte City in October 2021. (Rudi Keller/Missouri Independent)

Missouri Slot Machine Laws

The annual battle over what is and isn’t an illegal slot machine began Thursday when a Senate committee heard a bill outlawing “pre-emergent” games that proliferated across the state.

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While several prosecutions are ongoing and at least two have been settled with a guilty verdict, many prosecutors are reluctant to charge — and some don’t consider the games illegal at all.

State Senator Dan Hegeman, who is spearheading efforts in the Senate for the second year, told the Government Accountability and Financial Oversight Committee on Thursday morning that he is convinced that legislation is not needed for prosecutors to act.

He pointed out that last year a gambling company in Platte County was convicted, fined and destroyed their machines.

“The conviction, lack of appeal, and destruction of the games in Platte County removed the impression that these games were legal,” Hegeman said.

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But lobbyist Tom Robbins said Hegeman’s bill was intended to put one of the state’s main game vendors, Wildwood-based Torch Electronics, out of business. Robbins argued that torch games are legal because a player can find out if they can win the next game before putting any money into the machine.

Games that have been found to be illegal in Platte County, Robbins said, require a player to deposit money before they can find out if they’ve won.

“To say that this is not a game of chance is a rather loose and fanciful argument,” said White. “People selling pottery can be considered a small business and are illegal under our statute.”

Torch faces prosecution in Linn County for felony incitement to gambling and is suing the state in Cole County Circuit Court to obtain a judgment statement that they operate legally.

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The company is also a major political contributor, and in June donated $350,000 to six political action committees affiliated with lobbyist Steve Tilley, a former House spokesperson close to Governor Mike Parson.

To say that this is not a game of chance is a rather loose and fanciful argument. People selling pots can be considered a small business and is illegal under our statute.

Robbins, who works with Tilley at Strategic Capitol Consulting, told the committee that the bill unfairly targets Torch and that other provisions in Hegeman’s law that would remove liquor licenses from retailers that house the machines would mandate layoffs at those businesses.

Hegeman’s bill is just one of several laws that will change the state’s gambling landscape. Bills have also been opened to allow sports betting through the state’s 13 licensed casinos and to allow the Missouri Lottery to place “video lottery terminals” at truck stops and on the premises of nonprofit groups such as veterans and fraternal organizations.

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There is illegal pressure to expand gambling from the Osage Nation, which wants to set up a casino on the Lake of the Ozarks in central Missouri. Tilley and his firm are also lobbying for Osage Nation.

The NCG on the screen of this machine means that it is an “unlucky gaming” machine that the owners claim does not violate Missouri laws against gambling (Rudi Keller/Missouri Independent).

Described by Torch Electronics and other vendors as “lucky play” or preview machines, the games resemble electronic slot machines that take up most of the space in traditional casinos.

Each machine typically offers a variety of games and bets can be placed at 50 cents or more.

Missouri Slot Machine Casino Gambling

It is illegal to operate a slot machine outside of a legitimate casino, where state taxes take 21 percent of the network and pay a $2 fee for every two hours a gambler is on the casino floor. There is no reliable information on how many of the machines offered by Torch and others are operating in the state, but estimates put the number at as many as 20,000.

When a player puts money into a slot machine in the casino, they have no way of knowing the outcome of the next spin. The only assurance they can win is state law that requires machines to pay at least 80 percent of the deposited money.

In the fiscal year ending June 30, gamblers have deposited $15.3 billion in slot machines at Missouri casinos, and they’ve gotten nearly 90 percent back, bringing about $1.5 billion to the casinos.

Without any government regulation, there is no accounting of money invested in pre-show games and no minimum returns to players.

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Pre-show game vendors believe they’ve found a loophole because a player can know the outcome of each spin before their money is spent. If they don’t win, they can either get the money back from the machine or switch games by calling someone ready to pay.

With only a handful of prosecutions and appeals court precedents since 1913 on whether game design is legal, games have proliferated.

Lobbyist Mike Winter said the Missouri Gaming Association, which represents legal casinos, supports Hegeman’s bill and opposes any attempts to replace pre-disclosure games with video lottery devices.

“We’ve been consistent in our opposition to any statewide expansion of video lottery terminals over the past few years,” Winter said, “and we don’t believe it’s a good idea to legalize illegal machines.”

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“This is an attempt to change the law to remove an otherwise legitimate competitor from the market,” he said.

More than 30 states have legalized some form of gambling since the U.S. Supreme Court overturned the federal law against betting on sporting events in 2018. These include all but Kentucky and Kansas among the eight states that border Missouri.

Senator Denny Hoskins makes his fourth attempt to add R-Warrensburg, Missouri to the list. Its bill would allow both in-person betting on casino sites and online betting through those casinos.

The casino’s nets in betting will be taxed at 21 percent, as will the money the casinos make from other games, but online sports betting will not pay the $2 fee charged for physically present players.

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When casinos are allowed along the Missouri and Mississippi rivers, this fee is split between the Missouri Gaming Commission and the communities where the casinos are located. Any surplus in government share that exceeds the commission’s operating cost is allocated to veterans and other programs.

The question for Hoskins is whether Missouri will grab a share of the market or whether gamblers who want to bet on sporting events will spend their money in other states.

“Hopefully we can get through something,” Hoskins said. “There are 30 states that have sportsbooks. All stakeholders are on the same page.”

A prominent Missouri voice is objecting to allowing casinos to offer sports betting without a $2 fee, increasing it for the first time since casinos opened in the 1990s.

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Bob Priddy, formerly Missourinet’s news director, wants the fee to be adjusted for inflation and for casinos to pay for any bets they handle, whether the bookie visits the casino or uses an online platform.

Priddy estimates that an inflation-adjusted fee would be $3.67, and the $55.2 million entry fee paid by casinos would be $100 million in the most recent fiscal year. The net benefit of not indexing the fee, he said, has been a benefit to casinos of $978.3 million over the years.

Priddy, “20. “We need to bring our 21st century gambling laws into the 21st century,” he said. “The industry is changing and our laws are not.”

Priddy, a trustee of the Missouri State Historical Society, said the ads used romantic myths about riverboat gambling to sell his plan to build a casino. Under current law, casinos must be physically surrounded by water and be 1,000 feet from two major rivers.

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He said that if the boarding fee is not adjusted for inflation, he will force lawmakers to add 50 cents to promote a museum displaying artifacts from the steamship era. The Arabian steamer, which sank in the Missouri River in 1856, was salvaged in 1988 and the artifacts are on display at the Kansas City museum.

The property owners want to increase the rent substantially and the museum wants to move. Priddy and the others want him to move to Jefferson City.

“The casino industry should be financial partners,” said Priddy. “They capitalized on that legacy in 1992, when voters approved riverboat gambling.”

Winter said casinos are against any increase in fees or the imposition of fees on sports betting online. “They also want a tax of less than 21 percent on net income,” he said.

State Law On Slot Machines

“The thing you have to keep in mind is that sports betting is a small margin business,” Winter said. “If tax and

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