Category Archives: Slot Machines

Missouri Gov. Opposes Gaming Commission and Missouri Highway Patrol on Illegal Slot Machines Highlighting the need for Legislation

Casino Watch Focus has reported on the illegal gambling machines that have been popping up outside of casinos and all over Missouri.  Slot machines are only allowed in licensed Missouri casinos, yet the manufacture of the machines claim they aren’t games of chance, so they aren’t slot machines.  Many jurisdictions have dealt with pre reveal machines and they have all concluded they are slot machines. The Missouri Gaming Commission has defined them as illegal machines, but they can only enforce gambling regulations at the casinos.  The Missouri Highway Patrol has been clear they view them as gambling and they have been working with local prosecutors to try to crack down on the machines. Most recently, authorized slot machine manufacturers have taken to the courts to sue those that manufacture the illegal machines.  Various editorial boards are also standing up against this illegal expansion of gambling. The St Louis Post Dispatch had the following to say:

Reasons abound why the spread of unlicensed payout video-gaming machines in Missouri’s bars, restaurants and gas stations constitutes an intolerable situation. Legalized gambling was approved here as a tradeoff for state tax revenue, but the unlicensed machines don’t bring in any. The state regulates legal gambling operations to ensure they aren’t cheating their patrons, but there is no such protection for those who play these machines.

Another important reason regulation is necessary is that gambling is an addictive activity for some people, which is why the state requires that access to addiction services and a voluntary self-exclusion program be offered at regulated gambling sites. These unregulated sites have no such resources.

The editorial continues and its sentiment is joined by other editorial boards as well, so its odd that Missouri Gov. Mike Parsons isn’t convinced the machines are clearly illegal slot machines.  US News and World Report explains:

Gov. Mike Parson says he’s not convinced that unregulated and untaxed video gambling terminals in the state are illegal, even as investigators in his administration work to halt their spread. The governor’s stance is in contrast to the Missouri State Highway Patrol, whose leaders have made a decision. A patrol lieutenant told a state House committee in October that the machines are illegal and that its investigations resulted in dozens of criminal referrals to prosecutors.

Besides the Platte County case, several others have been filed, including one in Parson’s home county. Polk County Prosecutor Ken Ashlock said there are no payout requirements for unregulated machines, meaning the operators can keep more money than they could in one of the state’s 13 regulated casinos. “People are just getting cheated on them and they don’t know it,” he said.

The Governor’s position doesn’t instill confidence and some have argued its a symptom of a larger problem and is the real reason the Missouri legislator must address the issue this legislative session.  The Joplin Globe argues:

The biggest distributor of the machines, Torch Electronics, has aggressively marketed the games. It says the terminals are not gambling devices because a player has the option of checking the outcome of a wager by clicking an icon before continuing play, thereby removing the element of chance, though players are not required to click the icon before completing the play.

Torch employs politically connected lobbyists and high-powered consultants. The company has made campaign donations to key political players, including at least $20,000 to Gov. Mike Parson, according to a July report in the St. Louis Post-Dispatch.

The fact that criminal cases are going forward while the governor questions whether the devices are in fact illegal highlights the problem. Torch and similar companies distributing the devices are skirting the edges of the gambling laws in Missouri and appear to be trying to game the system through political influence.

The Missouri House held special hearings into the machines and unregulated gambling this past summer, and the Senate is looking at a plan to ban the terminals outright.

This is an issue of the letter of the law versus the intent of the law. The Missouri General Assembly must resolve the matter, to permit these games or to clearly ban them.

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Missouri Legislators to introduce Sports Betting Bills, this time with a cut for Professional Leagues

Casino Watch Focus has reported on the ongoing growth of sports betting after the Supreme Court’s ruling to allow states to legalize sports gambling.  Many states have done just that, with Florida being the most recently reported state to consider its legalization. Nothing has passed in Florida and Missouri attempted last year to introduce legislation, but it lacked any fees to pro sports organizations.  Now it would appear that with the pre filing of two new sports legalization bills, Missouri is going to reattempt legalization, but this time with the addition of integrity fees.  An online source reports:

Lawmakers in Missouri have pre-filed legislation to legalize and regulate sports betting, following the issue of a favorable special committee report. The new proposals are similar to bills introduced earlier this year, which failed to pass before the end of the 2019 legislative session.

However, sponsors of new bills have called for the inclusion of integrity fees to be paid to professional sports leagues, and as much as 0.75% of handle.

Here’s what’s included in the bills: SB 567 from Sen. Denny Hoskins calls for the Missouri Lottery Commission to oversee sports betting with 0.25% of handle paid to the leagues. SB 754 from Sen. Tony Luetkemeyer seeks 0.75% of handle to be paid to the leagues. The bill would put the Missouri Gaming Commission in charge of regulation.

The decision to include an integrity fee might not actually help the legislation get passed this year considering the issue has been vehemently opposed in other states.  The online source continues:

The issue of integrity fees is a thorny one and is bitterly opposed by operators, who argue that they would eat into their slim profits from sports wagering. Operators usually only keep around 5% of the total handle and, should this be compromised, the additional costs would then have to be passed onto players in the form of un-competitive lines and less enticing promotions.

Integrity fees have been advocated most notably by the National Basketball Association (NBA) and Major League Baseball (MLB), as a way of profiting from the proliferation of sports betting in the U.S. However, none of the states to launch legal sports betting so far have approved such a fee, with New Jersey  going so far as calling the idea “insulting”.

Whether or not such gambling efforts violate the Missouri constitution that limits gambling to the Missouri and Mississippi rivers remains to be seen.  However, the possible inclusion of mobile operators would sure seem to make that question more discernible, which could make the passage harder than typical legislation.  The new legislation is vague, but does seem to want to set up such a system. The source concludes: 

The committee report, which was presented to the state House on Dec. 5, does at least include a potential sweetener for the operators:statewide online/mobile wagering. While vague on the subject, the report stated it is interested in mobile wagering and “creating a level playing field insofar as that is possible”“.Whether that means the market will be opened up to several mobile operators or ensuring retail sportsbooks aren’t dominated by single operators is unclear.”

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Illegal Missouri Gambling Machine Manufacturer sued by Authorized Provider

Casino Watch Focus has reported on the ongoing impact of the illegal slot machines that have emerged all over the state.  Missouri limits gambling and slot machines to the 13 licensed casinos that are only authorized to operate on the Missouri and Mississippi rivers.  These illegal gambling machines have finally reached the forefront of regulators as both prosecutors and legislators have been working to find ways of cleaning up the problem.  Now, a new approach has emerged in the form of a civil lawsuit. US News and World Report explains: 

The owner of a Missouri coin-operated game company wants a judge to shut down another company’s video gambling terminals, alleging they are illegal and hurting profits.

TNT Amusements filed the civil lawsuit last week in Crawford County against Torch Electronics, the St. Louis Post-Dispatch reported. The suit also names Midwest Petroleum Company, which replaced TNT machines with Torch machines at its Midwest Travel Plaza truck stop along Interstate 44 in the Missouri town of Cuba.

The devices, which work in a similar fashion to slot machines, have been rolled out across the state by Torch and other companies. The TNT lawsuit argues that slot machines are only allowed in casinos.  By placing them in truck stops, gas stations and convenience stores, it is breaking state law. Turntine’s attorney, Elkin Kistner of Clayton, called Torch a “rogue operator.”

At least two pieces of legislation have been filed in recent days aimed at stopping Torch and other companies. Both could be debated when the Legislature convenes in January.

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Florida’s Legislative attempt at Legalized Sports Betting Violates State Constitution

Casino Watch Focus has reported on the ongoing issue of sports betting in Florida. There have been many looks at sports betting in Florida now that the Supreme Court has allowed it to be legal. Of course, each state would still need to enact legislation to allow for any sports betting in their jurisdiction. Florida never passed any sports betting legislation, and it would appear that unless the government ties something fairly underhanded, Amendment 3 to the Florida constitution would make it illegal to pass without the consent of the Florida Voters. Florida Politics online explains:

At issue is a bill Sen. Jeff Brandes filed Monday that would legalize sports betting in Florida and place regulatory and oversight authority within the Department of Lottery.

John Sowinski chaired Voters in Charge, the committee *behind the $45 million campaign to approve Amendment 3 last year that requires voter approval for casino gambling expansion in Florida. Voters overwhelmingly approved the Amendment with 71 percent voting in favor.

“Amendment three has one main thing. It says that if it’s casino gambling, it requires approval by citizen constitutional amendment,” Sowinski said. “The Legislature is not even allowed to propose it or put it on the ballot.” “It really could not be more crystal clear,” he added.

The issue at hand then, is the whether or not sports betting is part of the definition of casino gambling. John Sowinski says that answer is very easy to determine and one the courts have easy access to when looking to the question. Florida Politics continues:  

“Sorry — the bill is unconstitutional.When it comes to casino gambling — and yes, sports betting falls under that definition— the voters are in charge,” Sowinski wrote, referencing his committee’s name.

The opinion, released this April by *Paul* *Hawkes*, a former member of the First District Court of Appeals, makes an interesting point on voter intent.

“In 2018, a multi-million dollar campaign effort by sports gambling and pari-mutuel interests opposing Amendment 3 provided considerable accurate context about how Amendment 3 would effect sports gambling and player-designated games,” Hawkes wrote. “The intent of the voters was informed by numerous statements that create a record to which courts can turn to for an understanding of what voters understood the amendment to do.”

Simply put, voters understood a “yes” vote for Amendment 3 would affect sports betting, meaning their intent was for sports betting to be included in mandatory voter approval for gambling expansion. 

John Sowinski further argues, that if those like Brandes take the position that sports gambling can happen outside of a casino and thus its not explicitly a casino gambling issue, then the same can be said of slot machines, black jack and other table games that are offered outside of casinos as well. Even Brandes thinks those games would be considered casino gambling, so its hard to find room to say sports gambling should get a pass and somehow be seen as something other than casino gambling as well.

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Slot Machine Expansion Halted by Florida Supreme Court

Casino Watch Focus has reported on the ongoing efforts to expand gambling in Florida by expanding slot machines in various jurisdictions. Many areas around Florida have looked to pass voter referendums to allow slot machines, and in several places, they passed. The problem? There was no explicit allowance by the government to allow gambling in those jurisdictions. Those communities argued the referendum was enough, but now the Florida Supreme Court has weighted in on the matter. An online source explains:

A Florida Supreme Court decision that could have resulted in a sweeping expansion of slot machines across the state, including in Palm Beach County, has instead restricted them to Broward and Miami-Dade counties, where they are already in place.

The decision means that pari-mutuels in Broward and Miami-Dade counties that already have slots, such as Mardi Gras and Gulfstream in Hallandale Beach and Isle Casino in Pompano Beach, will continue to have them. But at the Palm Beach Kennel Club, which has long sought to get in on the casino action, the blinking lights and whirling sounds of the one-armed bandits will remain out of reach.

The Supreme Court case stemmed from an attempt to open slot machines at a racetrack in Gretna, a small town in Gadsden County, along the border with Georgia at the start of the Panhandle. Like Palm Beach and six other counties, citizens of Gadsden had voted to approve slot machines

The Gretna racetrack owners argued that such a county referendum allowed slots without the approval of state law. But in a 6-0 decision, the Florida Supreme Court ruled otherwise. “There must be ‘statutory or constitutional authorization’ for any countywide referendum approving slot machines at qualifying pari-mutuel facilities,” wrote Justice Charles Canady in his 16-page opinion. “The authorization must be found elsewhere in the law. And it is nowhere to be found.”

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Missouri to Propose Illegal Slot Machine Legislation

Casino Watch Focus has reported on the ongoing evolution of the illegal slot machine dilemma Missouri has been facing. For years, illegal slot machines have been popping up all over the state, but little has been done to properly regulate them. The issue stems from the gaming commissions ability to only enforce legal gambling, leaving illegal gambling devices to be enforced by each locality. Only recently have area public prosecutors been attempting to shut down these sights, and many have entered the discussion this year. Now, after months of discussions, its being reported that Missouri Pro Tem David Schatz will be filing much needed legislation in hopes of finally providing a solution to an issue that has been plaguing the state for years now. An online source reports:

The Missouri Senate leader will file legislation in December in Jefferson City to increase penalties for alleged illegal slot machines, setting the slot machine issue up as a major one for the 2020 legislative session.

Senate President Pro Tem Dave Schatz, R-Sullivan, told Missourinet on Wednesday that his legislation will enhance the penalties for the alleged illegal slot machines, which are also known as video lottery terminals (VLTs). They can be found in bars, restaurants, gas stations and convenience stores.

Missouri’s first criminal case involving the alleged illegal slots will go to trial in December in western Missouri’s Platte County.

Pro Tem Schatz says the Missouri Gaming Commission has received multiple reports of sites that have these machines. The Missouri State Highway Patrol testified in October that the number of complaints it’s received about illegal gambling has increased from 39 in 2018 to at least 145 this year. Most of those complaints are about alleged illegal slots.

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Missouri’s Illegal Slot Machine Problem gets Another Round of Missouri Legislator’s Attention Amid Record Complaints as some Fear it will become a Supreme Court Issue

Casino Watch Focus has reported on the ongoing issue plaguing Missouri residents, illegal gambling machines. These slot machines have been popping up all over Missouri and they are illegal. Enforcement has been an issue as the Missouri Gaming Commission can only regulate and enforce legal gambling. Local prosecutors have been responsible for enforcement and the issue has quickly gotten out of control.   Complaints for these machines have more than quadrupled in just the last year and its causing a strain to law enforcement. Missourinet explains:

The Missouri State Highway Patrol testified Thursday in Jefferson City that the number of complaints it’s received about illegal gambling has increased from 39 in 2018 to 145 so far this year. Most of those complaints are about alleged illegal slot machines. Highway Patrol Lieutenant Roger Phillips tells state lawmakers the Patrol’s Division of Drug and Crime Control (DDCC) only has two full-time investigators to handle these complaints. “In recent months, we’ve had such a volume of complaints that we’ve had to pull investigators from other assigned duties to come and help investigate these complaints,” Phillips testifies.

The Missouri House Committee has taken to a more formal round of discussion at the State’s Capitol, inviting testimony from the community, law enforcement and the manufactures of the machines. Interestingly enough, none of the machines manufactures actually showed up as they initially indicated. The St Louis Post Dispatch reports: 

After saying he would welcome the chance to talk to lawmakers, one of the men responsible for the spread of illegal gambling machines across Missouri was a no-show Thursday at a special House committee hearing. In September, a spokesman for Steven Miltenberger, owner of Wildwood-based Torch Electronics, said “we’d look forward to the opportunity” to make the case to lawmakers that

“I have not seen, nor am I aware, of any machines that would be legal,” said Steve Sokoloff, general counsel for the Missouri Association of Prosecuting Attorneys, which represents county-level prosecutors.

He said the distributors and manufacturers of the machines find loopholes in state anti-gambling laws to help them avoid prosecution. But, no matter which feature is added by the companies, the general sense is that if people put money in a terminal with the belief that they might win money, that is gambling, which is illegal if it is not regulated by the state, Sokoloff said.

Given the shear volume of these machines and the massive amount of money that will be lost should they be properly regulated and formally declared illegal through legislation, some believe the issue will find itself in the Supreme Court. Missourinet explains:

House Special Interim Committee on Gaming Chairman Dan Shaul, R-Imperial, tells Missourinet he believes this issue will end up at the Missouri Supreme Court, because of powerful interests on both sides. “There’s going to be people that make a lot of money one way or the other, and it’s a lot of protection and the cost of going to the (Missouri) Supreme Court would be certainly less than what they would perceive would be won or lost through this process,” Shaul says. He also believes the issue will be litigated in court for three or four years.

Chairman Shaul compares the growing problem of alleged illegal slots to a different issue the Missouri Department of Conservation has dealt with. “Feral hogs weren’t a problem (in Missouri) ten years ago, we just had a little problem. Well, is this going to become the next feral hog issue in the state,” says Shaul.

The Missouri Gaming Commission has testified that any illegal gaming machines used in Missouri negatively impact casinos and the state Lottery, reducing taxes and funding for education and veterans.

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