Missouri Lawsuit Could Doom Video Gambling Terminals

  • There are 14,000 lottery machines in Missouri that are not regulated and on which the state gets no tax revenue
  • There are calls to regulate the sector and to start collecting taxes on
  • A lawsuit has been filed against a major video gambling company in the state
  • The plaintiff alleges that Integrity Gaming LLC is offering games of skill to the public, which is illegal
  • The defendant claims that these are not games of skill because the outcomes for each game are already determined
State flag of Missouri
A Missouri lawsuit could end video gambling terminals in the state if the plaintiff wins.

Gambling in Missouri

Charitable gambling, which has been legal in Missouri since 1980, paved the way for raffles and bingo halls. The state lottery was approved in 1986 by a public vote, in which it was supported by 70% of the voters. This led to a gradual easing of gambling laws, with riverboat casinos becoming legal in 1992.

After several hurdles, riverboat casinos began to operate in 1994. They could offer table games, slot machines, certain games of chance and poker. A 1998 amendment made it possible for casinos to be set up on artificial ponds or moats.

There are now 13 riverboat casinos operating in Missouri. The largest is owned by Pinnacle Entertainment and operated under its Ameristar brand. This casino, in Kansas City, has a 140,000-square-foot floor containing over 2,200 slot machines, a poker room, and 66 table games.

Since the end of the federal ban on sports betting, there has been talk of legalizing the activity in Missouri. Several sports betting bills have been, but without much progress yet.

Issue of video gambling terminals

Video gambling terminals are in something of a gray area in Missouri. There are 14,000 lottery machines across the state in places like grocery stores and gas stations. However, there is no taxation, regulation, or oversight of these machines.

In February, Senator Denny Hoskins introduced the Video Lottery Control Act to establish regulation of the video gambling sector. It would generate about $36m (£28.4m) in annual tax revenue for the state. A regulatory framework would be created along with a self-exclusion program for problem gamblers. While this bill drew a lot of interest, it was not passed by the legislature.

New lawsuit hits the video gambling sector

A prosecutor from western Missouri has brought a lawsuit against a major video gambling machine operator. Eric Zahnd, Platte County’s prosecuting attorney, accuses Integrity Gaming LLC, which is based in Kansas, of allegedly installing a couple of illegal gambling machines in two convenience stores in Parkville. The suit could end these video gambling terminals throughout the state.

Police seized five such machines in October 2018. The store owners claim these machines were set up by the company. The way the games work is very similar to slot machines, with the person cashing out and getting the money from the cashier at the store.

The company claims that the machines are not betting devices because the outcome of each game is pre-determined. They say that there is no element of skill. Zahnd disagrees and is willing to let the court decide this issue. The case is scheduled to be heard in December.

In the most recent legislative session, lawmakers went back and forth about whether they should legalize slot machines and/or sports betting. The lucrative tax revenues are a plus but concerns about rising levels of problem gambling is also a key consideration. Those in favor of legalization want the tax revenues to go mostly toward funding education programs.

One person who is against the spread of these gambling terminals in the state is Senate President Dave Schatz. He said: “They are starting to pop up more and more. We’re trying to figure out what’s the appropriate way to move forward.”