MO PROBES ILLEGAL GAS STATION SLOTS

JEFFERSON CITY — Missouri Attorney General Catherine Hanaway says her office is working alongside federal agencies in a broad investigation into slot machine-like gambling devices operating in convenience stores, bars, and other retail locations across the state, focusing on how what she described as “billions of dollars” flow from Missourians to the companies that own the machines. Speaking Thursday before the Missouri House Budget Committee, Hanaway said the state joined the probe at the request of federal investigators after a federal civil jury ruled that machines operated by Wildwood-based Torch Electronics are illegal gambling devices, and she made clear that enforcement action is coming under current law unless the Legislature changes it.

Hanaway told lawmakers investigators are mapping where the machines are located, how many are in operation, and how money moves through the system, calling the games illegal and unregulated as they exist today. Her comments came as the Missouri House prepares to debate legislation that would authorize the Missouri Lottery to license and tax similar machines, known as video lottery terminals, or VLTs. The proposal narrowly advanced out of committee this week and has divided lawmakers across party lines. Hanaway said she would enforce whatever law the Legislature adopts, but emphasized that under current statutes the machines are illegal and her office intends to pursue them.

Missouri’s situation stands in contrast to neighboring Illinois, where video gaming terminals are legal, regulated, and taxed under state law. Illinois authorized VLTs in 2009, placing them under the oversight of the Illinois Lottery and the Illinois Gaming Board. The machines are licensed, subject to strict reporting requirements, and limited to approved locations such as bars, restaurants, truck stops, and fraternal organizations. Revenue is tracked, payouts are regulated, and tax proceeds are split between the state and local governments, providing funding for public services and infrastructure.

By comparison, Missouri’s machines operate outside any regulatory framework. There is no official count of how many are in use statewide, no mandatory reporting of wagers or payouts, and no consistent tax structure. Missouri’s 13 casinos, which are regulated and taxed, reported roughly $17 billion in slot wagers annually in recent fiscal years, generating hundreds of millions of dollars for public schools. Similar transparency does not exist for the unregulated machines now under investigation.

The investigation is being conducted jointly with federal agencies, including those with authority over financial crimes, amid concerns about potential money laundering and banking violations. Hanaway said the state agreed to work cooperatively after federal investigators approached her office, and that the scope of the probe extends beyond individual retailers to the companies that own and operate the machines. Estimates of how many such games exist statewide range as high as 25,000, though no official count exists.

Torch Electronics said it has not been contacted by investigators and maintains it will cooperate with law enforcement and lawmakers if asked, while continuing to support legislation that would legalize and regulate video lottery machines through the Missouri Lottery. Currently, the games placed in retail locations are not regulated by the state, and there are no public reports detailing how much money consumers spend on them.

Hanaway said her concern is not moral opposition to gambling, but the risk posed by widespread, unregulated activity. She warned that allowing companies to openly ignore the law could invite organized crime into the state. Efforts to prosecute the machines over the past decade have largely stalled, often because local prosecutors declined to file charges following investigations by the Missouri State Highway Patrol. Hanaway told lawmakers that game operators have deployed extensive legal resources, overwhelming local prosecutors, and said her office’s concurrent jurisdiction allows the state to better withstand prolonged legal battles, especially with federal support.

The renewed scrutiny comes as lawmakers debate whether Missouri should follow Illinois’ regulatory model or continue attempting to dismantle the existing “gray market” through enforcement. Supporters of legalization argue regulation would bring oversight and revenue, while opponents warn about the social costs of expanded gambling and criticize proposals that would allow existing machines to remain in operation during a transition period. Even if the bill passes the House, Senate leaders have signaled skepticism, setting the stage for a contentious debate as investigations into the current machines continue.