The next chapter unfolds in the Missouri unregulated gaming machines saga.
The Missouri Gaming Association, an alliance of Missouri’s 13 riverboat casinos, filed a formal appeal of Cole County Circuit Court Judge Daniel Green’s decision to dismiss a civil lawsuit between Torch Electronics and the Missouri State Highway Patrol.
With the dismissal, Missouri’s unregulated video lottery terminals (VLTs) remain in a legal gray area.
Torch, a Wildwood-based owner of VLTs, claims these games require an element of skill, differentiating them from slot machines and thus making them legal. The Missouri Gaming Association wants a black-and-white ruling that these machines are illegal, just like Missouri sports betting and online casinos.
Civil court not the place for VLT decisions
Torch sued because law enforcement had misinterpreted state gambling laws, which led to seizures of its machines, mainly at the local convenience store chain FastLane, owned by Warrenton Oil Co. Warrenton also participated in the lawsuit.
Green dismissed the lawsuit, which had been open since 2021, on the grounds that Torch and Warrenton Oil Co. could not use the civil court process to stop the highway patrol from doing its job. The two-year lawsuit recently had its trial delayed until Oct. 3, but Green threw it out a day before it went to trial.
In the end, Green agreed with attorney Scott Pool, who represented the state and requested a case dismissal on two grounds:
- The plaintiffs face criminal charges that need to be settled first. The case would cover many of the arguments in the case it filed against law enforcement.
- By its nature, Torch’s lawsuit should be decided as a criminal case, not a civil one.
Casinos march on in battle
VLTs have played a significant role in Missouri gambling, serving as the main reason why sports betting remains illegal in The Show Me State. Sen. Denny Hoskins has used the issue as a legislative roadblock, believing the machines should be legalized and regulated alongside sports betting.
Many legislators stand with casinos, which own or have business deals with the nation’s most prominent sportsbooks and say the opposite. Unregulated VLTs directly cut into casino profits, and their operators do not pay taxes on revenue earned from the machines.
A statement from the Missouri Gaming Association read,
“Torch Electronics is an illegal competitor and its illegal gaming devices are harming our members. Torch’s illegal gaming devices take money away from veterans, local cities and education in the form of lost tax revenue and admission fees and this needs to be stopped.”
Torch is one of Missouri’s largest skills game owners, but other competitors entered the landscape during its two-year lawsuit. The casinos hope to see these machines outlawed entirely, creating black-and-white conditions in its favor once and for all.
The statement concluded, “We look forward to the decision being reversed, to trying our case and stopping Torch’s illegal competition.”
Torch also unsatisfied with result
Green’s dismissal of the case left a sour taste in Torch’s mouth, just the same as the gaming association’s. Torch’s attorney, Charles Hatfield, said the company plans to appeal the decision from its end, too.
Hatfield said his clients want an explicit ruling that its machines are legal and do not fit the legal definition of gambling.
If the court sides with Torch, regulation and taxation discussions will come next.
However, legislators have traditionally opposed or avoided the idea of legalizing and regulating VLTs. Just look at how much potential sports betting tax revenue they’ve left on the table in the last three years.
Is this the final chapter?
The Missouri Gaming Association’s appeal could bring about the final decision as to whether skill games are illegal and need to be outlawed or regulated and taxed in a manner comparable to casino gambling.
In all likelihood, the legal process will drag on into 2024 or 2025, if not later. During that time, we’ll learn more as Torch remains under federal investigation for one of the two lawsuits filed in March.
Torch faces accusations from a Sullivan-based coin-operated gaming firm that its illegal gaming machines have cut into the company’s profits. Its other lawsuit, which sought class-action status for anyone who lost money or was not paid winnings, was dismissed in August.
If Torch remains innocent, it will make a greater case for why its machines operate legally. Other states’ decisions on the matter could also play a role, such as Pennsylvania, which seems to lean toward banning skill games.
Unregulated games bring several concerns into question even beyond taxation.
- Whether or not the games are fixed or legitimate
- Responsible gambling (RG) practices, especially around problem gambling and underage gambling.
- Additional safety and security concerns
A ruling in the casino’s favor will almost certainly pave the way for legal sports betting in Missouri. Hoskins terms out in 2025, too, removing another hurdle from the path by the time a ruling is expected.