Missouri Bill to Regulate Gray-Market Slot Machines Narrowly Passes House

On Wednesday, the Missouri House narrowly passed a bill by just one vote that would establish a state-operated video lottery system and phase out unregulated “gray market” slot machines.

Missouri House Passes Bill by One Vote

Under the proposal, the Missouri Lottery would be authorized to license and oversee video lottery terminals (VLTs) placed in retail locations across the state. Approved machines would have to pay out at least 80% of wagers in prizes, with about one-third of the remaining profits earmarked for public education. The measure would also levy a 3% tax on video lottery profits to benefit local governments and increase the per-person admission fee casinos pay from $2 to $4 for each patron entering the gaming floor.

The bill moved to the House earlier this month. Aside from legalizing VLTs placed in retail stores, the bill would also put the Missouri Lottery in charge of regulating the games. Following its approval in the House, the bill now moves to the Missouri Senate for review and consideration. It is one of the final steps in years of attempts to control VLTs, which have so far operated in the state’s legal gray zone.

What Do the Supporters and the Opponents of the Bill Say?

Backers framed the measure as a compromise: stricter regulations, centralized oversight, and new tax revenue in return for gradually eliminating the unregulated machines. Rep. Bill Hardwick, a Republican from Dixon, who spearheads the bill, said its acceptance is the right thing to do for the state. The proposal would also allow local governments to prohibit the games within their jurisdictions.

Meanwhile, critics argued the bill would effectively legitimize companies that have operated in a legal gray area and broaden the reach of gambling into everyday retail settings. State Rep. Dean Van Schoiack, a Republican from Savannah, questioned why lawmakers would amend state law to benefit an industry that he said had defied the state of Missouri.

Even some lawmakers who oppose expanding gambling in the state acknowledged Wednesday that the legislation may be necessary.

State Rep. Darin Chappell, a Republican from Rogersville, said he strongly dislikes the machines and the impact he believes they have on communities. However, he argued that allowing them to continue operating in a legal gray area has left many prosecutors either unable or unwilling to take action. If the games are going to continue to exist, Chappell said, they should at least be subject to regulation and taxation.

The passing of the bill coincides with US District Judge John A. Ross ruling that similar machines are gambling, and not skill-based. This effectively means that they should be regulated by Missouri.