Torch Electronics Hit With $500,000 Verdict in Missouri Gambling Case

A federal jury found that Torch Electronics, a major distributor of “gray market” gaming machines in Missouri, used unfair business practices by giving false information to retailers about whether its products were legal. 

Torch Electronics Fined $500,000 Over “No-Chance” Machines in Missouri Legal Battle

On Monday, in St. Louis, the jury ordered Torch Electronics to pay $500,000 in damages to TNT Amusements, a smaller rival located in Sullivan.

The choice comes after years of conflict between the two businesses. Their argument focuses on the many Torch Electronics machines found in gas stations and convenience stores throughout the state. TNT claimed that Torch Electronics misled people by promoting its machines as legal “no-chance” games. This led store owners to swap out TNT’s arcade-style equipment for Torch’s slot-like machines.

Senior US District Judge John Ross presided over a trial that shed light on the workings of Missouri’s unregulated gaming business, reported The Missouri Independent. Torch Electronics started growing its presence in 2017 and insists its games comply with state gambling laws. The company claims players can see the next spin’s outcome by using a tool called the “prize viewer.” Steve Miltenberger, the owner, explained that the game outcomes are predetermined and that the machines imitate slot machines as a form of fun.

TNT’s lawyers pushed back, saying the “prize viewer” is just a cover-up. They argued that the machines still depend on luck, which makes them illegal under state rules. They also said the company made misleading claims about the legality of its devices, which cost TNT 20 spots where it did business.

Torch Electronics to Appeal Verdict After $32M Gaming Operation Exposed

Court documents showed that from 2017 to 2023, people spent about $32 million playing Torch Electronics games at 20 locations. Reports indicated that retailers kept around $11 million in shared profits with the company, while close to 65% of bets returned to players as prizes. Unlike regulated casinos, Torch Electronics does not pay taxes on its earnings to support education or state programs.

The Missouri Gaming Commission believes 15,000 Torch Electronics machines operate across the state. Political donations and lobbying have helped them expand. Records reveal the company gave almost $600,000 this year to political groups connected to Steve Tilley, its lead lobbyist and a former House Speaker. They also made substantial donations to groups supporting Governor Mike Kehoe.

Torch Electronics wants to challenge the verdict. Their spokesman, Gregg Keller, stated that the company still believes its machines follow Missouri law. Meanwhile, TNT’s lawyer, Richard Finneran, praised the jury’s decision. He said it showed that Torch Electronics misled both businesses and consumers with their advertising. He also mentioned that his client plans to take more steps to recoup additional money made from the controversial machines.

This decision marks the first instance in Missouri where a jury has ruled that Torch Electronics’ machines might count as illegal gambling. This could affect thousands of gas stations and other stores that depend on these machines to earn extra money.