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Missouri governor's stance on gambling at odds with highway patrol

Missouri governor's stance on gambling at odds with highway patrol

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Digital Slot Machines

Dave McCall of St. Louis plays a digital slot machine game in South Public Market on Wednesday, Nov. 6, 2019. An estimated 52 such machines, made by Torch Electronics, are in gas stations, restaurants and small grocery stores across the city. Photo by Troy Stolt, tstolt@post-dispatch.com

JEFFERSON CITY — At the same time investigators in his administration are working to stamp out the spread of unregulated and untaxed slot machines in Missouri, Gov. Mike Parson said he’s not convinced the terminals are illegal.

Rather, the former Polk County sheriff said he is monitoring a Platte County court case that could provide legal guidance to the state’s prosecutors on what constitutes a game of chance versus a game of skill.

“We first need to clarify what machines constitute gambling and what machines are video games,” Parson told the Post-Dispatch in response to written questions.

The governor’s stance could affect this year’s legislative session, in which lawmakers are proposing to either ban slot machines or legalize them to capture tax revenue and impose regulations aimed at safeguarding players from unsavory practices.

But Parson’s position is at odds with what his administration is attempting to do about the rapid-fire appearance of the games at gas stations, bars and truck stops across the state.

In Parson’s home county, a 55-year-old insurance adjuster was charged with illegal gaming activity for operating a casino about 15 miles from Parson’s cattle farm in Bolivar.

According to a probable cause statement, a Missouri State Highway Patrol officer went to Michael Gaddis’ Vegas Lucky Play Casino in March and saw 15 slot machines, as well as a sign saying the establishment would not pay out more than $1,999.

The officer played $20 on two machines.

Three days later, police returned with a search warrant and seized 16 machines. Gaddis later told police he had purchased nine of the machines and was making about $4,000 a month. Court records did not say who owned the other seven machines.

Gaddis, whose next court appearance is this month, could face up to a year in jail.

The case is the result of a stepped-up effort by the highway patrol to address the machines, which are owned by companies like Wildwood-based Torch Electronics.

That company has said its machines are legal because players can click an icon to view the outcome of a wager before moving forward. The company argues this removes the element of “chance” — which would make the games illegal — even though players do not have to click the icon before placing a bet.

A highway patrol lieutenant told a Missouri House committee in October that machines like Torch’s are illegal, and the patrol’s investigations into unregulated slot machines resulted in dozens of criminal referrals to local prosecutors last year.

Polk County Prosecutor Ken Ashlock told the Post-Dispatch he received a call from a Torch Electronics lobbyist within the past year but couldn’t recall the lobbyist’s name. The lobbyist wanted to address concerns the prosecutor might have had about the company’s machines, Ashlock said.

“It was kind of odd that he called to do a preemptive strike kind of thing,” Ashlock said, adding he believed the intent was to “keep me from filing anything.”

Ashlock said Torch machines weren’t in Gaddis’ casino, but the Polk County prosecutor said last month he would file charges in cases involving Torch machines if he received a referral from the highway patrol.

“If they come up with the facts necessary, I will file them,” Ashlock said, questioning why anyone would feed money into the games if they weren’t gambling machines.

Torch is among the most active companies in the video gambling business in Missouri. The firm, owned by Steve Miltenberger, has contributed $20,000 to Parson’s election effort. One of the company’s lobbyists is Steve Tilley, a former speaker of the Missouri House and a friend of Parson.

The two served together in the Missouri House. When Tilley resigned as speaker in 2012 to become a political consultant, Parson was among his initial clients.

Gregg Keller, a spokesman for Torch and a Missouri GOP operative, did not respond to a request for comment.

Ashlock said the call was peculiar.

“It wasn’t improper, but it was unusual. I don’t have many lobbyists calling me,” he said.

Ashlock said he also received a call from a Torch attorney. The company, he said, argued the machines are legal because players have the option of viewing the outcome of a wager before they move forward with it.

Ashlock said there are no payout requirements for unregulated machines, meaning the operators can keep more money than they could in one of the state’s 13 regulated casinos.

“People are just getting cheated on them and they don’t know it,” he said.

St. Charles County Prosecuting Attorney Timothy Lohmar, president of the Missouri Association of Prosecuting Attorneys, said he also was contacted by a Torch attorney.

“Their attorney reached out to me and asked for a meeting,” Lohmar said. “He wanted to just have a meeting with me to explain from their perspective why they felt their systems were legal. It was an educational opportunity.”

Lohmar has told the Post-Dispatch he considered machines like the ones Torch sells legal because players can see the outcome of a wager before moving forward with a bet.

He also has said he is awaiting the outcome of the Platte County case before moving forward with any charges.

In responding to questions from the Post-Dispatch, Parson said gambling should be regulated, but he’s also waiting for clarity from the Platte County case, which could take two years to wind through the court system.

“The distinction between chance and skill determining the outcome of a game is fundamental to the legal analysis of whether operation of a machine violates state law. Games of chance are subject to gaming laws, and if the people want to change the gaming laws, they have the ability to do so using the legislative process, through a ballot initiative, or constitutional amendment,” the governor said.

In addition to the Platte County and Polk County cases, another illegal gaming case has been filed in Cass County, following an investigation by the highway patrol.

Kamran Khan of Lee’s Summit was charged with misdemeanor possession of a gambling device after a highway patrol officer spotted two slot machines in a Harrisonville gas station in August.

Police reports show the officer played $3.65 and cashed out a ticket worth $1.65.

Business records show the machines were owned by NKK2 Corp., which Khan formed in 2012.

Beth Riggert, spokeswoman for the Office of State Courts Administrator, said possession of gambling device charges were also filed by prosecutors in Andrew, Audrain, Camden, Johnson and Newton counties in 2019.

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