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Slot machines

Slot machines at a St. Louis-area casino are shown in this file photo.

JEFFERSON CITY — Thousands of retailers who sell Missouri Lottery tickets received a warning this week: If they have potentially illegal gambling machines in their stores, they could face prosecution.

Although it’s unknown whether local prosecutors would follow through on the warning, the letters sent by lottery chief May Scheve could make gas station owners and others think twice about being involved in the spread of gaming terminals across the state.

“Sales of games through illegal gambling devices hurts legal lottery sales and profits for public education,” Scheve wrote in the Oct. 3 letter obtained by the Post-Dispatch.

The action marks the third time in recent months that a state agency has attempted to address the devices, which are like casino slot machines, but are not regulated or taxed by the state.

Thousands of the machines began popping up in truck stops, gas stations and clubs at the same time Missouri lawmakers began discussing whether to allow Illinois-style video gambling outside of casinos.

The distributors, who have been contributing money to lawmakers and hiring lobbyists, claim their terminals are legal.

Missouri Attorney General Eric Schmitt has not issued an opinion on the question. The Republican is awaiting the outcome of a Platte County case over machines that were confiscated by police from two gas stations.

In July, however, the Missouri Gaming Commission deemed devices they had tested to be illegal. And, last week, the Missouri Highway Patrol confirmed it had begun investigating at least 73 retailers and fraternal organizations alleged to have the machines.

On Wednesday, top staffers in those agencies met for the first time to discuss how to combat the flood of machines.

“I think it was a great first step,” Scheve said. “I think we’re going to start communicating more regularly.”

Gaming Commission director David Grothaus said the meeting was aimed at improving coordination among the agencies that oversee and regulate legalized wagering in the state.

“Most of the machines we see are illegal,” Grothaus said.

On Thursday, a legislative panel will meet in the Capitol to hear from companies involved in placing the machines in establishments.

The committee was originally formed to hear testimony on legalizing video gambling and sports betting at casinos, but has focused primarily on the illegal machines and their effect on state coffers.

Scheve has said the terminals have already diverted an estimated $50 million from lottery profits. They also could be siphoning money from the state’s licensed casinos if people are spending their money on the unregulated machines rather than traveling to a brick-and-mortar casino.

In Illinois, after video poker was legalized, casinos there began to see a drop-off in players. A recent report from the Illinois Commission on Government Forecasting and Accountability found that more people used video gaming machines last year than placed bets at casinos and racetracks.

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