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Hollywood Casino St. Louis

A gambler who wished only to be identified as "Tom" plays a slot machine on gaming floor at the Hollywood Casino St. Louis on Wednesday, Dec. 4, 2013. Photo By David Carson, dcarson@post-dispatch.com

JEFFERSON CITY — In the latest attempt to slow the rapid-fire spread of untaxed and unregulated slot machines in Missouri, state gambling regulators have deemed the terminals illegal.

In a July 3 letter obtained by the Post-Dispatch, the lead attorney for the Missouri Gaming Commission ruled that the terminals contain functions that make them “gambling devices,” which are prohibited outside of licensed casinos.

The ruling came in response to a question by the St. James Veterans of Foreign Wars Post 5608, which asked if having one of the terminals in their facility would jeopardize the organization’s state-issued bingo license.

After testing the machine, the gaming commission said it would.

“Therefore, setting up and operating these devices at your VFW Post would be illegal,” the memo notes. “The Missouri Gaming Commission maintains a zero tolerance for illegal gambling and will take immediate action to revoke the bingo license of any organization that engages in any form of criminal activity.”

Although the gaming commission’s findings only apply to establishments that have bingo licenses, the decision comes as state and county officials are investigating what to do about the machines.

The terminals work like slot machines. A player inserts money, selects a game and decides how much to wager. Players who win money can cash out and get paid by the store cashier.

Similar machines have been popping up across the state in truck stops, gas stations and other places that have liquor licenses. But, so far, most prosecutors have not taken steps to prosecute the companies or the businesses hosting the machines.

In Platte County, Prosecutor Eric Zahnd has taken a supplier to court in a case that could determine whether the rest of the state can shut down the spread of the machines.

But, a resolution to that case could take two years, leaving state officials to watch as more machines flow into the state.

Despite the gaming commission’s findings, a spokesman for Attorney General Eric Schmitt said the Republican is monitoring the Platte County case and is refraining from further comment.

The machines, however, are making other state officials nervous.

May Scheve Reardon, executive director of the Missouri Lottery told the Post-Dispatch that she fears the terminals could divert money from the lottery’s games, which generate money for public schools.

Senate President Dave Schatz, R-Sullivan, also has pushed for legislation that would prohibit the machines and strip businesses of their liquor licenses if the terminals are present.

In the House, Speaker Elijah Haahr, R-Springfield, earlier formed a special committee to meet over the summer and fall to look into the issue of unregulated gambling. The panel has not begun meeting.

Gaming Commission Executive Director Dave Grothaus said there have been discussions about whether state officials, like the commission, could use their licensing powers to strip businesses of their ability to sell lottery tickets or alcohol if they have the slot machines on their premises.

“Certainly that would be an administrative tool that the state could use to address the problem,” Grothaus said.

In its ruling, the commission pointed to other states that found similar games were illegal.

In particular, the Iowa Supreme Court found that the devices were illegal, as did the attorney general in Wyoming.

In the meantime, Schatz said he hopes the commission’s ruling also helps prod local prosecutors to take action against the companies.

“We would like to have them go out and seize these machines,” Schatz said.

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