A bill advanced by a Missouri House committee on Monday proposes a two-year timeframe for companies to eliminate unregulated slot machines in convenience stores. Initiated by Rep. Bill Hardwick, a Republican from Dixon, the bill aims to legalize video lottery terminals, mandate operator licensing, and assign regulatory oversight to the Missouri Lottery.
The machines, prevalent in various convenience stores and retail outlets, are dubbed “no chance games” due to a feature that reveals the outcome of the next play before a bet is placed. Vendors refer to them as “gray market” machines, asserting that this feature excludes them from Missouri’s anti-gambling laws.
However, this argument is losing strength. In October, a federal jury ordered Torch Electronics, the state’s largest vendor based in Wildwood, to pay $500,000 to a competitor supplying traditional arcade games, concluding that Torch had unfairly ousted them from 20 locations.
Hardwick’s bill would impose regulations akin to those for casino slot machines and lottery retailers that sell physical tickets. The proposal stipulates that games must pay out at least 80% of wagers as prizes, similar to casino slots, which are taxed at 21% of profits. Evidence from the federal trial indicated that Torch machines returned only about 65% of wagers as prizes, with these payouts taxed as ordinary income.
If enacted, the bill would require retailers to transition from gray market machines to devices licensed by the Missouri Lottery within a year. Existing machines would be removed, as only machines connected to the lottery’s computer system for play monitoring would be permissible after the deadline.
At a public hearing on January 27, Hardwick and advocates projected that the new video lottery games could generate up to $600 million annually for education. Additional revenue from increased casino boarding fees and licensing charges might contribute up to $55 million for state veterans’ programs. If accurate, video lottery would become the most lucrative form of gambling for both vendors and state finances.
Missouri’s last gambling expansion, sports wagering, was approved by voters in November 2024. In its first month in December, bets reached $543 million, with $437.7 million won back, leading to $521,000 in state tax revenue from profits. Overall, gambling produced approximately $700 million for educational programs in the fiscal year ending June 30, 2025, with $364 million from casino taxes and $337 million from the state lottery.
In other Missouri gambling news, the Osage Nation is advancing plans for a new large casino on a 28-acre site near Lake Ozark in Miller County.
- SCCG Management. The Gambling Industry’s Global Connector. Access Here.
- Source: SCCGManagement.com