House gives preliminary approval on video gaming machine regulations

By Sterling Sewell, Missouri News Network

JEFFERSON CITY — The Missouri House gave preliminary approval Monday for a bill that would establish a regulatory system for video gambling machines and would ban all unlicensed gaming machines currently in use.
The bill passed 74-70. It needs one more roll-call vote in the House before moving onto the Senate where similar bills have failed to gain passage in recent years.
Senate President Pro Tem Cindy O’Laughlin, R-Shelbina, has indicated previously that gambling in the state is not her top priority.
Video gaming machines, referred to in the bill as “no-chance” machines, have become popular in gas stations, bodegas and convenience stores throughout the state.
These machines are called “no chance” because they do not determine outcomes based on a random number generator. Instead, they rotate through predetermined outcomes. These game machines are also called “gray” games because they fall into an unregulated legal gray zone.
While the Missouri Gaming Commission has declared the machines illegal, little action has been taken by prosecutors to remove the machines.
The bill, proposed by Rep. Bill Hardwick, R-Dixon, would prohibit any new “no-chance” machines in the state, and create regulations on new licensed machines Hardwick calls Video Lottery Terminals. A litany of amendments to the bill approved during floor discussion greatly altered the bill.
An amendment from Rep. Brenda Shields, R-St. Joseph, would require all counties and municipalities to opt in to the regulations proposed in the bill.
Another amendment added to the bill from Rep. Jim Murphy, R-St. Louis, would ban all machines that are not currently licensed.
A third amendment added by Rep. Jeff Myers, R-Warrenton, would establish the Missouri Gaming Bureau. The bureau would create a law enforcement agency to regulate and investigate gaming violations, Myers said. He added that his amendment would be funded by fees in the initial bill outlined by Hardwick.
For those counties and municipalities that do opt in, VLTs and the regulations initially set out by Hardwick’s bill would be in place.
Under the bill, VLTs would be required to operate with a random outcome, display complete play histories and connect to a centralized computer system run by the state lottery commission, along with numerous other regulations. Only those 21 years old may play the regulated machines.
“We owe it to them to give them regulatory certainty and give them clarity on how to operate and be successful,” Hardwick said. “We also owe it to our people who are playing those games.”
Hardwick also added requirements that VLT machines be in a separate area within retailers’ locations.
An amendment from Rep. Marty Joe Murray, D-St. Louis, would add a warning about gambling addiction on all machines.
Licenses would be required for operators, manufacturers, distributors and retailers of the VLTs. The initial licenses would be nonrefundable for the first year. The license would then be renewed at a lower cost for a five-year period. The money acquired through these licenses would go into the State Lottery Fund.
Additionally, an annual $1,000 fee must be split between operators and retailers for each VLT in service. First, $200 of the $1,000 would go into the State Lottery Fund, then the remainder would go toward funding enforcement of the bill’s regulations, the Missouri Veterans Commission and the local municipalities the machines operate in.
Operators must also pay 34% of the revenue made from the machines into the State Lottery Fund, and each county will receive 10% of the revenue generated within the municipality for public safety services. The remaining 66% will be split evenly between the retailers and operators.
The State Lottery Fund is earmarked for use in public education. In the 2024 financial year, lottery proceeds toward the Missouri Department of Higher Education were $95 million and proceeds toward the Missouri Department of Elementary and Secondary Education were $432 million.