Missouri Advances Bill to Legalize and Regulate Store Slot Machines
Missouri Moves Toward Legalizing Store Slot Machines
A bill advancing through a Missouri House committee aims to legalize and regulate slot machines found in convenience stores. Sponsored by Representative Bill Hardwick, a Republican from Dixon, the legislation would require companies to remove unlicensed machines within two years. It proposes licensing of operators and places the Missouri Lottery in charge of overseeing these video lottery terminals.
Overview of the Revised Gambling Legislation
The slot machines currently operating in many retail outlets are often called “no chance games,” due to their design that reveals the outcome before a bet is made. Sellers of these machines label them as “gray market” devices, asserting that this feature exempts them from Missouri’s gambling restrictions.
However, this argument has weakened recently, as a federal jury ruled in October that Torch Electronics, the state’s largest provider of such machines, must pay $500,000 to a competitor. The court found that Torch unfairly displaced this competitor from 20 locations.
Under Hardwick’s bill, these machines would need to comply with regulations similar to those applied to casino slot machines and lottery ticket vendors. Specifically, machines would be required to return at least 80% of wagers as prizes, paralleling casino slot payout rates, and be subject to a 21% tax on profits. Current evidence from the trial demonstrated that Torch’s machines only returned about 65% of wagers as prizes, with payouts taxed as ordinary income.
If enacted, the law would give retailers one year to replace unregulated “gray market” machines with devices licensed through the Missouri Lottery’s monitoring system. Machines not integrated into this system would have to be removed.
Potential Benefits for Missouri
At a public hearing held on January 27, advocates including Rep. Hardwick argued that legalizing video lottery terminals could generate up to $600 million annually to support education funding. Additional income from increased casino fees and licensing could bring another $55 million to programs benefiting state veterans. If these estimates are accurate, video lottery would become Missouri’s most lucrative form of gambling for both the state and operators.
Recently, Missouri expanded its gambling offerings by legalizing sports betting in November 2024. In its first month, gamblers wagered $543 million, won back $437.7 million, and the state earned $521,000 in tax revenue from profits. Overall, gambling generated approximately $700 million for education in the fiscal year ending June 30, 2025, with $364 million from casino taxes and $337 million from the state lottery.
In related developments, the Osage Nation has advanced plans for a new large-scale casino near Lake Ozark in Miller County, indicating further growth in Missouri’s gambling industry.
