HomePublicationsNewsletter ArchiveVolume 25Issue 33STATES CONTINUE TO COMBAT ILLEGAL GAMBLING MACHINES

State regulators across the country continue to attempt to crack down on illegal gambling machines.  Missouri is the latest state to heighten its efforts. In October, Lottery Director May Scheve sent a letter to lottery retailers warning them that they may face prosecution if they have illegal gambling machines in stores. She wrote: “Sales of games through illegal gambling devices hurts legal lottery sales and profits for public education.” Missouri’s first criminal case involving alleged illegal slot machines will go to trial in December. Now Missouri Senate President Pro Tem Dave Schatz has announced that he will file legislation in December to increase penalties for possession and operation of illegal slot machines. These machines can be found in numerous locations in Missouri, such as restaurants, gas stations, bars, and convenience stores. Mr. Schatz noted that the Missouri State Highway Patrol testified that the number of complaints it has received regarding the illegal machines has nearly quadrupled from last year, ballooning from 39 complaints in 2018 to 145 this year.

Other states have taken similar action to crack down on illegal gambling. In the spring of 2018, the Ohio Casino Control Commission promulgated new rules requiring skill game operators to apply for a license and pay registration fees, an action that has permitted Ohio authorities significant enforcement powers to reduce illegal gambling operations. For more information, see Volume 24, Issue 12 of the Michigan Gaming Newsletter. The Commonwealth of Pennsylvania has also introduced legislation that strengthens criminal fines and prosecutions for owners and operators of illegal gambling games. 

The State of Michigan has also continued efforts to reduce and eliminate illegal gambling operations. Based on information gathered statewide since 2015, the Michigan Gaming Control Board estimates more than 1,000 locations in Michigan have some type of illegal electronic gambling device. Working with the Michigan Attorney General’s Office and local law enforcement, the MGCB assists in eliminating these illegal gambling operations around the state. The results show that:

  • 92 locations have been investigated to date
  • 22 locations were closed via search warrants by the Attorney General’s office or local police
  • 37 Cease and Desist letters were served on owners and locations resulting in the closure of another 25 locations
  • 45 additional locations closed for unknown reasons 

Enforcement actions include:

  • 977 machines seized
  • More than $160,000 in cash forfeited to local law enforcement
  • 30 individuals faced 120 charges
    • 86 Felonies
    • 34 Misdemeanors

Currently, several more locations are being investigated.

Gaming Control Board Executive Director Rick Kalm noted: “Illegal gambling is unregulated, breeds crime and robs local governments, tribal governments, and the School Aid Fund of revenue. It also funds more illegal operations such as money laundering and organized crime.”

The Association of Gaming Equipment Manufacturers (“AGEM”) has recently introduced an initiative to combat the proliferation of illegal gambling machines, announcing that it has reached out to the American Gaming Association to partner on a document highlighting the many reasons for trying to eliminate illegal gambling machines. Marcus Prater, Executive Director of  AGEM, noted: “Unregulated gaming machines designed to look like regulated slot machines fool players into thinking they are getting a fair chance and enrich only the unregulated machine companies and their locations while creating a burden for regulators and law enforcement and providing no tax benefit or otherwise for the states where this activity takes place.”


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