Missouri firm accused of unlawful gambling has sued the state

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A Missouri-based company accused of operating illegal gambling devices filed a lawsuit this week alleging state law enforcement’s crackdown on rogue slot machines is a campaign of “harassment and intimidation.”

Torch Electronics LLC filed its lawsuit in Cole County against the Missouri Department of Public Safety, Missouri Highway Patrol, and Missouri Division of Alcohol and Tobacco Control.

The company alleges the state exceeded its authority by removing Torch machines from Warrenton Oil’s convenience stores, as well as other locations. Warrenton Oil joined Torch in the lawsuit.

“These government officials continue to threaten to remove Torch devices based solely on their own incorrect interpretations of Missouri gambling laws,” the lawsuit, filed by Jefferson City attorney Charles Hatfield, states.

“As such,” the lawsuit continues, “judicial intervention is necessary to prevent the Department and the Highway Patrol from exceeding their authority by continuing to remove Torch amusement devices from convenience stores.”

The lawsuit comes as Missouri legislative leaders are pushing for tougher regulations to root out illegal gambling machines across the state.

On Monday, the Senate briefly debated a bill sponsored by Senate President Pro Tem Dave Schatz, R-Franklin County, that would grant the Missouri Gaming Commission authority to go after these machines.

It also would allow for the revocation of a liquor license of any businesses found to be allowing the machines to operate on their premises.

“I just want them to stop violating the law,” Schatz said of the illegal machines.

Torch Electronics opposes the bill, arguing it would put the company out of business.

The machines in question operate similarly to what you’d find in a casino. A player inserts money, selects a game and decides how much they wish to wager. Winners get paid by the store cashier.

Missouri officials estimated there are 14,000 of these machines across the state.

The Missouri Gaming Commission has deemed them gambling devices, which are prohibited outside of licensed casinos, and the state Highway Patrol considers them illegal.

Torch disagrees, saying its machines reveal the outcome of the wager before the player moves forward. Thus, the company argued, they are not a game of chance and therefore not illegal.

Sen. Dan Hegeman, R-Crosby, who is chairman of the Senate Appropriations Committee, doesn’t buy Torch’s argument that its machines are not illegal gambling.

Because these machines operate outside the law, Hegeman said, there are no consumer protections in place and they do not abide by the same restrictions as other slot machines — including a portion of proceeds go to fund public education.

“I’m passionate about getting after these illegal machines who are stealing money from our kids for their own personal benefit,” he said. “It makes me mad. It makes me upset. They need to be taken out. They need to be destroyed. They need to get out of the state of Missouri.”

Last year, Hegeman earmarked $150,000 in Missouri Attorney General Eric Schmitt’s budget to crack down on illegal gaming machines around the state.

Schmitt initially declined to spend the money until a case involving illegal gambling machines in Platte County was resolved. That case ended last month, with Kansas-based Integrity Vending paying a fine after being found guilty of promoting gambling in the first degree.

Integrity Vending chose not to appeal the ruling.

The attorney general’s office then said the case proves these cases are local matters that should be handled by local prosecutors.

Hegeman said if the attorney general doesn’t spend the money, “we will probably make an adjustment to that. If we give them the resources to do that, and they don’t, then we will find something else to do with it.”

The attorney general’s office declined comment.

“I heard for two years that we need to wait for the Platte County case. As soon as that is adjudicated, we’ll take action,” Schatz said Monday. “Well, that case is resolved.”

In addition to filing a lawsuit, Torch Electronics also earlier this month donated $10,000 to a political action committee connected to its lobbyist, Steve Tilley.

Last summer, the company gave $90,000 to a different PAC connected to Tilley, and that money was doled out to various lawmakers in the run up to the November election.

Tilley is also a longtime friend and adviser to Gov. Mike Parson, as well as one of his top fundraisers. Torch donated $20,000 to a PAC supporting Parson’s bid for governor.

In its lawsuit, Torch is asking a Cole County judge to declare its machines are not gambling devices, and the state overstepped its authority when it removed machines from convenient stores.

The company also wants the judge to prevent the state from removing or participating in the removal of any Torch machines from convenience stores moving forward.

The Missouri Independent is a nonprofit, nonpartisan news organization covering state government and its impact on Missourians.