Published: January 13, 2020

Editorial: Unregulated video gambling rips off the state and endangers problem gamblers

Reasons abound why the spread of unlicensed payout video-gaming machines in Missouri’s bars, restaurants and gas stations constitutes an intolerable situation. Legalized gambling was approved here as a tradeoff for state tax revenue, but the unlicensed machines don’t bring in any. The state regulates legal gambling operations to ensure they aren’t cheating their patrons, but there is no such protection for those who play these machines.

Another important reason regulation is necessary is that gambling is an addictive activity for some people, which is why the state requires that access to addiction services and a voluntary self-exclusion program be offered at regulated gambling sites. These unregulated sites have no such resources.

Legal gambling allowed in Missouri includes the state-run lottery and state-regulated casinos. The state regulates the games to ensure they aren’t rigged against players. For example, casino slot machines must offer payouts of at least 80% of what’s put into them.

The state taxes legal gambling — a significant revenue stream for the state — and collects fees from the casinos to fund gambling-addiction programs. Information about those programs is available at the casinos, and they work with the state to prevent gambling by problem gamblers who have signed onto a voluntary self-exclusion program.

None of this happens with the video gaming machines that have sprouted up all over the state. Although the games offer potential payouts of amounts greater than patrons put in, the machines’ purveyors insist it isn’t gambling and so doesn’t fall under the state’s regulatory jurisdiction.

Yet officials believe the machines almost certainly are drawing gambling revenue away from the lottery and the casinos, while giving nothing back to the taxpayers. And there’s no way to know if safeguards like the state’s 80% rule on payouts is in play. Unlike licensed casinos, the payouts of these machines aren’t reported to anyone.

As for those self-excluding gamblers who, in a moment of weakness, might be tempted to blow a paycheck at the casino but can’t get in because they’re on the self-exclusion list — these unregulated machines provide a path to failure. As Missouri Lottery Executive Director May Scheve told the Post-Dispatch’s Jack Suntrup recently: “If they’ve gone through the effort to be excluded from casinos and lottery products, they’re gonna see these (unregulated) products as possibly their best alternative.”

Missouri legislators this session are expected to resume debate over the fate of these unregulated machines. As we’ve argued before, the machines should either be brought into the fold of state regulation, as is the case in Illinois, or they should be banned altogether. Anything else is unfair to taxpayers, the legitimate gambling operators — and the gamblers themselves.

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