Lawsuit over “gray market” VLTs could influence sports betting legalization in Missouri

Last week, a class-action lawsuit was filed in Missouri alleging corruption and racketeering on the part of an operator of “gray market” lottery machines, a gas station chain owner, and several other individuals. Local media points out the suit could have political implications for the ongoing push to legalize sports betting in the Show Me State legislature, as this issue has become increasingly linked to the regulation of these controversial machines.

The lawsuit was filed on March 3 in Missouri’s Western District federal court on behalf of seven Missourians who allege they have played Torch Electronics‘ machines on several occasions and lost money from them. The suit outlines an alleged corruption scheme between the company, which owns and operates slot machines across the state, and its owner Steven Miltenberger.

The suit also names Warrenton Oil Company, which owns gas and convenience stores across the state which often house the machines; and Mohammed Almuttan, a St. Louis-area convenience store owner-turned-informant who has previously been sentenced for his role in a contraband conspiracy scheme, and his brother Rami Almuttan, who was also involved in the scheme.

The suit alleges that “an enterprise promoting and engaging in illegal gambling exists among Torch and Miltenberger and the owners of the convenience stores, gas stations, bars, restaurants, and other places of public accommodation where Torch’s slot machines are installed and operated in the State of Missouri,” as reported by the Springfield News-Leader.

The machines, which Torch refers to as “No Chance Games” in that players can view the result of the game before playing, have proliferated throughout Missouri and other states in recent years. There are currently no state regulations surrounding them.

Although it could initially seem unlikely, the issue might have implications for the legalization of sports betting. Legislators in Jefferson City have long been attempting to legalize sports betting in Missouri, but often have done so by linking their proposals with the regulation of video lottery terminals (VLTs).

Senator Hoskins

That is the case with Senator Denny Hoskins, a Republican from Warrensburg, who has proposed that legislation to legalize sports betting should be linked to the legalization of VLTs run by Torch and other companies in the state. Hoskins maintains that the legalization of VLTs could generate even more revenue.

Lawmakers have been divided on the prospect of legalizing gaming machines like VLTs. Earlier this year, the Senate voted to advance one bill to legalize sports betting without the inclusion of VLTs, while the other bill, proposed by Hoskins, was voted down. However, Hoskins has made it clear that he will not support the legalization of sports betting without the addition of VLTs.

Casino operators may be closely watching the recently filed lawsuit, as it could have a major impact on the ongoing discussions about sports betting and VLT legalization in the state. Leaders from both chambers and major political parties have expressed a desire to pass sports betting legislation this year, but it remains uncertain if a compromise can be reached.

The legislature returns from spring break on Monday, March 20; the annual legislative session ends in early May.