Missouri state authorities, working with federal agencies, are investigating allegedly illegal slot-style machines and the flow of billions of dollars from players to the companies that own them, the state’s attorney general said, as lawmakers simultaneously debate whether to legalize and tax the devices.
Missouri Attorney General Catherine Hanaway told a legislative committee that the probe, launched at the request of federal investigators, is examining operators’ finances, machine locations and ownership structures, with a view to possible enforcement action.
“We are investigating what the operators of the games are doing, how their money is flowing, where they have locations, how many machines, so then we can go in with some enforcement action,” Hanaway said, as reported by the Missouri Independent.
The investigation follows a federal civil court ruling that found games produced by Torch Electronics to be illegal gambling devices. Torch Electronics markets its devices as skill-based games that do not rely solely on chance, circumventing the gambling regulations that govern chance-based gaming.
Hanaway said the FBI, the Internal Revenue Service and other federal agencies are involved because of concerns related to money laundering and banking activity.
At the same time, the Missouri House is considering legislation to authorise the Missouri Lottery to license and tax similar machines as video lottery terminals, or VLTs. Supporters say regulation could replace an unregulated market with licensed machines and generate significant new revenue, while opponents warn of social costs and question the timing as investigations continue.
“Whatever you all do as a legislature to regulate them, then we’ll enforce that law,” Hanaway told lawmakers. “But right now it’s illegal, so I’m going to be going after them.”
The scope of the machines operating across the state remains unclear. There is no official count, but estimates have ranged as high as 25,000 devices, according to lawmakers. Unlike Missouri’s 13 licensed casinos, which report monthly wagering totals for taxation, the machines targeted by the investigation operate without state oversight and with no public reporting of consumer spending.
For comparison, Missouri casinos have reported about $17 billion in slot bets in each of the past three fiscal years. Casino profits are taxed at 21%, generating $364 million for public schools in the most recent fiscal year, according to state data.
Court records from the federal case showed that Torch machines generated $32 million from 2017 to 2023 at 20 locations with about 100 machines. Of that amount, $11 million was split with retailers, with about 65% returned to players as prizes.
Hanaway said the unregulated nature of the machines raised broader risks. “My concern is that they are all going on in the state, unregulated, bringing in billions of dollars,” she said, warning that continued inaction could attract organised crime.
Torch spokesman Gregg Keller said the company had not been contacted by investigators but would cooperate if approached. “We will continue to do what we have always done: cooperate fully with law-enforcement and the Legislature to pass and enforce fair regulation for everyone in the industry,” he said.
Enforcement has been uneven. Local prosecutors have often declined to bring charges, citing the resources and legal firepower of machine operators, Hanaway said. Only one felony prosecution has resulted in a conviction, while other cases have stalled or remain pending.
The proposed VLT bill, which survived a House committee vote by a single margin, would allow licensed machines with mandatory payout standards and could generate about $350 million in revenue within two years, according to official estimates. Backers say the funds could help support efforts to eliminate the state income tax.
Opposition cuts across party lines. State Representative Don Mayhew said he opposed the bill outright, while Senate President Pro Tem Cindy O’Laughlin cautioned lawmakers against focusing only on tax receipts.
The VLT legislation faces an uncertain path in the legislature, with Senate leaders signalling resistance even if the House advances the bill, leaving Missouri caught between stepped-up enforcement and renewed efforts to bring the machines into a regulated framework.
Original article: https://www.yogonet.com/international/news/2026/02/09/117514-missouri-probes-skill-gaming-slot-machines-as-lawmakers-weigh-legalisation
