In a key test case for Missouri, the owner of a company that has distributed thousands of unregulated grey-market games to gas stations, convenience stores and other locations faces illegal gambling charges in Adair County in the northeastern part of the state.
Steven Miltenberger, owner of Torch Electronics, faces three counts of possession of a gambling device, a class A misdemeanor, according to three probable cause documents released by the Adair County prosecutor’s office.
Possession of a gambling device carries a maximum penalty of one year in county jail and a $2,000 fine if convicted. A hearing in Circuit Court of Adair County is scheduled for Thursday (June 9).
Miltenberger’s attorney, Travis Noble, said he plans on vigorously defending his client against the charges.
“We don’t believe that we are in violation of the law. We maintain that these are not gambling machines,” Noble told VIXIO GamblingCompliance.
The documents show Sgt. Cory Craig of the Missouri Highway Patrol detailed three instances of alleged illegal gaming by Miltenberger between September 29 and October 5, 2021 at three separate locations within Kirksville.
Torch has argued its machines do not meet the definition of gambling device under Missouri law, because the machines do not use random number generators like traditional slot machines in casinos.
Noble said there was nothing random about Torch’s machines, because they reveal the outcome of the wager before the player decides to move forward. Thus, the slot machines are not games of chance and not illegal.
On its website, Torch describes itself as “as an industry leader in amusement devices.”
Missouri Lottery officials estimate there are more than 14,000 of these so-called “no chance” or “pre-reveal” devices across the state. The state has legal, regulated gaming in the form of 13 casinos, charitable bingo and raffles and a state lottery.
Despite ongoing efforts by the state highway patrol and county attorneys to bring cases against the owners and distributors of these machines, Miltenberger and Torch have not given up on trying to influence lawmakers in Jefferson City to legalize the games.
Torch last month directed $240,000 in donations to a network of political action committees (PACs) run by its lobbyist Steven Tilley, according to the Missouri Ethics Commission.
Tilley, a Republican, served in the Missouri House of Representatives from 2004 to 2012. He became majority leader in January 2007 before being elected speaker in November 2010 and then resigning in 2012 to become a lobbyist and political consultant.
Torch, along with Warrenton Oil, last year sued the Highway Patrol to have a Cole County judge bar the state and law enforcement agencies from seizing its machines.
The Missouri Department of Public Safety and the Missouri Division of Alcohol and Tobacco Control are also defendants in the lawsuit. A hearing in that case is scheduled for June 16.
The companies allege state law enforcement officials exceeded their authority by removing Torch terminals from Warrenton Oil stores, as well as other locations.
Torch also sued Greene County last year after law enforcement seized their games from a convenience store in the county. A hearing in that case is scheduled for Monday (June 6).
According to Missouri court records, there were no hearings currently scheduled in an illegal gambling case brought by Linn County prosecutors who charged Torch, not Miltenberger, with illegal gambling.
Linn County attorney Shiante McMahon in January 2020 charged Torch with promoting gambling in the first degree, a class E felony that carries a $10,000 fine if the company is found guilty.
Attempts in the state legislature to deal with the unprecedented growth of unregulated devices have come up short over the last few years.
Senate Bill 98, introduced the past session by Republican Senator Denny Hoskins, stated that an illegal gambling device is one not regulated by gaming authorities that involves a cash payout.
The measure would have permanently banned individuals and companies convicted of illegal gaming from participating in any way should video lottery terminals be legalized in Missouri. Hoskins’ bill was set aside earlier this year as lawmakers tried but ultimately failed to pass a measure to legalize sports betting.