Missouri VLT Bill Backers Seek Other Legislative Opportunities

March 1, 2023
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After coming up short five times in efforts to legalize video lottery terminals (VLTs) as part of legislation legalizing retail and mobile sports betting in Missouri, one veteran Republican state senator still believes regulating and taxing these machines is crucial to halting the expansion of grey-market games.

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After coming up short five times in efforts to legalize video lottery terminals (VLTs) as part of legislation legalizing retail and mobile sports betting in Missouri, one veteran Republican state senator still believes regulating and taxing these machines is crucial to halting the expansion of grey-market games.

Senate Bill 1, a fifth bill sponsored by Senator Denny Hoskins to authorize VLTs, as well as both land-based and mobile sports betting, was defeated last week by a vote of 10-2 in the Senate’s Appropriations Committee.

Hoskins’ bill would have allowed VLTs to be placed in restaurants, bars, truck stops and facilities operated by fraternal and veteran organizations, replacing Missouri's estimated thousands of unregulated supposedly skill-based games, also known as grey-market machines.

Some lawmakers are strongly opposed to linking the two issues together and want to legalize sports betting this session as Missouri residents continue to place bets in neighboring states such Kansas and Illinois or with illegal offshore websites.

Casino companies and professional sports teams have made it clear they are opposed to linking sports-betting legislation with any proposal to legalize unregulated gaming in the state.

Nevertheless, the VLT issue could come up again if Hoskins tries to amend other Senate bills as they move through the process.

“It’s my hope we will have opportunities to revisit VLTs as the session continues,” said Hoskins, who is ineligible to run for another Senate term in 2024, after first being elected in 2016. Missouri’s term limits law allows members of the House of Representatives and Senate to serve a maximum of eight years.

“It’s estimated that there are more than 20,000 unregulated gaming devices currently in operation in our state,” Hoskins said in a statement. “These machines are completely unregulated and they contribute no tax revenue to the state.”

Hoskins has argued for sometime that regulated VLTs taxed at 36 percent could generate more than $250m annually for education and veterans homes and cemeteries. The machines would be licensed and regulated by the Missouri Lottery.

“The legislation I proposed … would create a similar boost to local businesses, as lottery retailers who host VLTs would receive an equal share of the games’ proceeds,” Hoskins said.

The Missouri Lottery does not take a position on proposed legislation, a lottery spokeswoman said Tuesday (February 28).

The Missouri Gaming Association has joined 22 other commercial and tribal gaming associations opposed to the spread of unregulated gaming that are actively urging state liquor boards to issue “administrative discipline” for licensees found to be hosting grey-market machines.

A six-page fact sheet issued this month by the Association of Gaming Equipment Manufacturers and the American Gaming Association also urges state and local agencies that issue business licenses to consider pulling those licenses for businesses offering unregulated games.

Other solutions suggested by the trade associations to deal with the proliferation of these games in Missouri and other states is to establish a small state and local government task force of prosecutors and law enforcement to bring selected enforcement actions.

The Missouri Lottery estimates its losses based on competition from grey-market machines at $50m.

Hoskins, who supports legalization of VLTs, agrees unregulated gaming machines are a problem, saying as “anyone who has watched the proliferation of untaxed gaming machines … knows, there are currently no rules where the devices can be placed and who can access them.”

The Missouri Gaming Commission has deemed these machines to be gambling devices, which are prohibited outside licensed casinos, and the state highway patrol also considers them illegal.

In other legislative activity, Senate Bill 279, also authored by Hoskins, has had its second reading and has been referred to the Senate Transportation, Infrastructure and Public Safety Committee.

The bill simply removes the exclusion of sports betting from the definition of “gambling game” for the purpose of gaming conducted on licensed gambling boats and adds “sports wagering” to the definition of “games of skill.”

Legislative committees in both chambers of the Missouri legislature have successfully moved three bills forward that would legalize retail and mobile wagering on sports.

As of Tuesday (February 28), House Bills 556 and 581 were still waiting to be placed on the House calendar. The similar bills are expected to be consolidated prior to being considered by the full House.

Senate Bill 30 was passed by the Senate Appropriations Committee and has been placed on the chamber’s calendar for perfection and reprinting.

In the Missouri Senate, if a bill is passed favorably out of committee and a majority of members vote to perfect, the bill is reprinted in its original or amended form. After perfection, the bill goes on the Senate calendar for a third reading and final passage.

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