A bill allowing the Missouri Lottery to install video gambling machines at retail locations across the state faces a difficult path to final passage — even if the sponsor can find enough votes to get it out of the Missouri House.
Republican state Sen. Brad Hudson of Cape Fair, who also filed a bill allowing video lottery games, said in an interview Tuesday that he hasn’t pushed his proposal forward because it was assigned to a hostile committee.
Three Senate bills authorizing video lottery games were assigned to the Senate Appropriations Committee. None have received a hearing.
“When it comes to putting a committee in a situation where I don’t feel like I have the votes, I’m not going to be pushing for a hearing on something like that,” Hudson said.
That leaves the House bill, given first round approval Monday by a 74-70 vote, as the only legislation in a position to pass by the end of the session. There were two members who voted present and 16 who were absent, during the vote on the bill sponsored by state Rep. Bill Hardwick, a Republican from Dixon.
That is eight votes shy of the 82 needed for the House to pass it to the Senate.
Lobbyists favoring the bill said privately that there are 10 members who were absent on the Monday vote who will support it on the next vote. Lobbyists opposing the bill said privately that there are at least 10 members who voted for the bill on first approval who will vote against it on the next vote.
“If they do get to their 82, then we’ll be having some conversations in the Senate about that particular bill,” Hudson said.
But winning passage with only five weeks left before mandatory adjournment — and with the state budget unfinished — “would be a heavy lift,” he said.
The bill awaiting another House vote would:
- Allow video lottery games in licensed retail locations. There is no limit on the type of locations except they are prohibited in recreation centers marketed for children. There is no limit on the total number of games statewide;
- Require the games to be in a location “distinct and divided from the primary business operation area”;
- Declare unlicensed games, called “gray market” games, to be illegal slot machines;
- Require affirmative votes in cities and counties to allow the games and create a process for additional votes to prohibit the games afterwards;
- Double the boarding fee at casinos to $4 and direct the extra funds to the Missouri Veterans Commission.
The machines will be required to pay out at least 80% of the money wagered in prizes. The remainder will be split three ways — the lottery will receive 34% of the net to support state education programs, with retailers and operators splitting the other 66%.
The fiscal note for the bill estimates that within three years, there will be $1.1 billion for the three-way split — from about $5 billion wagered — generating approximately $350 million in state revenue.
The gray market games that resemble casino slot machines operate in almost every county of the state. They have proliferated despite efforts by the Missouri State Highway Patrol to initiate prosecutions under anti-gambling laws. After years of operation, convenience store owners, fraternal lodges and other establishments have become dependent on the revenue.
The best-known of the gray market game operators is Torch Electronics of Wildwood, which has a strong lobbying presence in the Capitol to oppose any effort to restrict its business and is a prolific political giver.
When Hardwick brought the bill to the floor, he had prepared an amendment that would strip provisions requiring retailers to give up gray market machines if they became video lottery retailers. The provision also would have required the removal of all gray market machines within six months of the launch of video lottery.
But during debate, an amendment directly declaring any unlicensed machines to be illegal slot machines was added.
“I call this, if it looks like a duck, walks like a duck, and in this case, smells like a duck, it’s a duck,” said state Rep. Jim Murphy, a St. Louis Republican who offered the amendment. “We need to regulate these gray machines.”
Hardwick had only one significant question about the amendment as he sought votes.
“I’m going to ask everyone the same question: If your amendment gets on, will you support the bill?” he said.
“Yes,” Murphy replied.
“Nothing further, Mr. Speaker,” Hardwick said.
In recent years, Senate debate on gambling has been split among casino supporters, who wanted sports wagering, video lottery supporters and those who were happy with no action, leaving the gray market machines in place.
Hudson said his top goal for legislation on video lottery is to eliminate the gray market machines.
“I’ve gotten reports of kids playing these machines,” Hudson said. “We can’t have this. We need to do something about it. I don’t think this issue is going to just go away.”
During House debate, defenders of the gray market machines said allowing them to operate was a question of liberty. State Rep. Bryan Wolfin, a Republican from Ste. Genevieve, called the licensing and rules in the bill “a complex and ridiculous system that grows government” and questioned whether the gray market machines are as menacing as some see them.
“These things have been in this gray area for the last five or six years, and to my knowledge, Missouri is still operating,” Wolfin said.
Hardwick defended the bill as a compromise that allows the revenue flow to continue while assuring the public that the machines offer a fair chance of winning.
“At this point, almost everybody in the building is dissatisfied with our product to some degree, and that’s because I did not create a product that was trying to advantage one business over the other,” Hardwick said.
The final vote split both parties. There were 28 Democrats who voted for it along with 46 Republicans. There were 16 Democrats opposed, joining 54 Republicans.
If the final eight votes can be found to move the bill to the Senate, Hudson said, he will be looking at the bill to determine whether it adequately suppresses gray market machines without a net expansion of gambling.
“My goal is to restrict, regulate and (to) protect kids,” Hudson said. “I am opposed to gambling expansion. I am not going to be getting behind legislation that I feel like is an expansion of gambling.”
