The Future of Missouri Sports Betting is More Unclear Than Ever After Slot Machine Lawsuit

The future of Missouri sports betting looks murkier than ever.

While the vast majority of states in the USA have legalized some form of sports betting or are on the precipice of doing so, The Show-Me State remains conspicuously absent from the group. Many entered the 2023 calendar year believing this would change. When all was said and done, there would finally be a plan to legalize sports betting in Missouri.

This logic tracked. Most of the states surrounding Missouri have already legalized gambling—including the neighboring Kansas, which has raked in millions of dollars in tax revenue despite a limited professional sports market. Plus, even though Missouri sports betting has failed to get the green light in each of the past five years, state officials at least talk about it. This isn't Alaska or Utah—places that won't even broach the subject. There is a clear interest in sports betting throughout Missouri.

Yet, despite the preliminary interest, previous Missouri sports betting bills have failed. And though an attempt is expected to be made before the end of this year, a recent slot machine lawsuit suggests The Show-Me State could be further away from legal gambling than most expected.

How Slot Machine Lawsuit Impacts Missouri Sports Betting

Earlier this month, a class action lawsuit was filed in Missouri against "operators of lottery machines, a gas station chain owner and several other individuals of corruption and racketeering involving the machines across the state." Here are the full details of the lawsuit, as explained by the Springfield News-Leader's Galen Bacharier:

"The class-action suit, filed March 3 in Missouri's Western District federal court, outlines an alleged corruption scheme between several entities: Torch Electronics, a company that owns and operates slot machines across the state of Missouri, and its owner Steven Miltenberger; 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 lawsuit] is filed on behalf of seven Missourians who allege they have played Torch's machines on several occasions and lost money from them. 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.'

At first glance, this lawsuit has no direct relation to sports betting. Slot machines are not the same as online or in-person sportsbooks. However, the expansion and monitoring of slot machines has long been the biggest obstacle to the legalization of Missouri sports betting. And if it was an issue before, you better believe it will be a divisive topic following this latest development.

Why are Slot Machines a Sticking Point in Missouri?

It isn't totally clear why slot machines were such a divisive subject in Missouri before now. All we know is that video gambling terminals (VGTs) derailed the state's last sports betting bill.

State Senator Denny Hoskins has been the loudest voice championing VGTs. Along with his supporters, he insisted they be part of the last gambling proposal. Their rollout, however, did not generate enough bi-partisan support. Other Missouri lawmakers feared the presence of VGTs would detract from the foot traffic inside the state's casinos while also potentially impacting business for whatever online sportsbooks ultimately received licenses.

Getting the requisite support for widespread VGT use feels almost impossible now. Missouri officials were worried about the resources that they would need to effectively monitor them in the first place. The recent lawsuit suggests illegal use is more rampant than the state expected—not to mention more predatory than portrayed.

Senator Hoskins has countered the incumbent risks with aggressive profit margins. His proposed gambling bill would legalize both sports betting and VGTs; sportsbooks would pay a 10 percent tax on their profits, while VGT operators would fork over a much more substantial 36 percent.

Will This Slot Machine Lawsuit Derail Attempts to Legalize Sports Betting in Missouri This Year?

In a vacuum, the slot machine lawsuit doesn't have to be the death knell for Missouri sports betting. There is an alternate gambling bill on the table. Senator Tony Luetkemeyer introduced an initiative that would legalize sports betting only. It also assesses a 10 percent tax rate.

Support for Senator Luetkemeyer's bill will likely grow in the wake of the slot machine lawsuit. State officials probably won't want to be associated with an activity that has run amuck on the illegal market. Then again, this lawsuit could have the opposite effect. Just as we know people in Missouri can find a way to sign up with one of the top reviewed online sportsbooks in the business, we now know they have easy access to black-market VGTs. And if VGT gambling is going to happen anyway, why shouldn't Missouri capitalize on money that will be spent no matter what?

It's a touchy subject. Right now, there doesn't seem to be a clear answer. But with the Missouri legislature meetings scheduled to adjourn on May 12, it won't be long before the state reaches a resolution—whatever it may ultimately be.