A leading provider of slot machines in Missouri says it is unplugging its terminals in gas stations, bars and other retailers — including those in Texas County — amid an ongoing state and federal crackdown on illegal gambling.
In a letter to its customers, Wildwood-based Torch Electronics said it will cease operations — at least temporarily — of its games April 10, potentially ending a decade of rapid but controversial growth across the state.
Torch said it is cooperating with the U.S. attorney’s office and the Missouri attorney general in an ongoing investigation of the state’s gambling industry, despite the company’s belief that its machines were not illegal.
“While we are confident in our position, criminal proceedings create real uncertainty for our business — and more important, they create risk for all of you,” the letter noted. “We take that seriously, and we want to do everything we can to protect you.”
The company said it plans to leave the machines in place, but will disable them. They plan to post signs telling customers that they are waiting for legal clarity from the Missouri General Assembly, which is considering legalizing the terminals.
“We know this news comes quickly and we are sorry for any inconvenience,” the company wrote.
Missouri Attorney General Catherine Hanaway, who has been leading the charge to rid the state of the untaxed and unregulated machines, said the looming shutdown is the result of a coordinated probe by her office and the U.S. Department of Justice.
She warned that retailers who continue to offer gambling at their stores through other companies should be prepared for legal action.
“While this is a tremendous step forward for Missouri, our office will continue to investigate and seek enforcement action against other operators, manufacturers and retail stores facilitating this illegal activity,” Hanaway said in a statement.
Torch’s looming exodus began taking shape in February after U.S. District Judge John Ross ruled the machines distributed by Torch are “gambling devices,” meaning they cannot exist outside of the state’s 13 casinos.
That decision was followed by St. Louis County and St. Charles County officials calling on businesses to shut down the machines. Hanaway also joined in the crackdown.
Those decisions will cost the gas stations and bars a stream of income.
During a recent Senate committee hearing, Lynn Wallis of Cuba, Missouri-based Wallis Companies, which has convenience stores across Missouri, said slots in the company’s outlets brought in more than $1 million last year.
Angie Shulte, a lobbyist for Casey’s General Store, said the gas station chain recently estimated that placing four or five games in its Missouri stores would generate an average of $63,000 per store annually.
The Missouri Gaming Association, which represents casinos in the state, has said there are an estimated 14,000 of the devices throughout Missouri, including around 6,000 owned by Torch.
Unlike her predecessors, including Republican Andrew Bailey and U.S. Sen. Eric Schmitt, Hanaway has taken an aggressive posture against gambling since being appointed by Gov. Mike Kehoe.
Her office sued five retail shops in Dunklin County in February, alleging the businesses were operating illegal gambling machines on their premises.
Torch’s decision comes as state lawmakers are considering legislation that would ban gambling terminals in gas stations and bars and replace them with a legalized and taxed system run by the Missouri Lottery that could generate over $300 million a year for the state.
House Bill 2989 faces an uncertain fate in the Senate after narrowly winning approval in the House on an 83-66 tally.
