A video gaming machine at Midwest Petroleum (copy)

A video gaming machine is seen at Midwest Petroleum Feb. 24, 2020. There are an estimated 14,000 “no-chance” gaming machines in Missouri.

Sometime around 1911, George Deskin opened a lunchroom in Moberly about a block from the railroad yards that made the north Missouri community prosperous.

Along with meals, Deskin’s restaurant offered a game in the form of a gum dispenser. For a nickel, patrons could buy gum and possibly win 10 cents to $1 in tokens. The game alerted players whether the next nickel would only buy gum or also win two to 20 tokens worth 5 cents each.

The machine was set so that players who used a real coin received gum and any tokens indicated. Customers who played with tokens didn’t get any gum.

Little is known about Deskin or his restaurant except the location and the legal precedent it created.

Instead of paying a $25 municipal fine for an illegal gambling device, Deskin took his case to the Missouri Court of Appeals. The court upheld his conviction, with Judge James Johnson writing in 1913 that the dispenser was illegal and it did not matter if a customer knew the result of the next play.

It was the lure of a payout on a future, unknown result, that kept people playing and that is what made it illegal, Johnson wrote.

In his ruling, Johnson sent a message to the future — that someone would try again to make a machine that would survive prosecution.

“In no field of reprehensible endeavor has the ingenuity of man been more exerted than in the invention of devices to comply with the letter, but to do violence to the spirit and thwart the beneficent objects and purposes, of the laws designed to suppress the vice of gambling,” Johnson wrote.

Today in Missouri, an estimated 14,000 video machines offering prizes of hundreds and sometimes thousands of dollars are drawing customers in convenience stores, laundromats and fraternal lodges. Most of the machines, like Deskin’s gum dispenser, allow a player to know the outcome of the next play and an opportunity to avoid the expense of losing.

Because these machines operate outside of the legal gaming system, there is no public accounting of the dollars spent in the machines, as there is for the Missouri lottery, gambling boats and bingo games.

The only clues indicating how much money the machines handle is contained in documents filed with criminal charges against machine owners and retailers who host them. One machine seized in September 2019 in Linn County, home to 11,920 people, had tallied $180,000 and another, seized at the same time, took in $164,741.

In Andrew County, home to 17,712 people, the Missouri State Highway Patrol and local agencies seized 11 machines in November and found they had received $538,974 and paid out $361,866.

The filings do not indicate how long it took to reach those tallies. Similar amounts spent on lottery tickets would generate about $190,000 for state education programs. The average handle, applied to the estimated number of machines, would total $950 million statewide.

The lottery, which gives the state about 22% of sales, sold $1.6 billion in tickets in the most recent fiscal year. Casinos, which pay a 21% tax on their net profits, made $926 million and paid $194.5 million in taxes, also to support education, in the first seven months of the current fiscal year.

While lawmakers debate whether to increase penalties and specifically outlaw the machines or somehow bring them into the stream of taxed, legal games, the courts are working through civil and criminal cases to determine their legitimacy.

That means Deskin’s gum dispenser is getting a lot of attention.

The cases

The disclaimer prominently placed on all of the “no-chance” gaming machines placed in the state that declares it does not violate state law.

According to the Office of State Courts Administrator, there have been 26 criminal cases filed in 18 counties in the past two years for misdemeanors and felonies related to gambling.

A few have been dismissed, and there has been one conviction.

In Platte County, Integrity Vending, a Kansas-based company, was found guilty in September, paid a $7,500 fine and removed all its machines from the state.

Torch Electronics, owner of many of the machines, is charged with felony promotion of gambling in Linn County. And James McNutt, president of Midwest Petroleum, operator of 44 convenience stores in the state, is charged with possession of a gambling device, a misdemeanor, in Franklin County.

Torch and Midwest Petroleum are worried that prosecutions will become general and they are suing the Highway Patrol and other state agencies, claiming to be victims of a “campaign of harassment and intimidation.”

“We would like the Cole County Circuit Court to give us a ruling against the Department of Public Safety so we can try to get some consistency statewide on trying to enforce this law,” said Chuck Hatfield, attorney for Torch.

The lawsuit singles out Franklin County for complaints about enforcement. McNutt was charged in November, and Prosecuting Attorney Matt Becker is awaiting documents to determine whether to file additional charges after a seizure from a Midwest Petroleum location in St. Clair.

When told that his county is accused of harassment and intimidation tactics, Becker laughed and said he considers it to be law enforcement.

“It is a pretty laughable claim there is an army of stormtroopers going in at 3 a.m. to seize these machines,” Becker said.

Torch is also being sued over machines placed in Crawford County, with one suit using a law written in the 19th century allowing losers to recover money lost gambling.

The next case to be heard in any court will come Thursday in Linn County. Prosecuting Attorney Shiante McMahon will present evidence at a preliminary hearing in the case of Florida-based Tritium International Consultants.

Tritium’s operation is different from cases involving Torch and other companies. Instead of retail businesses, it does business as Missouri E-Raffle and puts its devices in places like fraternal lodges and veterans halls.

“I am not the least bit concerned about this,” Tritium owner Jeremy Baxley said in an interview. “I believe this product follows the laws of the state of Missouri.”

On Sept. 12, 2019, Brookfield police Lt. Tom Bunnell visited the Eagles Lodge and seized six machines. Lodge President Jerry Stone said the machines had been there about five months and the net proceeds were split evenly with Tritium.

McMahon has also filed felony charges against Torch and a Columbia company called Capital Vending, which are set for preliminary hearings on March 9.

She charged the companies that own the machines rather than the establishments that hosted them because that is who is reaping the biggest profits, she said.

“I would prefer to prosecute the vendors because I believe that is where the actual reports the officers provided pointed,” McMahon said. “That is where the crime occurred.”

Tritium’s angle on the video gaming market is to use the not-for-profit status of its host sites and provide what Baxley calls an electronic raffle. Under the Missouri Constitution, “any organization recognized as charitable or religious pursuant to federal law” may conduct raffles and sweepstakes.

What makes Tritium’s machines different from those hosted in for-profit retailers is how they work, attorney Nelson Mitten said in an interview.

Unlike machines owned by Torch and other vendors, or Deskin’s gum dispenser, Tritium does not make “pre-reveal” machines, Mitten said.

“The constitution allows these organizations to have raffles and we are merely providing an electronic raffle as opposed to a physical raffle,” he said.

When a player starts, the machine creates a pool of tickets with pre-selected winners. The player purchases tickets and learns immediately if it won or not and the prize. If the player purchases all the tickets, the process starts over.

“All we have done is modernize a traditional fundraising raffle,” Baxley said. “The Missouri Lottery Commission and the Missouri Gaming Commission are mad at me because I created a unicorn.”

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