Newly inaugurated Gov. Mike Kehoe has an opportunity right out of the gate to strike a blow for law and order, strike down one of the most putrid examples of pay-to-play politics in Missouri and at the same time bolster state revenue.
Here’s how: He should finally lead the charge to confront thousands of untaxed, unregulated video gambling machines operating illegally across Missouri, courtesy of a corrupt General Assembly that’s in the pockets of big-monied gaming interests.
There are an estimated 14,000 or more unregulated video gaming machines operating in bars, gas stations and other venues throughout Missouri, generally under the control of a few big players in the industry.
The machines’ owners claim the games are structured in a way that makes them technically outside the reach of state gambling laws. Nonsense. Players plunk money into the games in hopes of getting more money back; that’s gambling, pure and simple.
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Yet unlike the state’s heavily regulated, heavily taxed casino industry, the video games pay no gaming taxes and submit to no state oversight to ensure the games are fair and that minors aren’t playing them.
As we have reported on this page many times over the past few years, this unregulated industry has run amok in Missouri because its purveyors pump big money into the campaign coffers of state lawmakers and others.
Former Gov. Mike Parson — who has close political ties to former Missouri House Speaker Steve Tilley, a powerful top lobbyist for the unregulated industry — refused throughout his tenure to take a stand for the state’s gaming laws. Even the state’s chief legal enforcement official, Attorney General Andrew Bailey, has taken a pass on confronting the industry as his campaign apparatus has collected donations from it.
As a measure of the brazenness of these politically connected gaming entities, they unsuccessfully sued the Missouri Highway Patrol a couple of years ago to try to get it to stop investigating the legality of the games.
Some companies involved in Illinois’ similar (but fully licensed) video gaming industry say they won’t even explore setting up shop in Missouri because participating in such an unregulated market could cost them their Illinois licensing. That’s how shady the Missouri industry is.
All the while, Missouri is losing untold but potentially significant amounts of gaming tax revenue as patrons who might otherwise gamble at licensed casinos choose instead to gamble on the unregulated machines. Thanks to that lack of regulation, there’s no way to know how many of those gamblers might be getting cheated by the machines or might be underage.
With the start of the new legislative session, a handful of lawmakers in both parties are pursuing bills that would rein in this rogue industry by imposing licensing and taxation standards.
That approach would represent a de facto expansion of legalized gambling in Missouri, which should be part of a larger discussion. But whether it’s by regulation or banishment, the industry must be confronted to address what one of the reform sponsors, freshman state Sen. Sen. Brad Hudson, R-Cape Fair, aptly calls “a ‘Wild West’ situation.”
As Hudson told the Post-Dispatch’s Kurt Erickson recently, “I’m not going to pretend that this is not going to be a heavy lift.”
Indeed. And the fact that a Kehoe campaign PAC last fall accepted $250,000 from Wildwood-based Torch Electronics, a top purveyor of the unregulated machines, isn’t encouraging. Clearly they’re betting the new boss will be the same as the old boss in terms of laying down for an industry that flouts Missouri law while draining away tax funds that would otherwise go to Missouri schools.
Still, Kehoe is entitled to the benefit of the doubt. Even if the industry thinks it was buying his acquiescence — as it has done with so many others — there’s nothing to prevent Kehoe now from saying to them, in essence: Thanks for your support, but it doesn’t buy you a pass on state gaming laws. We’ll be enforcing those laws going forward.
Whether he’s willing to do that will say much about what kind of state government he intends to lead.