JEFFERSON CITY — A plan to regulate and tax the use of video game lottery machines in some Missouri businesses ran into reservations from senators on the Progress and Development Committee during a hearing Tuesday.

The Video Lottery Control Act, introduced by Sen. Denny Hoskins, R-Warrensburg, would regulate around 14,000 “gray gaming” machines currently running across the state. The machines, called “gray” because they reside in an undetermined area of the law, Hoskins says, are currently “siphoning revenues” from the state while they remain untaxed. The Missourian found several of these machines operating locally last fall.

Proponents of the bill advocate for the revenue it would bring for the state, while many opponents argue the regulation would cause an equal or greater loss of revenue for casinos and give minors access to gambling.

Hoskins said his bill is projected to bring approximately $36 million to the state at the end of the first year, which would be directed to fund education.

“My primary goal in filing this legislation is to raise revenues for Missouri community colleges and universities and elementary and secondary education,” Hoskins said.

He also said the bill would create an estimated 21,000 jobs and an undetermined amount of sales tax revenue from supplies and equipment.

The bill defines permissible locations for the machines as including fraternal or veterans’ organizations, truck stops and convenience stores that have “sold on average ten thousand gallons of fuel each month,” bars, liquor stores and grocery stores, all of which must maintain a liquor license and a license to offer video lottery games through the state Lottery Commission, a five-member body appointed by the governor.

Sen. Kiki Curls, D-Kansas City, raised concerns about the machines being available to minors. Although the bill would require video lottery game players to be 21, Curls says that unlike purchasing alcohol, tobacco or other age-restricted items, the machines wouldn’t require an ID check.

“I am really concerned about it being around kids,” Curls said. “Especially our smaller convenience stores and supermarkets where kids frequent. Some of the convenience stores in my district are largely a lot of neighborhood kids that come in and buy chips and candy or soda ... and I am concerned about the thought of there being a row of slot machines right there in the doorway so that they can be viewed from the counter.”

The bill would require that video lottery machines “shall not be visible from areas normally occupied by minors and shall be placed within the unobstructed line of sight of the sales counter unless placed in an enclosed or partially enclosed area that is continuously monitored by video surveillance.” Curls worries this is not sufficient.

The bill states that a business in violation of the rules could be fined up to $5,000 and a temporary revocation of its video lottery game license. Paul Jenson, an Illinois-based lawyer with clients mostly in the gaming industry, argued businesses are careful to protect machines from minors out of fear they might also lose their liquor licenses.

“I don’t think anyone in the gaming industry ... wants minors playing these games, and they take it very seriously,” Jenson said. “Here, we’re talking about potentially a loss of a liquor license if there are violations.”

Jenson also encouraged senators to consider following Illinois lead and passing legislation that bans unregulated “gray” machines at the same time that it creates a system for regulation.

Sen. Brian Williams, D-St. Louis County, expressed concern over the availability of jobs coming from the regulation of these gaming machines in the form of service and installation technicians and supervisors, and these jobs being not available to people under 21.

“What I’m thinking about now is young people coming out of high school that may not want to go to college having the opportunity to take these jobs,” so we just really, if that’s true, excluded (a group of people) that are not eligible to take these jobs.”

Sen. Eric Burlison, R-Battlefield, along with representatives from numerous Missouri municipalities and businesses, are concerned about the money casinos will lose as a result of regulation being more than the money the state is losing by not taxing the existing machines.

“How much do you think we’re missing out on, versus how much do you think we’re cannibalizing?” Burlison asked.

Hoskins said local governments could opt out of the regulation if the bill is passed, meaning they could elect not to regulate and tax video lottery game machines in their municipalities.

Supervising editor is Mark Horvit.

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