Missouri judge dumps gambling company's suit against state
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JEFFERSON CITY — A Cole County judge moved to dismiss a lawsuit by one of the state’s largest purveyors of unregulated slot machines Monday, one day before the closely watched case was set to go to trial.
Cole County Judge Daniel Green said Torch Electronics cannot go forward with its case against the Missouri State Highway Patrol. Through the suit, the Wildwood-based company had sought to insulate itself from future police investigations and prosecutions of its operations.
Future decisions on whether Torch’s operation is legal should be determined in a criminal case, not via a civil lawsuit.
Green credited Scott Pool, an attorney hired to represent taxpayers, for arguing that Torch’s two-year-old lawsuit should be dumped.
“I think Mr. Pool is right on the law,” Green said.
The decision left at least two sides unhappy.
Torch attorney Charles Hatfield said the company will appeal. Mike Winter, executive director of the Missouri Gaming Association, which represents the state’s riverboat casinos, said the dismissal means the thousands of unregulated machines can remain in operation.
“This allows for the continued use of the machines. We disagree with that,” Winter said.
The lawsuit pits Wildwood-based Torch Electronics and Warrenton Oil Co. against the highway patrol in a dispute over whether thousands of slot machines placed in retail establishments across the state are illegal.
If nothing else, the decision to terminate the case will give companies like Torch more time to install more of the machines in gas stations, bars and truck stops while appeals are heard.
Torch sued the state in 2021 arguing that the Missouri State Highway Patrol was conducting a campaign of “harassment and intimidation” against the company, which claims its machines are legal.
The companies wanted Green to declare the games are legal and order the patrol to stop its investigations.
Torch argues that its machines are for amusement purposes, even though players can win money from them. It said the seizure of its machines by police has caused “irreparable injury” to its business.
By contrast, the state says the company is trying to insulate itself from prosecution.
“This lawsuit seeks to interfere, circumvent and prohibit (police), county prosecutors and judges from performing their constitutional and statutory duties if the subject matter involves Torch,” Pool wrote.
The case has political implications.
In April, attorneys working for Missouri Attorney General Andrew Bailey withdrew from the lawsuit citing a conflict of interest after the Republican accepted campaign contributions from political action committees linked to Torch’s lobbyist, former Missouri House Speaker Steve Tilley.
That resulted in the state having to hire outside counsel to take over the case more than two years after the lawsuit was filed. Pool, a Jefferson City attorney, made his first appearance in the case April 19.
Attorneys for Torch won a delay after Pool introduced additional briefings and filings earlier this summer.
In addition to the legal fight, Tilley’s lobbying firm has been involved in a legislative battle in the Republican-controlled Legislature where he formerly served.
Amid lobbying by Tilley’s team, lawmakers have been unable to pass a law regulating and taxing video lottery machines for years.
Torch, meanwhile, had sought to remove the organization representing the state’s riverboat casinos from their role in the case.
The gaming association intervened in the case arguing the machines are cutting into the revenue of the boats, which are licensed and regulated and taxed by the state.
“As legal licensed operators, the members of the MGA have a protectable interest in deterring illegal, illegitimate competition,” attorney Marc Ellinger wrote.
The case could have shed light on how the unregulated gaming industry has spread throughout the state. Depositions on file include one from Torch owner Steve Miltenberger, who outlined how money from the machines is collected by Torch auditors and distributed to businesses where the machines are located.
In the deposition, Miltenberger also discusses companies that supply Torch with the machines and software, including Banilla Games and Grover Gaming.
