ST. LOUIS — A federal jury on Monday took up a question Missouri lawmakers and prosecutors have sidestepped for years: whether the unregulated and untaxed slot machines that have flooded gas stations, convenience stores and bars across Missouri are illegal gambling devices.
The trial in federal court in St. Louis pits TNT Amusements, which supplies billiards, darts and other bar games to entertainment venues in the state, against Wildwood-based Torch Electronics, a politically-connected Missouri heavyweight in the so-called “no-chance” game industry. TNT, owned by Jim Turntine, filed the suit against Torch, owner Steven Miltenberger and his wife, Torch employee Sondra Miltenberger, in March 2023.
Steven Miltenberger, who previously worked for a slot machine company in Illinois — where slot machines outside of casinos are taxed and regulated — launched Torch around 10 years ago. Torch games since have proliferated throughout Missouri, angering casino owners and some lawmakers who complain the machines produce no gaming taxes or face regulations ensuring they give players a fair chance to win.
Players can wager and win money from the machines, but Torch has relied on the use of a “preview screen” on its games, which let players know whether the next turn will be a winner, allowing it to claim the machines are not “games of chance” under Missouri gambling statutes.
Meanwhile, Torch employs one of the state’s top lobbying firms, led by former House Speaker Steve Tilley, and has given thousands of dollars in campaign donations. One of the recipients, former Republican Attorney General Andrew Bailey, had to withdraw his office from a case Torch brought to block the Missouri Highway Patrol from enforcing gambling laws.
Amid the lobbying and campaign donations, the GOP-controlled legislature has not passed legislation regulating the machines, and state courts have declined to definitively state whether the machines are legal.
TNT attorney Rich Finneran, who ran unsuccessfully for attorney general as a Democrat in 2020, told the jury in opening statements Monday that they will be asked to decide a simple question: whether Torch’s claims that its machines are not gambling devices are false.
“For years, the defendants have profited by refusing to admit the obvious,” Finneran said.
Lawyers for TNT had a Torch machine rolled into the courtroom Monday for a longtime slot machine industry expert to demonstrate one of the games. Judge John Ross said he will let jurors try the machine during the trial, overruling an objection from Torch’s lawyer.
The expert, Stacy Friedman, testified he examined the code of several of the machines and found they “randomize” prizes to determine winners and that there was no predictable pattern, indicating they are games of chance. He also showed how you can play the games without a preview screen activated.
“In the long run, the house always wins,” Finneran told jurors. “In this case, the house is Steven and Sondra Miltenberger.”
Torch lawyer Todd Graves told jurors they would see evidence showing TNT’s owner Turntine does not like competition and actually “has some very powerful friends.”
Graves is from well-connected Kansas City law firm Graves Garrett, formerly was chair of the Missouri Republican Party, and was appointed U.S. Attorney in Kansas City by former President George W. Bush. Graves is the chair of the University of Missouri System Board of curators, appointed by former Gov. Mike Parson, and his brother is Congressman Sam Graves, a Republican who represents a swath of northern Missouri.
Graves sought to portray Steven Miltenberger and Sullivan-based Torch as “an American success story,” noting he began the company in his garage, and said the lawsuit ultimately came down to a decision about whether the courts should take money from one company and give it to a competitor.
“The devices are legal in Missouri,” Graves said.
That may be for Judge Ross and the jury to decide. While TNT wants the court to declare the machines are illegal gambling devices under Missouri law, Ross initially dismissed the question in March. In an August ruling, however, the judge acknowledged the court has “been reluctant to insert itself into this politically fraught issue,” and said a jury would hear evidence and decide whether the machines are illegal gambling devices.
“The consequences of deference continue to accrue, not only for the parties but also for the industry, the state, and the gaming public,” Ross wrote in August. “The record reflects that TNT has been lobbying against no-chance devices for over a decade. Criminal charges and civil suits have been languishing in state court for five years now.”
Among those watching the proceedings Monday was Hal Goldsmith, a federal prosecutor who leads the St. Louis office of the U.S. Attorney for the Eastern District of Missouri’s white collar and public corruption cases.
The trial is expected to continue through the week.
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Jacob Barker | Post-Dispatch
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