Missouri Moves to Regulate Gray-Market Gaming Machines

A bill moving through the Missouri House of Representatives aims to phase out controversial “no-chance” gaming machines while introducing a regulated system of video lottery terminals (VLTs). HB970, currently under review by the Emerging Issues committee, seeks to provide legal clarity in a market that has long operated in a gray area.

The bill proposes a gradual transition: existing no-chance machines would be allowed to continue operating temporarily, provided they meet compliance standards, but no new contracts would be permitted after August 28, 2025. Meanwhile, VLTs—subject to strict regulatory oversight—would be phased in as replacements.

Defining the Legal Gray Area

Missouri’s no-chance machines, commonly found in retail locations and convenience stores, operate under a unique premise. Unlike traditional gambling devices that rely on random-number generators, these machines follow a predetermined sequence of outcomes. Players can see the next result before wagering but must pay to reveal subsequent plays, creating an experience that closely resembles gambling.

Manufacturers argue that the absence of randomness exempts these machines from gambling laws. However, state lawmakers, led by Rep. Bill Hardwick, believe this loophole needs to be closed. Hardwick emphasized the need for regulatory certainty, telling the Columbia Missourian, “What we owe all of the businesses in the state of Missouri is regulatory certainty as to what exactly is authorized by the law, what exactly is not authorized by the law.”

Mechanics of the Transition

HB970 seeks to establish VLTs as a new category of gaming machines under the oversight of Missouri’s lottery commission. These machines would need to meet several requirements, including:

• A minimum payout of 80% over their lifetime
• The use of a random number generator to determine outcomes
• No internal mechanisms that alter odds
• A detailed play history accessible to players
• Connection to a centralized computer system approved by the lottery commission

To ensure a smooth transition, existing no-chance machines would remain operational under strict conditions. Operators would need to obtain a $25 permit sticker for each machine and pass independent compliance testing. However, all such machines would be phased out entirely by March 2026.

Missouri’s phased approach contrasts with more immediate crackdowns seen in states like Kentucky. Kentucky Attorney General Russell Coleman recently declared gray-market gaming machines illegal, threatening operators with fines and jail time. “The law is clear—gray machines and other games like them are illegal gambling devices that have no place in Kentucky,” Coleman stated.

By opting for a transitional model, Missouri’s lawmakers may avoid some of the backlash from retailers that depend on these machines for revenue. The question remains whether this compromise will satisfy all stakeholders or if legal challenges will emerge as the bill advances.

What we owe all of the businesses in the state of Missouri is regulatory certainty as to what exactly is authorized by the law, what exactly is not authorized by the law.

Conclusion

HB970 represents Missouri’s latest attempt to bring regulatory clarity to the evolving landscape of gaming. By eliminating legal gray areas and introducing state-supervised alternatives, the bill could serve as a model for other states grappling with similar issues. However, whether Missouri’s measured approach proves more effective than outright bans remains to be seen.