AIM opposes bill to legalize video slot machines statewide
- AIM Team
- 1 hour ago
- 4 min read
January 30, 2026 - At a hearing of the House Emerging Issues Committee on Tuesday, Associated Industries of Missouri president and CEO Ray McCarty testified against HB 2979 (Hardwick).
The bill would legalize gambling devices, called "video lottery terminals" or VLTs, and regulate and tax them. Below are the reasons Associated Industries of Missouri is opposed to this bill.
1. The bills authorizing video gambling are unconstitutional. Gambling is prohibited by Art. III, Sec. 39 (9):
"The General Assembly shall not have power:
(9) Except as otherwise provided in section 39(b), section 39(c), section 39(e) or section 39(f) of this article, to authorize lotteries or gift enterprises for any purpose, and shall enact laws to prohibit the sale of lottery or gift enterprise tickets, or tickets in any scheme in the nature of a lottery; except that, nothing in this section shall be so construed as to prevent or prohibit citizens of this state from participating in games or contests of skill or chance where no consideration is required to be given for the privilege or opportunity of participating or for receiving the award or prize and the term ‘lottery or gift enterprise’ shall mean only those games or contests whereby money or something of value is exchanged directly for the ticket or chance to participate in the game or contest. The general assembly may, by law, provide standards and conditions to regulate or guarantee the awarding of prizes provided for in such games or contests under the provision of this subdivision".
Exceptions were granted by voters for only the following:
Bingo – Art. III, Sec. 39(a);
Lottery tickets - Art. III, Sec. 39(b);
Pari-mutuel (horse race) wagering - Art. III, Sec. 39(c);
Riverboat gambling - Art. III, Sec. 39(e);
Raffles and sweepstakes by charitable and religious organizations - Art. III, Sec. 39(f); and,
Sports wagering - Art. III, Sec. 39(g).
There is no exception for video slot machines!!!
2. The General Assembly should not reward illegal activity by acting to make that activity legal after the offender has repeatedly committed the illegal act. By passing legislation now that legitimizes video slot machines that have been installed and used illegally to generate illegal income, the General Assembly is sending a message that criminal activity is okay, as long as you keep doing it until it is so prolific the General Assembly passes a law making your illegal activity legal. One way to address this would be to prohibit anyone currently generating illegal income from these machines from participating in this newly authorized program, and only if the provisions of the bill are approved by voters (with appropriate adjustments to the Missouri Constitution).
3. Video slot machines unfairly compete with legitimate legal games (video games, pinball machines, other arcade games, etc.). Legislation legalizing this illegal activity rewards criminal activity at the expense of companies that have operated and continue to operate within the law.
4. Video slot machines take money out of consumers' pockets that could be used to purchase other goods and services, including items from the stores in which they are located.
5. While current legal gambling in Missouri provides employment opportunities, state and local government revenues that support education, local governments, fraternal organizations, and other uses that benefit the public, these video slot machines currently benefit only the machine owner and the business that places the machine in their establishment.
6. “All state revenues derived from the conduct of all gaming activities,” including state revenues from the newly authorized gambling activity, must be appropriated “solely for the public institutions of elementary, secondary and higher education,” according to Art. III, Sec. 39(d) of the Missouri Constitution. If the legislature would like to appropriate that money elsewhere, this section of the Constitution must be amended.
6. Tax avoidance is enabled by these illegal gaming devices. ALL gambling winnings are taxable income. Missouri state tax statutes currently require withholding of 4% of prizes awarded that exceed $600 and the IRS requires a 24% withholding on winnings over $5,000. There is no practical way to track payouts to gamblers and require federal and state income taxes to be withheld on winnings. The legislation anticipates this loophole and attempts to address it by requiring the maximum prize for a single wager to be one dollar less than the amount that would require withholding of federal taxes and reporting to the IRS, but that does not account for multiple winnings by the same person.
7. Providing adequate security and reasonable enforcement of the law and any regulations/rules would be impossible due to the fact these machines may be located anywhere, as opposed to current gaming which is limited to certain establishments in certain areas. In addition, diverting valuable Missouri State Highway Patrol resources from current duties will only make their job of enforcing traffic laws and assisting the motoring public more difficult.
8. IF the bill advances, it would be much better to place the responsibility of enforcement with the Missouri Gaming Commission rather than the Missouri Lottery Commission. The Gaming Commission is much more experienced with regulating slot machines while the Lottery Commission is more experienced with advertising than enforcement of the stringent regulations that would be necessary to properly regulate the machines and their operators. Establishing a new “Missouri Gaming Bureau” appears to expand government bureaucracy and duplicate effort because Missouri already has the Gaming Commission and the Lottery Commission.
9. A referendum clause should be added to this bill and a separate joint resolution must be filed to address the constitutional prohibition against the legislature enacting this type of legislation. Voters must be given the opportunity to decide if they want these currently illegal gambling devices in Missouri and if they authorize the General Assembly to pass this type of legislation.
The bill is scheduled to be voted upon in the next meeting of the House Emerging Issues Committee on Monday, February 2, 2026, at 4:30 or upon adjournment of the House, whichever is later.