City Beat: Council considers bill to curb cash-prize gaming machines

Dan Shaul: Regulating entertainment devices could be start of a slippery slope.

Ken McClure: Regulation of gaming machines is needed to protect public health.

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Springfield City Council is taking aim at gaming machines in an ordinance introduced at its Jan. 22 meeting.

The ordinance would add a section to the city code to ban what it refers to as entertainment devices offering monetary prizes. Commonly known as video lottery terminals, the machines – often found in gas stations, fraternal halls, smoke shops and gaming rooms – allow customers to place bets on electronic outcomes.

Council plans to vote on the proposed ordinance Feb. 12.

Missouri law allows unregulated gaming devices known as pre-reveal or no-chance machines that its proponents say do not meet the legal definition of gambling. Across the country, some states and localities have attempted to ban pre-reveal machines, which the Florida legislature defines as those in which the player must press a preview button before they can play. “The preview button displays the outcome of the next game but not the game after that,” the Sunshine State legislative record states. 

Council is not entering into the fray about whether the machines constitute games of chance or gambling. Rather, the ordinance proposed by members Monica Horton and Matt Simpson would eliminate monetary prizes. 

The new code language would state the following: “No person shall maintain or offer for use by any person any entertainment device that offers a monetary prize to any person regardless of the frequency with which a monetary prize is conferred or the odds of any individual user realizing a monetary prize.”

The proposed code language defines “entertainment device” as any device operating for the entertainment or amusement of the operator, whether or not manipulated by the operator, and it includes any video game or electronic game, regardless of the rules of play.

It also defines monetary prize as any prize in the form of cash, check, bank transfer, negotiable instrument, store credit, gift card, or a ticket or item redeemable for any of those instruments.

Focus on money
Springfield Chief Litigator Christopher Hoeman said the bill is a response to numerous complaints by community members about the machines.

“It does not regulate or prohibit any specific format of game play,” he said. “The focus of this particular bill is on the format of the prizes – so any prizes that pay out the monetary format or can easily be converted into monetary format would be prohibited if this bill were to be adopted by council.”

Hoeman said the bill contains penalty provisions with minimum fines that increase as people reoffend and mandatory jail sentences for subsequent offenses, as requested by Simpson.

“Those were included at the request of one sponsor in particular, the concern there being to kind of overcome any profit motives to continue to operate the machines illegally,” he said.

Hoeman said the reason the bill focuses on the format of prizes rather than game play is to avoid any potential overlap with state gambling law.

“Any format of game as far as the rules for the player, if this bill passes, you would still be able to run those games,” he said. “What you would be limited in is the format of the prizes you could offer to players of those games.”

Simpson clarified that the penalties are tied to each machine, so where there are multiple machines being operated, each would constitute its own violation. Hoeman said for those running multiple machines, each sentence would run consecutively to all other sentences for violations of the same ordinance.

The bill calls for the first offense to carry a fine of $500-$1,000 and up to 180 days in jail – penalties meant to act as a deterrent, according to Hoeman. Otherwise, with lower penalties, such as a small fee, business owners may consider the punishment to be worth the risk.

Mixed opinions
A vigorous public comment period followed the introduction of the bill, with around a dozen speakers representing neighborhoods, mental health and recovery organizations, convenience stores and a veteran organization.

Dan Shaul, director of the Missouri Grocers Association and a former state representative, spoke on behalf of his organization, which has several hundred members.

“We understand you have a problem,” he said. “We want to be part of that solution.”

He cautioned against unintended effects, like moving the problem outside of the city or hurting fraternal and veteran organizations and small businesses.

“Today, one of our concerns is if we ban entertainment devices, what could be tomorrow? Let’s be careful in that slope,” he said.

He added that his organization’s members want to make sure they can sell everything they can possibly sell and not be limited by local government.

Adam Naegler, general manager of Fast N’ Friendly convenience stories, also addressed council, noting his family’s stores have been in town since 1985.

He said their stores have not seen an increase in crime after adding the machines. Instead, he pointed to gaming rooms as a problem, citing in particular Lucky 7, located at the Plaza Shopping Center at Glenstone Avenue and Sunshine Street. Three speakers with other businesses in the shopping center spoke out against the establishment at the meeting.

“I think it sounds like those are where the bad players are congregating, and I think that’s where the focus needs to be,” Naegler said.

He added that the machines are a nice source of income for some of his stores that are on the edge of success or failure, and that without them, some staff may have to be cut or a location may have to close. Ten of the 13 Fast N’ Friendly locations are located in Springfield, according to the company’s website.

He added that he wants to work with the city to find something that is best for the economy and for safety.

The Missouri Independent reports that $2.3 billion is being spent on the gaming machines annually in the state. It’s a figure the publication arrived at from potential tax revenue estimates included in a bill filed in the Missouri legislature that would outlaw the machines.

In a statement, Mayor Ken McClure said the machines can result in detrimental impacts to players, including financial hardships and increased reliance on public assistance.

“Regulation is necessary for the protection of the public health, safety and welfare of our community,” he said.

Other action items

• Council postponed until Feb. 26 acting on a measure that would allow it to modify conditional use permits without review by the Planning & Zoning Commission. McClure said a revision to the legislation would allow the commission to provide input on council-generated changes before council accepts or rejects them. Simpson said he would still like council to be able to correct simple errors without further review.
• Funding from the city’s American Rescue Plan Act allocation was approved for two congregate shelters for people who are homeless, with $1.8 million awarded to The Salvation Army and $29,000 awarded to Women’s Medical Respite. Following a recommendation by its ARPA committee, council intends to award additional funds to Council of Churches of the Ozarks Inc. at a future meeting.
• A Type 2 short-term rental was approved at 415 E. Division St. by an 8-1 vote with Councilmember Craig Hosmer offering the dissenting vote. There are 299 permitted short-term rentals in the city, according to staff, and 196 of them are Type 2, with owners not residing on the premises. Picking up on a criticism he has offered previously, Hosmer said he would like to see something done about those operating without a permit, and Councilmember Abe McGull agreed, citing missed revenue from the lodging tax.
• Council will vote Feb. 12 on two rezoning measures: a 0.11-acre parcel at 1530 N. Broadway Ave., to residential townhouse from highway commercial, and 1.26 acres at 221-227 E. Sunshine St., to general retail from office.
• A resolution honoring retiring Springfield-Greene County Park Board Director Bob Belote was read. Belote’s leadership included two-time accreditation for the parks from the Commission for Accreditation of Park and Recreation Agencies, ranking it among the top 2% of parks in the nation, according to the resolution. Belote thanked the council, noting, “I’m just going to manage a little less, recreate a little more.”