A Real Racket: Combatting Illegal Gambling Machines

By Tres York

Many state legislatures across the country introduced legislation during their 2021 legislative sessions that would strengthen laws designed to combat illegal gambling machines-machines that are not licensed by gaming authorities, not regulated to ensure consumers get a fair shake, and do not provide any tax revenue to state governments.

State legislatures have been looking more closely at these machines to determine if they are truly games of skill, if the law should be clarified to ensure that they are outlawed, or if legalizing, regulating, and obtaining tax revenue from them is a better option.

While most states have enacted laws that outlaw unregulated casino gaming, illegal gaming machines often take advantage of definitional ambiguities in the law by claiming to be games of 'skill,' or owners of the machine just ignore the law completely. Over 4,000 state and tribal regulators oversee the casino gaming industry and have implemented rigorous licensing and testing processes to ensure that consumers have a fair chance to win-none of these safeguards are in place for illegal gaming machines.

Criminal activity such as drug trafficking and money laundering are also often related to the operation of these machines. Major Chuck McNeal of the Louisiana State Police's Gaming Enforcement Division stated that 'unregulated machines are a net negative to public safety in our communities. They often bring other forms of criminal activity to local communities whether drugs, violence, or money laundering. Organized criminal operations profit from the use of these machines and take advantage of unsuspecting consumers. State and local law enforcement must be on the front lines and partner with prosecutors to root out these machines from our communities.'

At NCSL's Base Camp this week, we are excited to explore this topic more in-depth with two speakers who have dealt with the issue directly-John Adams, the district attorney of Berks County, Pa., and Rick Kalm, former executive director of the Michigan Gaming Control Board from 2007-2021. The conversation will take place Thursday at 10:45 a.m. ET. You can register for this and other great Base Camp sessions here.

Tres York is associate legislative director in NCSL's State-Federal Relations Program.

Email Tres