Missouri court rules against Torch Electronics over illegal gambling machines

A federal jury in Missouri has found Torch Electronics liable for violating state gambling laws and engaging in unfair business practices, ordering the company to pay $500,000 to a rival amusement operator it allegedly forced out of dozens of locations.

The verdict, delivered Monday in St. Louis before Senior District Judge John Ross, marks the first court decision addressing whether Torch’s so-called “gray market” slot-style machines breach Missouri gambling laws.

Jurors sided with TNT Amusements Inc. of Sullivan, which claimed Torch misled retailers into replacing its arcade machines with Torch’s unregulated devices. The ruling found Torch made false claims that its “no-chance” games were legal under state law.

“We are grateful to the jury for seeing through Torch’s false advertising,” TNT attorney Richard Finneran said in a statement to The Independent. “Now that the jury has rendered its verdict, we look forward to seeking an official judgment from the court as to the illegality of the Torch devices.”

Torch, which operates an estimated 15,000 machines in convenience stores, fraternal halls, and other venues across Missouri, said it will appeal. “Torch will appeal the verdict,” company spokesman Gregg Keller said.

The company, which began placing its machines in 2017, has relied on lobbyists and political donations to defend its business model. In 2023, then-Attorney General Andrew Bailey withdrew from defending the Missouri State Highway Patrol in a Torch-related case after receiving $26,000 in contributions tied to the company.

So far this year, Torch has donated nearly $600,000 to political action committees controlled by its lobbyist, former Missouri House Speaker Steve Tilley, and $250,000 to American Dream PAC, which backed Gov. Mike Kehoe.

Financial records presented at trial showed players spent about $32 million on Torch games between 2017 and 2023 at 20 locations where TNT also operated. Torch split $11 million with retailers, leaving about 65% of the proceeds for player payouts.

Torch maintains that its devices are legal because players can preview the outcome of each play, eliminating chance. However, the Missouri Gaming Commission has said the random starting point of the games makes them illegal games of chance.

Judge Ross, in a prior ruling, cited evidence suggesting prosecutors’ reluctance to act and legal opinions in Torch’s favor gave the company “plausible deniability,” shielding it from criminal intent.

The jury award compensates TNT for lost business, but Finneran said the company intends to seek “disgorgement of the millions in profits that Torch has obtained through falsely advertising its devices as ‘no-chance’ games.”