Florida: Legislature considers bills to eliminate and increase penalties for illegal slot machines

January 24, 2024 9:00 PM
Photo: Inside a Florida "arcade", photo courtesy Kristi West via Google Maps
  • Rege Behe, CDC Gaming Reports
January 24, 2024 9:00 PM
  • Rege Behe, CDC Gaming Reports

Illegal slot machines have long been a problem in Florida. In May 2023, the Tampa Bay Times published a story that claimed there were 70 game rooms with the machines in the Tampa area alone, and estimated that there were 1,000 such locations throughout the state.

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New bills were recently introduced in Florida’s legislature to combat illegal slots. SB 1046 and HB 189 were introduced to clarify laws concerning the machines and to increase penalties for their possession and operation.

According to Dan McGinn, a special counsel for the law firm Jones Walker in Tallahassee who represented the state of Florida in a matter preventing the proliferation of gray-market slot machines, the bills are designed to disincentivize proprietors and establishments from owning illegal slot machines while increasing penalties from misdemeanors to felonies. The bills also may incentivize law enforcement agencies to prosecute machine owners he said in an interview with CDC Gaming Reports.

“Those folks, they have limited time and limited other resources,” McGinn says of law enforcement. “If (possession of the machines) are felonies, there are more incentives to take those cases all the way through rather than if they’re just second-degree misdemeanors.”

In Florida, slot machines are only legal at eight pari-mutuel facilities, including Gulfstream Park Racing & Casino in Hallandale and Pompano Park Racing in Pompano Beach, in Miami-Dade and Broward Counties. Properties operated by the Seminole Tribe of Florida can also have slots.

According to Florida Gaming Control Commission Director of External Affairs Eric Carr, illegal slot machines are found at places “operating under deceptive marketing guises such as adult arcades and internet cafes.”

“The repercussions of this clandestine activity extend beyond mere legal infractions,” Carr said via email. “The funds generated from such illegal gaming operations serve as a financial lifeline for violent criminal enterprises, including the drug trade and human trafficking.”

Carr cited recent murders at such establishments in Havana, Gadsen County, and Brentwood, Duval County, as examples of the dangers that come from hosting illegal slot machines and the necessity for legislative remedies. He noted that from August 2022 through September 2023, the Florida Gaming Control Commission recorded 1,561 reports detailing instances of illicit slot machine gambling activities.

“Notably, these reports are location-based, not machine-based,” Carr said.

“This strains law enforcement resources and compromises the safety of Florida’s communities,” Carr added. “As it stands, the penalties for maintaining an illegal gambling house are only classified as a second-degree misdemeanor. In light of the severity of the issue at hand, this proposed bill seeks to elevate the penalty to a more fitting third-degree felony.”

Unlike other states grappling with what constitutes a slot machine or a game of chance, there’s no gray area in Florida. McGinn, who also argued on behalf of interested parties against Florida’s Voter Control of Gambling amendment, says that in 2013, the state amended a statute to define what slot machines are.

“We don’t have the issue that other states do where it’s is there enough skill or any skill,” McGinn says. “What the problem in Florida seems to be, and you can see it in the legislative process, is the lawyers and representatives for the arcade industry kind of treat this as disingenuous. They’re the folks leading the charge of not knowing what a slot machine is.

“First of all, they know. Everybody knows. The default in Florida, even though we’re a gaming state, is that everything is gaming by exception. Slot machines are statutorily prohibited, gambling is statutorily prohibited, lotteries are constitutionally prohibited. So, there’s the Florida lottery that has a constitutional amendment, slot machine gaming is only permissible in Miami Dade and Broward County, by constitutional amendment.”

The American Gaming Association has long championed efforts to rid gaming markets of illegal or gray machines. According to AGA research, Americans wager $109 billion each year with unregulated “skill” machines at an annual cost of $8.7 billion in state taxes and $27 billion in legal gaming revenue.

“Every day, we see more examples of illegal gambling plaguing communities and taking advantage of the most vulnerable,” said AGA President and CEO Bill Miller via email to CDC Gaming Reports. “The AGA supports this legislation, which will give Florida law enforcement needed authority to root out illegal gambling machines and enhance criminal penalties to hold bad actors accountable. Defeating the illegal gambling market is critical to protecting Americans and we encourage states across the country to take similar action.”

McGinn said the passage of SB 1046 and HB 189 would provide clarity for law enforcement and legislators while eliminating what’s increasingly becoming a public menace.

“What’s better for the state of Florida is probably less illegal gambling,” McGinn says. “So, in the sense that this helps to kind of get those locations out of the communities across the state, then that’s a net positive for the state. No one wants the spread of unregulated gambling because then you have all the problems that go with it.”