Understaffed police forces, reluctant prosecutors, and legal loopholes contribute to the flourishing of “gray market” slot machines across America, four gaming regulators contended.
“Law enforcement is strapped right now. Every department is hurting for bodies,” said Ryan Winfield, special agent with the Arizona Department of Gaming and president of the board of the North American Gaming Regulators Association. “In Arizona, city police departments don’t have the resources, time, or investigative ability to go after those types of things.”
Jennifer LaMont, agent in charge of the Washington State Gambling Commission and immediate past president of NAGRA, said prosecutors often don’t understand gaming investigations or the elements of proving a crime has taken place. “They’re not the sexy crimes, not murder or assault,” she said. “We’ll do the investigations, but often we can’t get the prosecutors to take the cases.”
Jasmine Tompkins, director of external affairs and tribal relations for the Michigan Gaming Control Board, said the legislature is considering a bill to update the legal definition of permissible slot machines to fight the proliferation of gray-market machines.
Michael Golub, deputy attorney general with the New Jersey Division of Gaming Enforcement and NAGRA vice president, said his state has more problems with unregulated online sites than with physical gray-market machines in bars, restaurants, and the like. He said many state laws have “a lot of ambiguity,” advising that lawmakers “clearly define what’s permitted and what’s not, then law enforcement can work with regulators.”
The four spoke July 20 during a roundtable discussion at the National Council of Legislators from Gaming States summer meeting at Rivers Casino Pittsburgh. Steve Geller, NCLGS founder and general counsel, moderated.
A 2023 report from the American Gaming Association estimated that the United States is home to more than 575,000 unregulated gambling machines, reflecting 40 percent of the total nationwide. While regulated machines typically keep about 10 percent of every dollar bet, the AGA said unregulated machines keep 25 percent.
“When you take out one group of (gray-market operators), four more are waiting in the wings,” Winfield said. His office has dealt with international groups operating the machines, with one money seizure amounting to more than $1 million. “There’s definitely a market for it, unfortunately, and money to be made,” he said. “Like anything else, law enforcement is just trying to play catch up and it’s always been reactionary as opposed to proactive.”
Tompkins said Michigan officials have had success in targeting the liquor licenses of businesses offering unregulated machines. When one operator closes an illegal gaming site and another opens a different one in the same spot, the state has pursued legal action against the landlord.
Geller said the Florida Gaming Control Commission, in his home state, has found success by involving the FBI when organized crime is involved in illegal slot operations. “There’s a lot of money involved and (the operators) are actually international organized crime,” he said.
