Federal Jury Orders Torch Electronics to Pay $500K in Verdict
UPDATE: A federal jury has just ordered Torch Electronics to pay $500,000 in damages following a landmark judgment in a Missouri gambling case. The jury concluded that the company misled retailers about the legality of its “gray market” gaming machines, marking a significant moment in the ongoing conflict between Torch Electronics and its rival, TNT Amusements.
The verdict, delivered on Monday, October 16, 2023, in St. Louis, has profound implications for the unregulated gaming industry in Missouri. The jury found that Torch’s promotion of its machines as legal “no-chance” games deceived store owners, resulting in lost business for TNT as retailers replaced their arcade-style equipment with Torch’s slot-like devices.
The trial, presided over by Senior US District Judge John Ross, exposed the inner workings of Missouri’s gaming sector. Torch Electronics has maintained that its machines comply with state gambling laws, asserting that players can predict game outcomes using a feature called the “prize viewer.” Owner Steve Miltenberger contended that the machines were designed for entertainment, with predetermined outcomes. However, TNT’s legal team countered that the “prize viewer” was merely a façade, arguing that the devices still rely on luck, making them illegal under state regulations.
Authorities revealed that from 2017 to 2023, approximately $32 million was spent on Torch Electronics games at around 20 locations, generating significant profits for retailers, estimated at $11 million in shared revenue. Notably, unlike regulated casinos, Torch does not contribute taxes that typically support education and state programs. The Missouri Gaming Commission estimates that around 15,000 of Torch’s machines are currently operating across the state, raising concerns about their legality and regulatory oversight.
Political influence has played a role in Torch’s expansion, with reports indicating the company contributed nearly $600,000 this year to political groups linked to lobbyist Steve Tilley, a former House Speaker, and significant donations to support Governor Mike Kehoe.
Following the verdict, Torch Electronics announced plans to appeal, maintaining their position that their machines are compliant with Missouri law. Spokesman Gregg Keller stated that the company remains confident in its legal standing. Meanwhile, TNT’s attorney, Richard Finneran, hailed the jury’s decision as a victory for businesses and consumers misled by Torch’s advertising tactics. Finneran also indicated that further action will be taken to reclaim additional profits from the controversial machines.
This ruling is unprecedented in Missouri, as it marks the first time a jury has classified Torch Electronics’ machines as potentially illegal gambling devices. The decision could have far-reaching consequences for thousands of gas stations and convenience stores that rely on these machines for supplemental income. As this story develops, the focus will be on the implications for the gaming industry and the response from Torch Electronics and its stakeholders.
