Illegal Video Gambling Examined

KENTUCKY – As reported by the Louisville Courier-Journal: "Every day throughout Kentucky and Indian, people enter bars, convenience stores, truck stops and fast-food restaurants and shove their hard-earned money into illegal gambling machines. "And they lose it to the tune of hundreds of millions of dollars a year. "With names such as 'Cherry Master,' 'Pot O' Gold' and Video Redemption,' the games often operate in the 'open with little police enforcement, county prosecution or state interference. "Gary Holland, a Pennsylvania-based consultant who advises authorities on illegal electronic gambling, said the choice for states is to legalize, regulate and tax the games, or enforce the laws now on the books. "…The Courier-Journal spent nine months examining illegal video gambling in Kentucky and Indiana. It reviewed hundreds of records in the two states and interviewed dozens of government and industry officials. "A single trip down the length of Interstate 75 in Kentucky revealed how the problem is both widespread and in plain view. Over two days, a reporter found 137 machines at 19 truck stops, convenience stores and fast-food restaurants located at 15 exits. "At these places, the odds are heavily stacked against players. "…A study by the Indiana Licensed Beverage Association, which is working to have video gambling legalized, estimated that Hoosier gamblers would spend nearly $1 billion annually if even half of the state's bars and restaurants had five of the devices. "…In a September 2003 Bluegrass Poll by The Courier-Journal, nearly 5 percent of the 801 Kentucky respondents said that in the past year they had bet money on a video poker or slot machine at a retail establishment. "…The Courier-Journal analyzed 437 lottery security review forms, which document on-site inspections of lottery equipment at its retail outlets. It found that the 175 retailers involved, in 62 counties, had 518 video gambling machines; 35 had five or more. "In February 2000 the agency sent out a letter to 200 licensed retail establishments where it said security officers had noted potentially illegal machines. The letter reminded them that their license could be revoked for a gambling conviction, something the lottery has done a handful of times. "But random checks by the newspaper of retailers who received letters found some had added machines after receiving the warning. Some had dropped their lottery license but kept the machines. "…The Hoosier Lottery, meanwhile, doesn't track retailers with gambling devices. "…Enforcement in both Kentucky and Indiana has been uneven at best. "…As in Indiana, enforcement in Kentucky often falls to alcoholic-beverage regulators. "…The investigations triggered administrative actions that typically resulted in warnings or fines of $1,250 or less. "…Researchers say they have little information on the people who lose their money in the illegal machines. Lia Nower, a gambling researcher and therapist at the University of Missouri-St. Louis, said she is not aware of any studies on the subject…"