Regulating by Threat Letter and Targeted Enforcement

Missouri Senators, convenience store owners, liquor license holders, and anyone who still thinks government power should stay in the appropriate lane need to pay attention to what is happening right now.

Attorney General Catherine Hanaway has unilaterally decided there is no such thing as a ‘gray market’ for VLT machines. ATC Acting State Supervisor Christin Templeton has connected that same theory to liquor licenses. And somewhere between those two offices, Missouri businesses are being told to unplug, shut down, remove machines, sign renewal papers under oath, and accept the State's interpretation before any Missouri court has decided the question as to their machines, their contracts, their locations, or their facts.

That is not clarity. It is pressure. It is government actors taking Missouri's uncertainty and turning it into a criminal, liquor-license, and financial punishment club and using that club to beat Missouri business owners.

The state authoritarian propaganda line is simple: these machines are illegal, there never was a gray market, and anybody still hosting them is choosing crime over safety. That is a powerful slogan. It makes a good press conference. It also skips the hard part, which is proof.

Chapter 572 is Missouri's criminal gambling chapter. It uses words like gambling, contest of chance, and gambling device. Those words matter. But they do not answer every question in the real world. A claw machine is not a casino slot machine. A ticket-redemption game is not automatically a felony. A sweepstakes-style device, a pre-reveal device, a no-chance device, a video lottery terminal, and a machine sitting in a truck stop are not all magically the same thing because somebody in Jefferson City wants a clean headline.

The question is not whether every machine is legal. Civic Outlaws is not saying that. The Missouri Licensing Advocacy Group (MOLAG) is not saying that. They are questioning who decides, under what standard, using what evidence, and before what consequences.

If the State believes a specific machine at a specific location is an illegal gambling device, then they should have to prove it, or at least have a strong presumption of illegality up front. Something more than a useful slogan. Identify the machine. Identify the manufacturer. Identify the software. Identify the settings. Identify the prize structure. Identify the contract. Identify the legal description of the licensed premises. Put specific machine facts in front of an expert. At least have something, anything, before destroying the lives and livelihoods of Missouri business owners.

That is basic civics. Legislatures write law. The executive branch enforces law. Courts interpret law. That is not a mere technicality, but the difference between legitimate government action and administrative overreach applied by whoever has the badge, the press release, or the circular.

Missouri already has a statute that says this in modern language. RSMo 536.140.3 says courts shall not defer to agency interpretations. Instead, courts shall interpret the meaning and effect of such interpretations de novo. And when doubt remains, the doubt goes toward limiting agency power and maximizing individual liberty. That is not my radio rant. That is Missouri law.

So, when the AG or ATC say their enforcers or licensing agents can look at a machine and treat it as Gambling & Promotional Games of Chance on a checklist, my first question is: says who? Where is the definition? Where is the training? Where is the testing protocol? Where is the expert analysis? Where is the machine-specific ruling? Where is the sub-paragraph in Chapter 311 that turns a liquor license inspector into a criminal gambling-law judge?

ATC is a licensing agency. Its ordinary job is liquor licensing: renewal paperwork, posted licenses, minors, ID checks, premise descriptions, inspections, administrative compliance. That is plenty of power already. But now the same licensing system is being used as a back door into the enforcement of criminal law. ATC does not have to charge a business owner with a crime. It does not have to convict him or her. An ATC agent must decide only that a machine on the premises is questionable, in his or her sole interpretation, and therefore shows poor character or unlawful conduct on the part of the business owner. As a result, the liquor license that keeps the business alive can be revoked or denied.

That is the bootstrap. 'We are not criminally enforcing Chapter 572,' they say. 'We are just enforcing Chapter 572 law through licensing.' Well, if the law is a criminal statute, and if the alleged violation is the reason a license is threatened, you are functionally enforcing criminal law without the criminal-law process.

Missouri courts have warned against this kind of thing. In the Kansas City v. Mary Don line of cases, the rule is that a court of equity generally will not permit itself to be used as a medium for enforcing criminal law or quasi-criminal ordinances. There are reasons for that. Civil courts are not supposed to become shortcut prosecutors. If even courts are limited in using equity to enforce criminal law, how does an ATC licensing agent get more power than the court?

That question should make every legislator sit up straight.

Let’s take a serious look at how this drama has become the weapon of the month for Hanaway and Templeton. TNT Amusements sued Torch Electronics in federal court. TNT is a video gaming company. Torch is a major player in the newer device market. Federal Judge John A. Ross recently entered a declaratory judgment saying that the Torch devices examined in that case were illegal gambling devices under Missouri law when operated outside a licensed casino.

But do not let anyone sand the edges off that sentence. TNT versus Torch was a civil case that involves very specific Torch devices. The court had a long record, jury findings, expert evidence, post-trial briefing, and a very particular procedural history. Judge Ross had previously declined to wade into Missouri criminal law, then later vacated that posture and entered the declaration. Torch sought interlocutory appeal certification. Judge Ross denied that certification, and ATC's own advisory acknowledges that Torch may yet appeal.

So, the ruling is nowhere near the statewide criminal verdict against every non-Torch machine in Missouri that Hanaway and company are portraying it as.

Nevertheless, Hanaway's office has treated the moment like a declaration of war. The Attorney General's Office announced that Torch would suspend its operations and opined that the agreement showed that there never had been a gray market. Her office then promised continuing enforcement against other operators, manufacturers, and retail stores. In March, Hanaway announced two felony counts and a civil action against a Greene County convenience store operator. In May, her office announced a four-county sting, 35 devices seized, nearly $60,000 in funds seized, 21 felony counts, and five misdemeanor counts. The Attorney General's own releases remind the public that charges are allegations and defendants are presumed innocent. That reminder matters, because the public rhetoric often sounds like the verdict already happened.

Here is the equal-treatment problem. Torch makes a deal. Torch machines stop operating, but at least one location I personally saw while traveling still had Torch machines sitting there with signage saying an agreement allows them to stay in place while the legislature decides the next move. Meanwhile, non-Torch operators and smaller locations are getting threat letters, seizures, and criminal pressure. If the only machines actually declared illegal in the federal order were Torch machines, why are non-Torch machines being treated like proven contraband while Torch machines can sit under an agreement?

That is the kind of fact pattern Senators should not wave away. Equal treatment is not a courtesy the State extends when it feels generous. It is the basic promise that government does not get to pick winners and losers by leverage, publicity value, size of law firm, or how unpopular the target looks on television. When government discretion is this broad, the people with the least political protection are the first to get crushed.

If there is a deal, show us the deal. If there are different deals for different actors, explain the legal standard. If a major operator can get a standstill, wind-down, non-prosecution, or resolution path, why does the small minority-owned, immigrant-owned, or family-owned convenience store get felony charges, seized machines, and the threat of losing its reputation, liquor license and money?

And do not pretend that liquor is a side issue. For many of these locations, the liquor license is not decorative paperwork hanging behind the counter. It is part of the economic engine of the store. Lose it, and the store will lose customers, revenue, employees, supplier relationships, financing stability, and resale value. A licensing threat can do what a criminal conviction would do, but faster and with less proof. That is why ATC's involvement matters so much.

Do not misunderstand this point. I have nothing against Torch. Torch tried to get Missouri courts to answer this question years ago. Torch has lawyers. Torch has resources. Torch made the move it thought was right. The problem is not that Torch is trying to survive. The problem is that the State appears to be treating Torch as a negotiating partner and other operators as scalps to collect and parade publicly.

The AG's recent releases show the escalation. February brought civil suits against retail shops. March brought felony counts and a civil action against a Greene County convenience store operator. May brought a four-county sting, seized devices, seized funds, 21 felony counts, and five misdemeanor counts. The releases say these are allegations and that defendants are presumed innocent. Good. That sentence should be repeated every time the State uses the word illegal in a press release before trial.

That is how selective enforcement works. You pick the targets that will not get sympathy. You hit the immigrant-owned convenience store. You hit the small operator. You scare the middle of the market. You do not start by storming every fraternal hall, every veterans organization, every politically sensitive location with similar machines in the back room. You do not want that headline. So, you call it public safety and move against the people least able to fight back.

Senators should be embarrassed that this is happening on their watch. This issue has been around for years. I target the Senate here because for the last two years, the House has passed bills to make the machines legal, define them, regulate them and tax them – only to have the Senate (and Senator Cindy O’Laughlin in particular) refuse to act or kill the bill. Meanwhile, the state has debated VLT games, gray machines, amusement devices, criminalization bills, tax frameworks, enforcement funds, casino interests, lottery interests, local interests, and every other flavor of Jefferson City paralysis. And while the Senate refuses to act, the executive branch expands its authority on its own.

That is not just bad policy. It is an abdication. Every year the Senate refuses to draw the line, somebody else will draw it for them. The Attorney General will draw it with a demand letter. ATC will draw it with a circular. A licensing agent will draw it on an inspection report. A prosecutor will draw it with a criminal charge. A small business will then pay for that line with legal fees, lost revenue, sleepless nights, and maybe the end of the business.

That is backward. If the Senate wants these machines gone, write a clear law and own the vote. If the Senate wants them regulated, taxed, capped, age-gated, and licensed, write that law and own the vote. If the Senate wants to protect veterans halls, fraternal organizations, convenience stores, and small operators differently, write those distinctions in public and defend them. But do not leave the language muddy and then let Hanaway and Templeton turn the mud into a public wrestling match.

The easiest political move is to pretend this is about whether someone personally likes gambling, but that dodge is beneath the moment. Missouri already allows gambling. Missouri allows casinos. Missouri now allows broad forms of legal gaming and sports-related wagering. People spend money on entertainment, gambling and gaming every day, and the State rarely minds so long as it gets a cut. The real question is whether government can keep one part of the market favored and another part hunted while the law remains too vague for ordinary business owners to know where the line is drawn.

The June 30 liquor license deadline makes this problem even worse. ATC has moved renewal into the online ALCMS system and requires a notarized attestation for renewal applications. License holders are being asked to swear that their renewal information is true in an environment where ATC has already tied the Torch ruling to license impact. That is not just paperwork. That is a pressure point.

Picture the owner of a convenience store that has had machines in place for years. The owner is probably not a lawyer. The owner may be a first-generation business owner. The owner may hold a liquor license that is the difference between survival and closure. The owner is told the license expires June 30. The owner is told to sign renewal paperwork under oath. The owner has seen AG press releases about felony charges and seizures. The owner has seen ATC tell licensees to consult counsel about machine issues. The owner has no statewide court ruling on that specific machine. What is the owner supposed to do?

That confusion is not due process. Instead, it is submission by deadline.

The on-site agent problem is just as bad. A licensing agent walks in. Maybe announced, maybe undercover, because ATC has already shown an appetite for undercover-style work in licensing contexts. The agent sees a machine he or she can question. Does the agent know the software? The reveal function? The payout structure? Whether chance controls the outcome in any material degree? Whether the device is materially the same as the Torch devices? Whether the contract or settings change the analysis? Or does the agent check a box and move on, leaving the business owner to spend months or years fighting to get back what was taken in a minute?

That is not regulation. That is government by checklist.

Hanaway is not the court. Templeton is not the court. A press release is not a conviction. A demand letter is not a statute. And a federal civil competitor case about Torch devices is not a statewide criminal code enacted against every convenience store in Missouri.

Civic Outlaws is not asking Senators to love gambling. We are asking them to do their jobs. Stop hiding behind executive enforcement. Stop letting agencies make policy by threat. Stop pretending that uncertainty becomes certainty because the AG says so. If this industry is illegal, define it and prove it. If it is legal, regulate it. If it sits somewhere in between, then define the line.

Until then, Missouri businesses deserve equal treatment, real notice, court interpretation, and due process before criminal charges, license loss, machine seizures, layoffs, bankruptcy, and public branding as criminals.

Convenience store owners and liquor license holders should not stand alone. Document every contact. Keep every letter. Photograph every machine and sign. Save every contract. Know who came in, what agency they claimed to represent, what they asked for, and what they threatened. Talk to counsel before making admissions. Log your emergency case or concern at https://www.molag.org/contact-8

And if you are a Senator - quit waiting for the next AG press conference to define your state.

Sources and Documents Worth Reading

·         Missouri Attorney General, Torch Electronics Agrees To Suspend All Operations To Avoid Prosecution: https://ago.mo.gov/torch-electronics-agrees-to-suspend-all-operations-to-avoid-prosecution/

·         Missouri Attorney General, Felony Charges Against Greene County Business Owner: https://ago.mo.gov/attorney-general-hanaway-files-felony-charges-against-greene-county-business-owner-for-illegal-gaming-devices/

·         Missouri Attorney General, Four-County Illegal Gaming Sting Operation: https://ago.mo.gov/attorney-general-missouri-state-highway-patrol-announce-successful-illegal-gaming-sting-operation/

·         Missouri ATC Public Advisory 26-02, Renewal Application Period: https://atc.dps.mo.gov/IndustryCircular/circular-26-02.pdf

·         Missouri ATC Public Advisory 26-03, No Chance Gaming Devices or Gray Machines: https://atc.dps.mo.gov/IndustryCircular/circular-26-03.pdf

·         Missouri ATC Attestation for Renewal Applications: https://atc.dps.mo.gov/documents/forms/MO_829-A0153.pdf

·         Torch Electronics, LLC v. Missouri Department of Public Safety, 694 S.W.3d 548: https://law.justia.com/cases/missouri/court-of-appeals/2024/wd86610.html

·         City of Kansas City v. Mary Don Co., 606 S.W.2d 411: https://law.justia.com/cases/missouri/court-of-appeals/1980/wd31192-2.html

·         TNT Amusements, Inc. v. Torch Electronics, LLC, Feb. 13, 2026 order: https://cases.justia.com/federal/district-courts/missouri/moedce/4%3A2023cv00330/201750/437/0.pdf?ts=1771069951

About the Author - Samuel Trapp is a founding member of Civic Outlaws, MOLAG and Modern Law Ecosystem, initiatives focused on exposing administrative overreach, defending civil liberties, and restoring statutory limits on government power. He is also the host of the weekly Lake of the Ozarks radio program Civic Outlaws (listen live from 730a – 845a at damradio.com/live), where he examines legal, political, and international developments through the lens of constitutional accountability and institutional restraint. A longtime critic of unchecked administrative authority, Trapp writes and speaks frequently on government creep across regulatory, licensing, and professional discipline systems.

This article is public commentary and analysis, not legal advice.