Missouri treasurer fires back at critic of ads on unregulated slot machines

State Treasurer Vivek Malek on Friday accused a southwest Missouri lawmaker of making claims without facts about advertisements for the state Unclaimed Property program on unregulated cash prize games that proliferate around the state.

On Wednesday, State Rep. Scott Cupps, chairman the House Subcommittee on Appropriations – General Administration, excoriated Malek for failing to appear to answer questions about the ads. He said refusing to appear was a “red flag that there’s something nefarious taking place.”

Cupps, a Republican from Shell Knob, said the stickers and other displays make it appear that the state has sanctioned the games.

In a letter sent to Cupps and other members of the subcommittee, Malek said the hearing was called on short notice, he wasn’t told the specific reason for the hearing and that he offered to meet with Cupps in person in the afternoon.

He also said he will be at the subcommittee’s next meeting on Tuesday.

“The State Treasurer’s Office did not spend one penny of taxpayers’ money to pay for Unclaimed Property Program advertising on video gaming machines,” Malek wrote. “The advertising was provided at no charge, using a standard message we use to promote the program. The standard design was provided by my office.”

The slot machine games are operated by Wildwood-based Torch Electronics, which owns thousands of what it calls “no chance gaming” machines that can be found in convenience stores, bars and other locations throughout Missouri. Critics say the games are illegal gambling devices. Torch argues they are legal because players can learn the outcome of a wager before committing their money.

While there are other vendors in the market, Torch is the largest purveyor of the games. The company has been sued, charged criminally with promoting gambling, and it even sued the Missouri State Highway Patrol to block enforcement actions, but no final court decision on the legality of Torch’s machines has come from any court.

The company has also spent heavily on lobbying to prevent any legislative action to define its games as illegal and donated more than $1 million since 2018 to politicians in both political parties.

Malek, who took office last year after being appointed by Gov. Mike Parson, is seeking a full term this year. Neither his campaign committee nor his joint fundraising committee has accepted donations from Torch, its officers or lobbyists or PACs used by Torch to move money to candidates.

Malek acknowledged that controversy but said his actions were intended only to promote the Unclaimed Property Program.

“The courts at some point may finally decide any such questions, so I will not usurp the role of the judicial branch in this regard,” Malek wrote. “If the courts rule the machines must go, I presume they will go, and with them the decals that were not printed at taxpayer expense — decals that in the meantime have hopefully helped connect Missourians with their unclaimed money, which is the intent.”

Torch Electronics games and a redemption kiosk displaying advertisements for the Unclaimed Property Program operated by State Treasurer Vivek Malek.
Torch Electronics games and a redemption kiosk displaying advertisements for the Unclaimed Property Program operated by State Treasurer Vivek Malek.

The Unclaimed Property program currently holds more than $1.2 billion in unclaimed assets, collected from financial institutions, businesses, government agencies, and other organizations unable to locate a person owed money or property. Entities required to turn over assets to Unclaimed Property do so after there has been no document transaction or contact with the owner for five years.

Every state treasurer regularly promotes the program to get the assets returned.

Cupps, in an interview with The Independent Friday afternoon, said Malek doesn’t seem to understand how bad it looks to advertise on the machines. There are hundreds of other ways to promote finding Unclaimed Property without partnering with a company that may not be operating legally.

More: With monetary prize ban, Springfield outlaws video lottery terminals within city limits

“I find it the oddest of all odd choices that have ever been made by a statewide official,” Cupps said.

After Wednesday’s hearing, Gregg Keller, a spokesman for Torch, said Malek’s office approached the company about putting the advertising stickers on their machines. The ads include the state seal, Malek’s name and a QR code to access the Unclaimed Property website. An electronic version is displayed on ticket redemption machines placed near the games.

Cupps said he didn’t think it was helpful to meet one-on-one with Malek.

He said he told Malek that “there’s nothing for you and I to talk about that I don’t think shouldn’t be made known to the public.”

The stickers are placed where other states put official information on legal video lottery games, Cupps said.

“It does not take a rocket scientist to understand what the goal is,” he said. “Those stickers are literally designed to mimic the permit stickers that other states use.”

Malek, in his letter, denied that was the intent.

A sticker promoting the state’s Unclaimed Property Program on a machine owned by Torch Electronics.
A sticker promoting the state’s Unclaimed Property Program on a machine owned by Torch Electronics.

“The promotion is neither a state endorsement of gaming nor a statement regarding the legality of the machines in question,” Malek wrote. “Its standard message is straightforward — reclaim what is yours, as the Unclaimed Property Program puts money into Missourians’ pockets.”

If the legislature wants the games to be banned before the courts have a final say, there is still time to file and pass legislation, Malek wrote.

“Once such a law is in effect, the machines would presumably go, and the decals will go with them — but my robust promotion of returning Missourians their own money will continue,” Malek wrote.

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That sounds simple, Cupps said, but the legislative reality is that action on any gambling issues hasn’t been unsuccessful for several years as video lottery purveyors compete with sports wagering interests and Torch works to defeat everything.

“Torch has done a really good job of making sure that they have friends in the right places,” Cupps said.

Malek closed the letter with a slight jab at Cupps — if he had checked, Cupps and seven other members of the subcommittee would find out they have unclaimed funds. For Cupps, it is $5.35.

“It’s probably a $5 check I threw in the trash,” Cupps said, “because it costs more gas than that to take it to the bank.”

This story was first published at www.missouriindependent.com.

This article originally appeared on Springfield News-Leader: Missouri treasurer responds to accusations about state ads on VLTs