The Missouri House on Wednesday narrowly approved legislation to create a state-run video lottery system and replace unregulated “gray market” slot machines, passing the bill by a single vote. The measure now heads to the Missouri Senate.

The bill would authorize the Missouri Lottery to license and regulate video lottery terminals in retail locations statewide, the Missouri Independent reported. Licensed machines would be required to return at least 80% of wagers to players as prizes. Roughly one-third of the profits would be directed to state education programs. 

The legislation also imposes a 3% tax on video lottery profits to support local governments and doubles the admission fee casinos pay per patron entering the gaming floor, from $2 to $4.

Earlier this week, House members adopted several amendments, including a provision establishing a $250 annual fee per machine to fund disability services.

If approved by the Senate and signed into law, companies currently operating unregulated machines would have one year to remove them from the market.

“I think this is the right thing to do for our state,” said state Rep. Bill Hardwick, a Republican from Dixon and the bill’s sponsor.

Supporters framed the legislation as a compromise: stronger regulations, centralized oversight, and new tax revenue in exchange for phasing out unregulated machines. The bill also allows local governments to prohibit video lottery terminals within their jurisdictions.

Opponents argued the measure would legitimize companies that profited from operating in legal uncertainty and expand gambling further into everyday retail spaces, even as courts and law enforcement have acted against the machines. 

“Why are we changing our laws to help an industry that thumbed its nose at the State of Missouri?” said state Rep. Dean Van Schoiack, a Republican from Savannah.

Some lawmakers who oppose gambling expansion said regulation may be necessary given enforcement challenges. “I hate these machines with a passion. I don’t like what they do to our communities,” said state Rep. Darin Chappell, a Republican from Rogersville. “But I don’t want them to continue to be gray, which is a misnomer. They’re illegal. But most prosecutors have been unable or unwilling to prosecute the illegal machines.”

Last week, a federal judge ruled in a civil lawsuit that slot machines operated by Wildwood-based Torch Electronics are illegal gambling devices under Missouri law. Separately, Missouri Attorney General Catherine Hanaway filed lawsuits against retail businesses in Dunklin County, alleging they were operating illegal gambling machines.

Hardwick said his legislation would strengthen the attorney general’s enforcement efforts by clarifying state law and granting criminal jurisdiction to pursue violators.

However, the bill’s chances in the Senate remain unclear. On Tuesday, Senate President Pro Tem Cindy O’Laughlin, a Republican from Shelbina, questioned the need for the bill following the federal court ruling. “The federal courts have issued a decision that the machines are illegal,” she wrote. “Why are we not just clearing them out?”