Torch Electronics Ordered to Pay $500K in Missouri ‘Illegal’ Gray-Market Machines Case

• Jury finds Torch’s “no-chance” games violate Missouri law.
• TNT Amusements wins $500,000 in gray-market games case.
• Verdict may spur crackdown on unregulated video gaming machines.

A federal civil jury in Missouri has ordered gray market games operator Torch Electronics to pay $500,000 to arcade game distributor TNT Amusements after ruling that the former’s games are illegal in the state.

TNT Amusements, which supplies coin-operated arcade machines such as pinball and classic video games, first sued in a Missouri state court in 2019, alleging unfair competition and tortious interference with business relations. The company claimed Torch convinced businesses in Missouri to replace TNT’s games with what were essentially illegal gambling machines. The case was transferred to federal court in 2023.

Wildwood, Mo.-based Torch Electronics has argued that its slot-style machines are legal in Missouri because they use a “no-chance” or “pre-reveal” design. The games let players press a button to see the result of the next spin before betting — a feature the company says eliminates the element of chance that defines gambling under state law.

The machines also cycle through a fixed sequence of outcomes, rather than using a random number generator, which Torch’s lawyers argued further removes the element of chance.

Legal? No Chance

But the jury accepted TNT’s argument that the sheer length of the sequence, and the fact that its starting point is randomized on reboot, rendered it effectively unknowable. And since users typically play through a series of spins rather than just one, in practice, they’re always paying to see what happens in the spin after the next one, which remains unknown.

Evidence presented in court suggested that from 2017 to 2023, players plowed $32 million into around 100 Torch machines placed in just 20 venues, of which 65% was paid out in winnings. The Missouri Gaming Commission reportedly estimates about 15,000 Torch machines operating across the state.

Unlike regulated casino operations, Torch machines are not subject to state reporting or taxation, leaving little public oversight.

‘Disgorgement of Millions’

“We are grateful to the jury for seeing through Torch’s false advertising,” Mark Finneran, an attorney for TNT, said in a statement to The Missouri Independent. “Now that the jury has rendered its verdict, we look forward to seeking an official judgment from the court as to the illegality of the Torch devices.”

Finneran added that TNT will now “seek disgorgement of the millions in profits that Torch has obtained through falsely advertising its devices as ‘no-chance’ games.”

Torch is expected to appeal the decision.