Courts split on legality of gas station slot machines

WISCONSIN (CBS 58) -- Slot machines are illegal in Wisconsin, except at tribal casinos.

Yet some gas stations are offering people the chance to play what look like slot machines, next to the chips and beer.

The state says the machines are illegal, but the courts have split on whether these gas station casinos are actually breaking the law.

Take a drive through town and stop in a convenience store for a tank of gas or a pop.

Chances are you might come across a row of what look like slot machines.

They take your money, spin the wheels and if you win, pay cash.

In a roughly three-mile area around CBS 58, we found seven out of 25 gas stations offering these games to the public. That's 28%.

"We have seen increasing numbers of gambling machines, and my concern is I'm not sure if vendors are not being straightforward about what's happened in other states," said Dana Erlandsen, chief counsel, Wisconsin Department of Revenue.

Erlandsen is the chief lawyer for Wisconsin's revenue department . She says illegal gambling machines pose big risks to the people that play them.

"There's no monitoring to see that these machines pay out fairly," she said.

In courtrooms, though, the companies providing the machines say they're not gambling. Instead, some argue they're offering people a game they can play without taking a chance.

"Ours have a prize viewer, so if you touch it, it shows you that if you bet, put in a dollar, play this cycle, you will win zero."

Distributor Jeremy Hahn showed us a video he took as part of a legal challenge he filed. He has 50 machines across the area. The state ordered three of them removed from a Milwaukee gas station in January. He challenged the removal, saying they're not illegal.

"Now it's going to say our prize for consideration of a dollar is one dollar, let's see if that's true. There, we've won a dollar. So the prize viewer eliminates the element of chance," Hahn said. 

A Racine County judge agreed with a similar challenge from another company last October. The judge ruled the machines give players the ability to see the outcome of their bet before making it. That removes the element of chance, and the judge says it makes them legal under the law. The state has appealed the case.

It's pure baloney, but it has been tied up in the courts over and over again," said Marcus Prater, executive director of Gaming Equipment Manufacturers.

Prater leads the Association of Gaming Equipment Manufacturers, the companies that make heavily-regulated slot machines like you'd find in a casino. He says real slot machines are tested to ensure they work right, pay right and don't cheat the player.

Prater says these slot machine look-alikes in gas stations don't go through that same scrutiny.

"These unregulated machines, who knows what the software is doing inside those machines. I guarantee you the players are losing a lot of money because they're getting fooled into thinking they're getting a fair chance," he said.

Prater says some states have struggled to gain control of these machines. That's why manufacturers, distributors and lobbyists are watching Wisconsin's appellate court closely. Its ruling could set up another showdown in the state Supreme Court or allow these machines to flood Wisconsin. That worries anti-gambling activists. 

"People are buying hope for a dollar," said Citizens Against Expanded Gambling Executive Director Lorri Pickens. "That's how they look at the ability to change their financial circumstances."

Pickens says in one sense, Wisconsin has already lost. She says these machines were able to sneak into the state because gambling has become normalized.

"It just becomes something people don't oppose or think twice about because it's everywhere," she said.

The appellate court is expected to issue a ruling this fall.