The underground gaming market, seen as a scourge by some and a form of harmless entertainment by others, now finds itself under new scrutiny. Florida’s new gaming commission is targeting “gray” machines.
“Gray,” as in gray area, games exist somewhere between slot machines and arcade games. Florida does not allow online gambling and all retail casinos are operated by Native American tribes in the state.
Over the years, an underground gambling market has emerged. Many states where legal gambling rolled out in some form are addressing the problem of “gray” machines. In even broader terms, degrees of grayness is the basis of all gambling legislation in every state.
Commission is playing catch-up
The five-person Florida Gaming Control Commission (FGCC) was created out of a 2021 statute. It was formed to regulate “all forms of gambling authorized by the state constitution or law,” as described by the Office of Program Policy Analysis and Government Accountability (OPPAGA).
Under the statute, Gov. Ron DeSantis needed to appoint the five-member panel by Jan. 1. His office missed the deadline, appointing just three members before Jan. 1. He selected the other two last month.
The transfer of regulatory powers to the GCC will take place on July 1. After a judge halted legal sports betting, Florida’s “gray” slot machine market has risen to the top of the commission’s agenda.
Court says games of chance are slot machines
The term “gray” also describes the difference between games of skill and chance. But as a 2015 Florida Summary Judgment indicates, the line is really not that gray. In that decision, the court examined games in a Florida establishment.
Players blindly selected falling tiles, then spun a wheel to determine the size of a cash prize. After those two games, the player was tasked with hitting moving ducks on a screen to increase or decrease the size of the prize. The plaintiff argued that skill was involved in the duck-shooting portion of the game.
The court, however, ruled against them. It contended that the first two games, the falling tiles and the spinning wheel, were entirely based on chance. That constituted the game as a slot machine under Florida law. The relevant part of the law was that “any element of chance or unpredictable outcome” that garnered a prize for the player is enough to label a device a slot machine.
Finding the machines has proven difficult
The challenge that’s stymied law enforcement is not in determining the legal status of a game but in finding the actual machines. They can look similar to a slot machine or more like an ATM.
The machines feature numerous varieties of chance- and skill-based games, complicating things further. Florida news organizations have discovered some underground game rooms, but hundreds are believed to exist. Obviously, they don’t advertise.
Finding them takes word of mouth, but even then, what they find isn’t always clear. They could just be mobile games that players sign up for at the establishment and play on their phones. The GCC must now comb the state for them. They also need to educate law enforcement on how to identify the machines.
GCC scrambles to codify response
All five members of the GCC met for the first time on June 8. Commissioners quickly called for Executive Director Louis Trombetta to hire a separate Director of Gaming Enforcement to spearhead the “gray” market regulation. The GCC expects to hire the new director in July.
Commissioner Chuck Drago commented on the seriousness of the job facing the new director.
“It’s going to be a big challenge for us and for the law enforcement director to get out in the state as quickly as possible and let these other law enforcement agencies know that they’ve got this expertise now. Many law enforcement agencies aren’t familiar enough with the ‘gray’ market machines to really understand it and make the cases they need to make.”
How threatening is the ‘gray’ market?
Depending on who you talk to, the seriousness of the underground gaming market varies. Marc Dunbar, a lobbyist for the Seminole Tribe, painted an eerie picture for the GCC.
“We’ve known organized crime, we’ve had shootings, we’ve had actually murders involved in the ‘gray’ market industry in Florida.”
He urged the commission to use their new regulatory authority to step in where previous law enforcement lacked the authority. He reminded members that a vital purpose of the GCC as laid out by OPPAGA was to ensure “state laws are not interpreted to expand gaming.”
This might not be what the city of Jacksonville wants to hear. They have seen a recent boom in underground gaming machines.
Moreover, people who frequent these game rooms don’t see them as seedy or dangerous gambling dens. Instead, they see innocuous places of entertainment that cater to, particularly, the elderly. The games are simple, and the element of skill provides a fun form of low-stakes gambling.
That is not to say the city is onboard with these machines. City Councilman Garrett Dennis, much like Dunbar, acknowledges that “they are a haven for crime.” Unlike Dunbar, though, his solution is “to bring them into the light and regulate them.” To that end, he has proposed legislation that would shut down all but 20 game rooms.
The GCC: A regulatory and political agency
Should the GCC succeed in codifying their agency and educating local law enforcement on how to spot and shut down these machines, they’ll also be shouldering the political burden of opposing legislation like Dennis’s.
That is, until legislation that allows for legalizing sports betting finds its way back onto the ballot, which is not likely to happen in this calendar year. Once that legislation gets redrawn, questions will arise about how hard the GCC will come down on gambling expansion.
Not to mention how much of a monopoly the Seminole Tribe will maintain on gaming in Florida.