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Utah lawmaker, police looking to crack down on ‘fringe’ gambling

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Law enforcement officials in Price seized 14 slot machines and three coin pusher machines from the Castle Country Hobby and Pawn store on Wednesday, May 15, 2019.

Price City Police Department

SALT LAKE CITY — A Utah lawmaker wants to crack down on what she and law enforcement officials say are illegal gaming machines popping up in convenience stores and other shops, often in lower-income neighborhoods.

“What we’re talking about is a cancer in our community. They have been here before and we have fought them before,” said Senate Minority Leader Karen Mayne, D-West Valley City.

Layton City Attorney Gary Crane said there is nothing legitimate about gaming machine businesses. Their only purpose is to take money from people who can least afford it, he said.

Mayne is proposing legislation to close loopholes in state law that she said gaming companies are exploiting. The bill would clarify which types of machines are legal and strengthen laws to ensure compliance with Utah’s prohibition on any type of gambling. It would also increase criminal penalties for machine operators but not users.

The measure would not change laws on bingo, valid promotions and other activities that do not involve a machine.

State lawmakers last year attempted to ban so-called “fringe gambling” by outlawing certain slot machine-like devices showing up in convenience stores. The sweepstakes games function much like slot machines by dispensing tokens or other credits in exchange for cash.

But Mayne said more must be done to curb another wave of gaming machines.

James Russell, an investigators with the Utah Attorney General’s Office, said companies often place the machines in low-income areas and in ethnic markets or independently owned stores. There is no regulation or oversight, he said.

“This is a cash business, so cash trades hands,” he said. “Oftentimes people willing to play in the gray areas of our law are also willing to forgo paying taxes.”

Because it’s such a lucrative business, gaming companies hire attorneys willing to litigate the issue in court for a long time, Russell said.

Nathan Bracken, Kearns Metro Township attorney, said gaming companies typically do not obtain business licenses. They try to comply with the letter of the law but violate the spirit of the law, he said.

“If you’re operating a machine and you’re taking and distributing money and you’re not a valid business, you’re going to be fringe gambling,” Bracken said.

Orem Police Chief Gary Giles said loopholes in the law make it difficult to enforce and prosecute.