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Missouri state treasurer removes ads on unregulated slot machines after grilling by lawmakers

State Rep. Scott Cupps, chairman of the House Subcommittee on Appropriations – General Administration, makes a point to State Treasurer Vivek Malek during a hearing Tuesday on Unclaimed Property decals on Torch Electronics machines while staff member and State Rep. Maggie Nurrenbern, far right, listen (Rudi Keller/Missouri Independent).
State Rep. Scott Cupps, chairman of the House Subcommittee on Appropriations – General Administration, makes a point to State Treasurer Vivek Malek during a hearing Tuesday on Unclaimed Property decals on Torch Electronics machines while staff member and State Rep. Maggie Nurrenbern, far right, listen (Rudi Keller/Missouri Independent).

At a hearing Tuesday, Treasurer Vivek Malek said the idea to place ads on machines owned by Torch Electronics stems from a meeting he had in a Chesterfield airplane hangar owned by the company's lobbyist.

State Treasurer Vivek Malek endured a bipartisan beatdown Tuesday as members of a House subcommittee spent two hours telling him it was a big mistake to put decals advertising the Unclaimed Property program on unregulated gambling machines.

A few hours later, Malek gave in to demands from members of the House Subcommittee on Appropriations – General Administration and removed the ads from machines owned by Torch Electronics.

“I have today revoked permission for Torch Electronics to display Unclaimed Property messages on their devices, and I have asked Torch Electronics to immediately begin the process of removing any reference to the Unclaimed Property Program from Torch’s devices,” Malek wrote to Republican state Rep. Scott Cupps of Shell Knob, the subcommittee chairman.

Malek was absent last week when Cupps first sought answers on how the decals turned up on slot machines owned by Torch. During Tuesday’s hearing, Malek was told repeatedly that he had made a mistake by agreeing to place the ads.

“This might just be the most egregious thing done during my time in office by a statewide elected official,” said state Rep. Maggie Nurrenbern, a Kansas City Democrat.

Cupps was not pleased with the answers received during the hearing.

“Your legacy will go down as making a mockery of the state treasurer’s office,” Cupps said near the end of the hearing.

Throughout, Malek sought to assure lawmakers that his only goal was to expand the places where he is getting out the message that the state is holding more than $1 billion in funds collected from financial institutions, businesses, government agencies, and other organizations unable to locate a person owed money or property.

The legality of the Torch games is not certain, Malek said, and he wasn’t going to judge how Missourians conduct business or spend their money.

“I am the state treasurer,” Malek said. “I am not the state pastor. Missourians have the right to spend their money on their own.”

Torch is the largest purveyor of the games offering cash prizes that have proliferated in Missouri convenience stores, truck stops and other locations since 2018. The company has been sued, charged criminally with promoting gambling and even sued the Missouri State Highway Patrol to block enforcement actions, but no final court decision on the legality of Torch’s machines has come from any court.

The company has also spent heavily on lobbying to prevent any legislative action to define its games as illegal and donated more than $1 million since 2018 to politicians in both political parties.

In his testimony Tuesday, Malek said the state has not paid Torch to place the decals and did not pay for production of the decals. The idea to use Torch machines for the ads, Malek said, stems from an August meeting he had in a Chesterfield airplane hangar owned by Torch lobbyist Steve Tilley.

Tilley set up the meeting where Malek met Steve Miltenberger, owner of Torch, and two other Torch lobbyists. After some chit-chat, Malek said one of his top priorities as treasurer was to increase the amount of money being returned, and he would appreciate any help.

“They expressed that they had a lot of machines located in high traffic areas such as convenience stores and gas stations,” Malek said.

Malek said he described discussions he was having with the Missouri Bankers Association about decals being prepared for placement on automatic teller machines.

“I suggested maybe the same decal would work for them,” Malek said. “They liked it and we verbally agreed to follow up in early October.”

Malek, who took office in January 2023 after his appointment by Gov. Mike Parson, is seeking election to a full term this year. He faces Republican primary challenges from House Budget Committee Chairman Cody Smith of Carthage, state Sen. Andrew Koenig of Manchester and attorney Lori Rook of Springfield.

Cupps is supporting Smith.

During questioning, Cupps suggested that the August meeting was about more than unclaimed property. He questioned Malek if any discussion of political support occurred.

“I fully believe that there was a deal made,” Cupps said during the hearing. “I didn’t know that it was made in an airplane hangar.”

Malek denied that any political discussions took place.

Much of the committee’s time was spent on whether Malek should have appeared at last week’s hearing. Cupps sent the request to Malek on Feb. 19 and was told on Feb. 20 he would not come to the next day’s hearing.

He had committed to testify on a bill important to his office, Malek said, and had appointments throughout the day. He did, at that time, offer to meet in person with Cupps.

That explanation, however, upset Cupps.

“When you say that you are given short notice, that’s a lie,” Cupps said. “For you to say that you were not given a chance to say when you could meet, that’s a lie.”

 State Treasurer Vivek Malek testifies Tuesday on the placement of Unclaimed Property decals on Torch Electronics games (Rudi Keller/Missouri Independent).In a letter sent to Cupps last week, Malek criticized him for the amount of time between Cupps discovering the decals and raising questions about them. Documents provided to the committee Tuesday show the treasurer’s office has been anticipating questions about the decals since early January.

On Jan. 5, Malek’s chief of staff Ray Bozarth sent Brittany Robbins, a registered lobbyist for Torch, a statement for release if any reporters asked about the decals.

“The Missouri State Treasurer’s Office is currently in custody of roughly $1.2 billion in unclaimed property,” the statement read. “The Treasurer’s Office is happy to work with small business owners to help raise awareness for Missouri’s unclaimed property, so that more folks can get their money back.”

The statement is identical to one sent to The Independent on Wednesday. The only change was an additional sentence: “Promotions for Unclaimed Property at retail outlets cost the state nothing.”

Other records provided to the committee detail the work done to create a poster for the Unclaimed Property program to be placed in state license offices. During his testimony, Malek tried to use that to show he is using every possible idea to increase traffic to the program’s website.

Members, however, kept bringing the question back to the particular placement on Torch machines.

“I appreciate your bogus rhetoric,” Cupps said. “I appreciate your skill and your ability to come to this committee and deliver it.”

Rep. Kemp Strickler, a Democrat from Lee’s Summit, asked Malek if there are any boundaries for placing Unclaimed Property decals:

“Are there any places where we won’t put those stickers?” Strickler asked. “Strip clubs? Porn magazines?”

Malek replied: “I don’t know we would have the focus of attention at those locations for these stickers.”

At the end of the hearing, Cupps asked Malek to promise to have the stickers removed from the Torch games. Malek declined at that time, before relenting several hours later.

“I will have to deliberate on that issue before I make a decision,” Malek said after the hearing. “I do not have an answer at this point.”