The Torch Electronics lawsuit that ended the company’s Missouri operations was TNT Amusements, Inc. v. Torch Electronics, a federal false-advertising case filed in the Eastern District of Missouri in 2023. A jury sided with TNT in October 2025, and in February 2026 Senior District Judge John Ross declared Torch’s “no-chance” gaming machines illegal gambling devices under Missouri law. That ruling opened the door to a joint state and federal criminal investigation, and on April 10, 2026, Torch suspended operations statewide.
Who Sued Torch and Why
The plaintiff was a small competitor. TNT Amusements, Inc., of Sullivan, Missouri, doing business as Play-Mor Coin-Op, had been leasing traditional arcade equipment (dart machines, pool tables, and the like) to retailers since 1988. Owner Jim Turntine watched his customer base drop from roughly 150 accounts to 94 as retailers swapped his games for Torch’s far more profitable devices, a 35% loss that included accounts he had held for two or three decades.
TNT’s legal theory was narrow. Under the federal Lanham Act and RICO, it argued that Torch had told retailers its machines were legal, that the claim was false, and that TNT had lost business as a direct result. The case did not ask a court to shut Torch down. It asked a jury to decide whether one specific marketing statement was a lie.
The October 2025 Jury Verdict
After a five-day trial before Judge Ross, the jury returned its verdict on October 2, 2025. Jurors were asked to evaluate Torch’s representation to retailers that its devices did “not fit any definition of a ‘gambling device’ in the state of Missouri” and were “not prohibited for use.” The jury found the statement false.
Damages came to $500,000: $125,000 for TNT’s lost profits and $375,000 for injury to the company’s reputation and goodwill. Torch spokesman Gregg Keller said the company would appeal.
Judge Ross’s February 2026 Ruling
The jury award was only part of the outcome. On February 13, 2026, Judge Ross issued a 25-page opinion that reached well beyond damages. He entered a declaratory judgment finding that Torch’s devices “meet the statutory definition of ‘gambling device’ and are therefore illegal under Missouri law when played outside a licensed casino,” citing evidence of “multiple elements of chance” in how the machines operated.
Ross also found the case “exceptional” under the Lanham Act, which entitled TNT to recover attorneys’ fees and litigation costs. He pointed to what he called Torch’s “willful and deliberately false” representations and to the company’s decision to disregard a 2019 Missouri Gaming Commission opinion declaring the devices illegal. Torch’s “good faith” defense, built on a 2017 legal opinion from a Chicago attorney, was rejected. Ross noted the company had been warned repeatedly by law enforcement and regulators in the years since.
On disgorgement, the court found Torch had collected more than $5.5 million from 100 machines in locations where its market overlapped with TNT’s. Ross ruled partial disgorgement was appropriate as a deterrent but declined to order statewide disgorgement, calling that a “lottery-level windfall” for the plaintiff. He directed the parties to submit a plan for additional financial discovery so the final figure could be calculated. As of early 2026, neither the disgorgement amount nor the attorneys’ fee award had been finalized.
The “No-Chance” Defense and the Financial Reality
Torch had marketed its devices as “no-chance gaming” machines, arguing they were legal because of a “pre-reveal” feature: a button that let a player see the outcome of the next spin before placing a bet. If the outcome was known in advance, the company’s lawyers argued, the element of chance required for gambling under Missouri law was missing.
The jury and the court took a different view of how the machines worked in practice. While each device cycled through a fixed sequence of outcomes rather than using a random number generator, that sequence was extremely long, and its starting point was randomized every time the machine was rebooted. Players feeding money into a machine during a continuous session were effectively paying to see the outcome of the spin after the next one, which remained unknown when the bet was placed.
Financial records introduced at trial reinforced the point. At just 20 locations involving roughly 100 machines, consumers spent about $32 million between 2017 and 2023. Torch kept about $21 million and split $11 million with the retailers who hosted the machines. Roughly 65% of the money that went in came back out as prizes. Steven Miltenberger, Torch’s founder and 51% owner, testified that payouts from his machines were “about the same” as those at Missouri’s state-licensed casinos. Licensed casinos pay out just over 90%.
Why State Courts Hadn’t Resolved the Question
Before the TNT case, Torch had spent years fighting the Missouri State Highway Patrol over seizures of its devices. In February 2021, Torch and Warrenton Oil Company, a convenience store chain that hosted many of the machines, sued the Highway Patrol, the Department of Public Safety, and the Division of Alcohol and Tobacco Control. They sought a declaration that the machines were legal and an injunction against what Torch called a “campaign of harassment and intimidation.” The Missouri Gaming Association, representing licensed casinos, intervened on the opposite side, asking the court to declare the machines illegal.
Both sides lost on procedural grounds. Cole County Circuit Judge Daniel Green dismissed the case in October 2023, and on May 28, 2024, the Western District Court of Appeals unanimously affirmed. Writing for the three-judge panel, Judge Edward Ardini held that Missouri courts cannot grant equitable relief that interferes with criminal law enforcement unless the underlying law’s constitutionality is challenged, a principle known as the Eagleton doctrine. Because no one had challenged the constitutionality of Missouri’s gambling statutes, the courts said they could not decide the legality question in a civil suit. It would have to be resolved through criminal prosecution or, as it turned out, through a federal false-advertising trial.
The Criminal Investigation and the Shutdown
Judge Ross’s February 2026 ruling gave prosecutors what state courts had refused to provide: an unambiguous federal finding that the machines were illegal. Missouri’s new attorney general, Catherine Hanaway, moved quickly. Her office, working with the U.S. Attorney’s Offices for the Eastern and Western Districts of Missouri, opened a joint criminal investigation targeting Torch and the retailers hosting its machines.
The AG’s office filed felony promoting-gambling charges against convenience store owners in Greene, Dunklin, and Boone counties, among others. In one sting operation, authorities seized 35 machines and more than $58,000 in cash from five gas stations. Hanaway offered to consider dropping charges against store owners who agreed to permanently shut down and not reconnect the machines.
On April 6, 2026, Torch sent a letter to its retailers warning that “criminal proceedings create real uncertainty for our business — and more importantly, they create risk for all of you.” Four days later, on April 10, the company suspended operations statewide. The Missouri Gaming Commission had estimated roughly 15,000 Torch machines were in service before the shutdown. Hanaway characterized the move bluntly, saying Torch shut down “to avoid prosecution.”
Compliance was uneven. Some retailers disconnected their devices or turned them around; others kept operating past the deadline. Hanaway warned that any store owner still running the machines faced “additional penalties up to and including criminal charges.”
The Failed Legislative Rescue
As it wound down its machines, Torch pivoted to Jefferson City. House Bill 2989 would have placed video lottery terminals under Missouri Lottery oversight, set an 80% minimum payout rate, imposed a 3% profit tax for local governments, and given existing operators a one-year transition period. It narrowly passed the House with 83 votes in February 2026.
The Senate killed it. Senate President Pro Tem Cindy O’Laughlin questioned why the state should regulate machines that federal courts had already declared illegal. On May 6, 2026, the Senate’s select committee on gaming voted 5-0 against advancing the bill. The legislative session ended on May 15, and the effort ended with it.
Where Things Stand
Torch’s machines remain offline. The Attorney General’s office and federal prosecutors continue to pursue what they describe as a “permanent resolution,” and Hanaway has said enforcement will continue against other operators, manufacturers, and retailers involved in unregulated gaming. The Missouri Gaming Commission’s deputy director has confirmed that Miltenberger is on the state’s list of known suppliers of illegal gaming devices. The disgorgement figure and attorneys’ fee award in the TNT case are still to be calculated, and Torch’s appeal of the jury verdict has been announced but not resolved.