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Slot Machines Disguised as Arcades Rampant in Colorado, Local Authorities Demand Regulation

Gaming arcade operators in Colorado exploit loopholes in the law to covertly offer casino-style gaming, an undercover investigation by a local media showed. Casino gaming is legal in the Centennial State but only at licensed facilities in Cripple Creek, Black Hawk, and Central City. As it turned out, covert gambling takes place all over the state despite the restrictions.

A Denver7 Investigates team visited several locations with adult gaming arcades in the Denver metropolitan area and used hidden cameras to show how proprietors circumvent the law. The adult gaming arcades are often located in strip malls, the investigation showed. The reporters spoke to customers who told them the arcades usually pay better than traditional casinos. The cashier at one location even pointed out a customer won upward of $13,000 within a week.

The arcade operators implement different tactics to bypass the regulatory restrictions. At one venue in Lakewood, customers paid to play at the cash register and the machines returned their profits in cryptocurrency. Another machine then converted the cryptocurrency into fiat money. One employee said the arcade venue offers the machines in the capacity of a “third-party”.

Such proprietors seem to exploit a loophole in a 2018 state law that prohibited gaming machines outside casinos from paying out cash prizes. Some employees appearing in the undercover video insisted their games were different and were considered skill-based arcades. Yet, many of them look and play exactly like slot machines at regular casinos.

Other gaming arcade facilities paid the winnings directly in fiat money at the cash registers, the investigation revealed. After seeing the undercover material, Aurora City Council Member Curtis Gardner said he contemplated proposing an ordinance that would better regulate these machines or ban them altogether.

Gaming Arcades Are Linked to Crimes, Police Chief Says

Similar tendencies can be observed outside Denver, with gaming arcade venues emerging in the Western Slope region of the state. Blaine Hall, Chief of the Montrose Police Department, considers the arcades a danger to public safety. He believes this form of gaming is very identical to what happens at Las Vegas casinos, but on a significantly smaller scale and with less regulatory oversight.

Police Chief Hall said there was a connection between the machines and some serious crimes in the Montrose community. The arcades have been linked to various criminal offenses like burglaries, shootings, and stabbings. As a result of those crimes, the Montrose City Council declared a moratorium on new arcades in hopes that state lawmakers would take notice and enforce more adequate regulations.

Peggi O’Keefe, Executive Director of the Colorado Gaming Association, said the arcades operated without proper regulations and consumer protections in place. According to O’Keefe, such facilities offer games that are unlawful outside the three gambling towns mentioned earlier.

Two complaints against the machines were made in Lakewood. Earlier this year, Denver police forces said they assisted a SWAT team during a raid at one such venue. The Colorado legislature appears unlikely to tackle the arcade issue during the current legislative session.

 Author: Hannah Wallace

Hannah Wallace has been part of our team since the website was launched. She has a master’s degree in IT.