New Colorado Law Aims To Help Eliminate Illegal Gray Machines

Written By Nicholaus Garcia on July 26, 2022
Illegal Slot Machines Being Eliminated From Colorado's New Law

Businesses in Colorado have found ways around the state’s gambling rules by using illegal “gray machines.” But now, a new law signed by Gov. Jared Polis aims to level the playing field. 

The law gives more power to the state’s Division of Gaming by allowing the agency to conduct investigations outside of towns where gambling is legal in hopes of shutting down these illegal casino operations.

The Centennial State is one of many with legal sports betting, lottery games, and brick-and-mortar US casinos.

Gray gambling machines getting around the law in Colorado

Gray machines appear and operate similar to slot machines. However, in some instances, these illegal machines can payout in different ways, including using cryptocurrency. Some locations even have machines where customers can cash out crypto winnings for cash. 

Speaking with ABC-7, Dan Hartman, director of the state’s Division of Gaming, said,

“We’ll be working to get this grey market out of Colorado.”

Colorado casinos are only legal in three cities.

  • Blackhawk
  • Cripple Creek
  • Central City

Hartman said his office would work with local prosecutors and law enforcement to determine the legality of the machines

“We can bring our experts in to talk about what is and what isn’t legal and maybe make it easier for them to tackle this problem.”

Colorado cities are already taking steps to combat illegal gambling machines

One city, Aurora, CO, located minutes from Denver, is moving forward with banning gray machines. City Councilman Curtis Gardner introduced a law making it unlawful to operate gaming machines found in the city and use cryptocurrency as payment.

“I would like to see the state legislature solve the problem, but in the interim, it’s going to be left up to local communities to decide to enforce the law. They need to know they cannot continue to operate in the City of Aurora,” Gardner said.

The law will take effect in August

Illegal gray machines a growing concern in other states with US gambling

Other states, like Kentucky, are seeing similar illegal gray machine infestations. 

In Kentucky, historical horse racing (HHR) machines — a type of slot machine — are legal and regulated by the Kentucky Lottery. HHR proceeds help fund education in the state while illegal gray machines do not. Thus, it’s no surprise lawmakers and law enforcement in the state have attempted to crack down on illicit operations. 

Much like in Colorado, gray machines are typically located in truck stops, small-town convenience stores, and strip malls. But since the government does not receive a cut of the profits, and the devices are unregulated, they are dubbed illegal. The Bluegrass State is still working to pass legislation to crack down on gray machines and expand its current slate of gambling options. 

Photo by Shutterstock.com
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Nicholaus Garcia

Nick Garcia is a senior reporter for PlayUSA. Garcia provides analysis and in-depth coverage of the gambling industry with a key focus on online casinos, sports betting and financial markets. Garcia has been covering the US gambling market since 2017. He attended Texas Tech University as an undergrad and received a Master of Arts in Journalism from Columbia College Chicago.

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