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LOUISVILLE, Ky. -- According to a newspaper investigation, illegal video gambling machines are widespread throughout Indiana and Kentucky, costing players hundreds of millions of dollars a year, reported the Associated Press.
The machines, with names such as "Cherry Master," "Pot O' Gold" and "Video Redemption," often operate in the open at truckstops, convenience stores and bars.
An investigation by the Louisville Courier-Journal included reviews of hundreds of records in the two states and interviews with government and industry officials. A reporter, taking a single trip down the length of Interstate 75 in Kentucky, found 137 machines at 19 truckstops, convenience stores and fast-food restaurants located at 15 exits.
These illegal machines stack the odds heavily against the players. Slot machines at Ohio River casinos are required to have at least an 80 percent payout rate, meaning they will average giving away 80 cents for every dollar wagered. But operators of illegal machines make their own rules.
"The amount of money these machines make is ungodly," said John Whiteleather, who was prosecutor for eight terms in Whitley County, Ind.
Because the devices are illegal in both states, state and local governments are unable to tax the profits they generate.
A study by the Indiana Licensed Beverage Association, which is working to have video gambling legalized, estimated that Indiana gamblers would spend nearly $1 billion annually if even half of the state's bars and restaurants had five of the devices.
To play, a person might insert money, and then work buttons on a console to play hands of video poker or to start and stop reels of spinning symbols. Points are awarded based on various combinations.
The machines don't pay winnings directly, as many casino slot machines do. Instead, players receive tickets from a dispenser to verify the number of accumulated points. They take them to the bar or store counter, or summon a bartender to verify the points. Points are redeemed for cash or merchandise.