Police crackdown on potential illegal gaming devices at dozens of Colorado Springs locations

COLORADO SPRINGS, Colo. (KRDO) -- For the last five years, many businesses with illegal gambling machines have avoided penalties — until now.

The Colorado Springs Police Department issued notices to at least 32 businesses in Colorado Springs warning them they could potentially be breaking the law by having illegal gambling machines.

These machines look similar to a game you would find at places like Dave and Busters, except for one important distinction: customers expect or hope for a monetary return. According to law enforcement, that's what makes these gambling machines illegal. At Dave and Buster's, customers get tickets, but illegal machines spit out some monetary value.

“You're putting money into these video arcade games and you're getting something in return of a monetary value,” said Lieutenant Mark Chacon with the Colorado Springs Police Department. “It could be a coupon or financial gain.”

Technically, these machines have been illegal since 2016, but a loophole in the legislation made the law hard to enforce, with unclear language about skilled gambling games, like the popular fish arcade games.

In 2018, legislators, including District 12 Republican Senator Bob Gardner, amended the law to include specific definitions, closing the loophole and banning all gambling machines outside of gambling towns, like Cripple Creek and Black Hawk.

Peggi O’Keefe, the executive director of the Colorado Gaming Association, said illegal gambling machines are prevalent throughout the state and a detriment to Colorado’s gaming revenue.

“They're unregulated,” she said. “There's no tax that's collected. There's oftentimes other illegal activities that are associated with these arcades, so it really is a public safety concern for both residents of the community as well as from a law enforcement perspective.”

It’s why the Colorado Springs Police Department is cracking down on these illegal machines now despite the law being in place for the last five years. The agency said it has received increased complaints and more calls to service at these illegal gambling businesses. They have even been the location of much more serious crime, including “narcotics distribution, shootings, vehicular eluding, and the arrest of armed wanted fugitives,” according to CSPD.

But because the agency hasn’t strictly enforced the law, the department is only handing out warnings for now.

“A lot of these businesses are not aware that these are not legal in the state of Colorado,” Chacon said. “That's why it's really important for us to do the educational phase before we even look at any potential enforcement action.”

Charlie Chedda’s, one of the arcade businesses that received a notice from CSPD, told 13 Investigates it isn’t breaking the law because it doesn’t have any individual monetary gambling machines but instead hosts arcade contests and tournaments with a monetary prize for the winner.

“Charlie Chedda’s is extremely grateful to the Colorado Springs Police Department for addressing the issue of so-called “skilled” game rooms, and we welcome their actions. Charlie Chedda’s has been the trailblazer for creating legitimate, Colorado Law compliant, contest video game venues since 2015. To our knowledge the software utilized by Charlie Chedda’s is the only software that has been reviewed and approved by the State Attorney General’s office, and nationally recognized independent laboratories for compliance specifically with Colorado contest laws. Bona-fide contests have always been exempt from Colorado gaming regulations, which was made even clearer by the Colorado Legislature with the adoption of CRS 18-10.5-103 effectively regulating prize requirements for simulated gambling.”

Charlie Chedda's statement

CSPD wouldn’t provide information about when it will start investigating these illegal gambling businesses, but the penalties could range from a class two misdemeanor to a class six felony, with fines and even potential jail time for business owners.

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