Missouri, Indiana, and Mississippi Introduce New 2026 Legislation for Video Gaming and Lottery Terminals

Video gaming terminals (VGTs) generate billions of dollars in annual revenue across the U.S., particularly in mature markets such as Illinois, making them an increasingly attractive policy option for states seeking new gambling revenue streams without expanding full-scale casino gaming.

Updated on 8 January 2026

One of the biggest attractions of VGTs to states is that they offer a regulatory workaround for launching gaming machines without amending their constitutions or legalizing casino gambling.

As budget pressures persist, several states have turned to VGTs as a source of incremental tax revenue. Lawmakers in Mississippi, Missouri, and Indiana will debate new VGT bills in 2026 that reflect sharply different approaches to regulating the machines.

While the proposals are often grouped together as video gaming terminal legislation, Missouri and Mississippi structure their bills around lottery-regulated video lottery terminals, while Indiana’s proposal regulates video gaming terminals as a standalone gaming product.

Missouri Targets the Black Market

In Missouri, Senate Bill 850 (SB 850) received its first Senate hearing on January 7. The bill would establish the Missouri Video Lottery Control Act to legalize video lottery terminals (VLTs) outside of casinos.

The Missouri Lottery Commission would require all VLTs to connect to a centralized computer system. Each game would require a minimum payout percentage of 85%. The bet sizes would range from $0.01 to $0.25 per credit. Furthermore, the maximum acceptable wager is set at $5 per game, and the biggest possible payout would be $1,000.

Establishments with a liquor license could have up to five terminals per location. Meanwhile, veterans’ organizations would be able to house as many as ten. To protect competition, no single company could control over 25% of the terminals, distribution, or manufacturing. If local governments have concerns about VLTs, they may ban them within 120 days of enactment.

In terms of taxation, SB 850 proposes directing 36% of gross revenue to the state. Additionally, 4% would go to local governments to cover administrative costs. The state would give unauthorized machines currently operating in Missouri a set timeline to become compliant.

The penalties for breaches can escalate to as high as $1 million, and criminal prosecution may also be possible.

Missouri Attorney General Catherine Hanaway recently stated, while speaking to Missourinet, that her office will aggressively target unlicensed VLTs operating in restaurants, bars, and gas stations.

No Direct Cash Payouts Under the Indiana Proposal

Indiana lawmakers are considering the legalization of VGTs through House Bill 1235 (HB 1235). The caveat is that the payouts would be in the form of tickets, rather than direct cash. The bill was referred to the Committee on Public Policy on January 5.

Only licensed establishments, such as veterans organizations, truck stops, and certain bars/restaurants, could house these terminals. Generally, locations can’t offer VGTs if they’re within 100 feet of a school or place of worship. Additionally, they cannot be located within 1,000 feet of an existing casino or slot facility.

The Indiana Gaming Commission would be fully responsible for licensing and overseeing the sector. The bill limits each location to five terminals. The maximum wager would be $2 per round, and the maximum possible win would be $599.

The bill requires operators to pay a 30% tax on adjusted gross receipts each month. The state general fund would get 30% of the resulting funds, with the municipality and county evenly splitting the remaining 70%. Cities, towns, and counties can pass ordinances to ban VGTs if they wish.

Notably, a fiscal note attached to the bill shows how a rollout of VGTs would significantly threaten existing riverboat casinos and racinos. It projects total revenue losses of between $32.6 million and $80 million annually by fiscal year 2030 for these establishments.

The expected net impact on the state’s General Fund by the same year ranges from a $300,000 drop to an increase of up to $10.2 million.

Small-Stakes Plan in Mississippi

Finally, Mississippi Rep. Jim Hines’ House Bill 76 (HB 76) was referred to the Gaming Ways and Means Committee on January 7. It would permit the Mississippi Lottery Corporation Board to allow VLTs under strict limits.

HB 76 amends Mississippi’s lottery statutes to formally define “video lottery” and “video lottery terminal” as electronic interactive game machines that accept value and award prizes or credits based wholly or predominantly on chance. The language separates VGTs from skill game machines.

The max bet would be $0.01 per play, with payouts capped at $750 per round. Only truck stops would be able to house these machines. Only five such locations per congressional district would be approved.

The state will classify any unauthorized video lottery devices as illegal gambling devices and seize and destroy them.

HB 76 further clarifies that its provisions will not affect gaming operations at licensed casino facilities. The proposal would not infringe upon the authority of the Mississippi Gaming Commission, explicitly separating the proposed VLT framework from the state’s existing casino gaming structure.

If enacted, the legislation would take effect on July 1, 2026.