Virginia bill to legalize, tax ‘skill game’ machines dead

RICHMOND, Va. — A senior Republican lawmaker from Virginia said this week that his legislation aimed at legalizing and taxing a certain type of electronic wagering machine that has proliferated in gas stations, bars and other locations across the state is dead is, but the broader struggle is not over yet.

“It’s dead by the legislative process,” House Majority Leader Terry Kilgore said in an interview with The Associated Press on Wednesday.

Kilgore’s bill was due to be taken up on Tuesday but failed to get a hearing. He confirmed he doesn’t expect that measure to propel this session forward and said he’s struggling to get other lawmakers on board while the machines’ matter is currently in a pending court case.

The machines are also known as gray machines because they operate in a legal gray area. The games look and play like slots, although the manufacturers say there is an element of skill involved.

The issue, which cannot be neatly divided according to party lines, has played off different gambling interests against each other and led to years of expensive legal and lobbying battles.

The General Assembly first voted to ban the machines in 2020 and addressed the issue while paving the way for other forms of gambling, including opening casino doors for the first time in Virginia.

But skill game operators were given a year-long reprieve after the then-government. Ralph Northam called on lawmakers to delay the ban’s enactment by a year and instead tax the machines and use proceeds to fund coronavirus relief efforts. The ban came into effect in July 2021.

A legal challenge was filed, and in December 2021, a Virginia judge issued an injunction blocking enforcement of the ban and allowing gaming to continue. The judge declined to dismiss the lawsuit, which could go to trial later this year.

Proponents of the machines say they help small businesses that host them and receive a share of the income, and would result in more revenue for the state if fully regulated. They also say the confusing legal landscape has led to a proliferation of illegal untaxed games that involve only luck and no element of skill.

Mike Barley, chief public affairs officer for skill game developer Pace-O-Matic, said in a statement to AP that the company “will continue to express our support for the regulation and taxation of skill games and will remain committed to doing everything we can.” can end illegal gambling across the state.”

Casinos and other opponents, meanwhile, say the machines have fueled problem gambling while bringing minimal benefit to the state.

“Virginia made a considered and purposeful policy decision with casinos to encourage the growth of a specific highly regulated industry in specific locations that require local licensing. This system protects the safety and well-being of the community, including minors, and our customers benefit from the close oversight and day-to-day monitoring of the industry by the Virginia Lottery, which has extensive rules and regulations in place to govern the way we operate. ‘ the owners of Bristol Casino in southwest Virginia said in a statement last month.

Republican Senator Bill Stanley, an attorney for former NASCAR driver Hermie Sadler’s truckstop and gas station company in the ongoing court case, said he believes casinos simply want a gambling monopoly.

“I think if we put a tax and regulation system together you will see that our Commonwealth’s police officers and lawyers will be very clear about which games are legal and which are not. And you’re going to see these illegal video game terminals, these illegal games of chance – slot machines – go away,” he said.

Kilgore said that’s the goal of his bill: allow a limited number of regulated games in places like convenience stores, but get rid of the “mini-casinos” or “skill game rooms” that have spread across the state.

“You would have gotten rid of all of that. And we will do that, but it will take time,” he said.

Kilgore’s bill would have capped the number of skill-based gaming machines in certain retail outlets, outlined a tax structure with some revenue for law enforcement efforts to combat illegal gambling, and increased the civil penalty for possession of gaming devices in unregulated locations.

While Kilgore acknowledged the bill is at an impasse during the legislative process, he suggested the budget process could offer another avenue to address the issue this year.

Macaulay Porter, a spokeswoman for Republican Gov. Glenn Youngkin, on Thursday declined a request for comment on the governor’s position on the matter.

Porter previously told the Virginia Mercury that the governor “asked for stakeholders to come together and work on legislation that would tackle illegal gambling.”