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Virginia: Bill seeking to legalize, tax “skill-game” machines labeled dead by sponsor


A senior Virginia Republican legislator indicated this week that his bill to legalize and tax “skill game” machines is dead. However, the lawmaker believes the battle to regulate these electronic gaming machines, which have become prevalent in gas stations, pubs, and other places across the state, is far from over.

“It’s dead through the legislative process,” House Majority Leader Terry Kilgore told the Associated Press. His bill was due to be discussed on Tuesday but didn’t get a hearing. According to the lawmaker, it is unlikely that the bill will pass during this session due to difficulty gaining support from other legislators while there is an ongoing court case related to the machines.

These machines, often called “gray machines” as they operate in a gray area of the law, are similar to slot machines in appearance and function, though the manufacturers claim that an element of skill is involved.

The issue, which does not split neatly along partisan lines, has pitted various gambling interests against one another and resulted in a years-long, expensive legal and lobbying fight. The General Assembly initially voted in 2020 to ban the machines, taking on the issue while clearing the way for other types of gambling, including opening the doors for casinos in Virginia for the first time, as reported by The Washington Post.

Rivers Casino Portsmouth, the state's first permanent casino

But skill-game operators got a one-year reprieve after then-Gov. Ralph Northam asked lawmakers to delay the enactment of the ban by a year and instead tax the machines and use the revenue to help fund coronavirus relief efforts. The ban took effect in July 2021.

A legal challenge was filed, and in December 2021, a Virginia judge issued an injunction blocking the ban’s enforcement and allowing the games to continue operating. The judge has 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 enjoy a share of the income, and that they would result in more revenue for the state if they were fully regulated. They also say the confusing legal landscape has led to a proliferation of untaxed illegal games that involve only chance and no element of skill.

Casinos and other opponents, meanwhile, say the machines have fueled problematic gambling while bringing minimal benefit to the state. “With casinos, Virginia has made a thoughtful and targeted policy decision to cultivate the growth of a highly regulated industry at specific locations, requiring local approval,” the owners of the Bristol casino in southwestern Virginia said in a statement last month, as reported by The Washington Post.

Republican Sen. Bill Stanley

Republican Sen. Bill Stanley, an attorney for former NASCAR driver Hermie Sadler’s truck stop and gas station company in the ongoing lawsuit, said he thinks casinos simply want a monopoly on gambling.

“I think if we put a tax and regulatory scheme together, what you’ll see is, it will be very clear to our police officers and our commonwealth’s attorneys what games are legal and what games aren’t. And you’ll see those illegal video game terminals, those illegal games of chance — slot machines — go away,” he said.

Kilgore said that was the aim of his bill: to allow a limited number of regulated games at spots like convenience stores but to do away with the “mini-casinos” or “skill game rooms” that have proliferated around the state.

Kilgore’s bill would have put limits on the number of skill-game machines in certain retail establishments, outlined a taxation structure with some revenue directed toward law enforcement efforts to combat illegal gambling, and increased the civil penalty for having gambling devices in unregulated locations.

While Kilgore conceded that the bill is at a dead-end through the legislative process, he suggested the budget process could provide another avenue to address the issue this year.

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