Bill to legalize electronic 'skill games' in Virginia won't move forward

Jun 15, 2023

A woman using an electronic “skill game” machine. (Photo: 8News)

by: Dean Mirshahi

Posted: Feb 2, 2023 / 01:59 PM EST

Updated: Feb 2, 2023 / 02:16 PM EST

RICHMOND, Va. (WRIC) — A top Republican lawmaker doubts his bill to legalize so-called skill machines in Virginia will pass this year, saying the prolonged legal fight over the issue has left some hesitant about the proposal.

Virginia banned the slots-like betting machines typically found in convenience stores, truck stops, sports bars and other businesses. But an ongoing legal battle has blocked the commonwealth from enforcing the ban, leaving the devices in a largely unregulated space.

House Majority Leader Terry Kilgore (R-Scott) put forward a bill to reauthorize the devices until at least July 2024 by restoring Virginia’s regulations before the ban. The measure was set to go before the Republican-led House General Laws subcommittee this week but never did.

On Thursday, Del. Kilgore confirmed that his bill was dead and that he doubts “it comes back” through the legislative or state budget process. The Associated Press first reported that the legislation was not advancing.

“I think there is support but the lawsuit going through the court system makes some people have concern about legislation while a suit is going,” Kilgore told 8News.

The electronic betting machines, sometimes referred to as “gray machines” because they function in a gray area of the law, look and pay out winnings like slot machines. The industry and manufacturers of the machines argue skill is involved — hence the name “skill games.”

The Virginia General Assembly voted for the so-called skill games ban, but lawmakers agreed to delay the ban at the request of then-Gov. Ralph Northam (D) so the tax revenue from the machines could help fund state needs amid the COVID-19 pandemic.

The ban, which went into effect in July 2021, came as state lawmakers approved legislation to make way for up to five casinos and mobile sports betting in Virginia.

A lawsuit challenging the ban was filed in Greenville County Circuit Court before it went into effect on behalf of the truck stop and gas station company owned by former NASCAR driver Hermie Sadler.

The court granted an injunction preventing the ban from being enforced, which has been prolonged as the court case is postponed with Sadler’s attorney, Republican state Sen. Bill Stanley (Franklin County), in the legislative session.

Supporters of skill games, including distributors, argue that the machines give small businesses much-needed income and would provide millions in tax revenue for the commonwealth, including public education funding.

Without the previous regulations in place, supporters claim, the commonwealth can’t oversee illegal machines hosted by businesses and or impose a higher tax rate on the devices.

“If regulated, skill games are expected to generate over $140 million per year in tax revenue that the general assembly can put towards vital efforts like funding Virginia schools, improving our infrastructure and supporting law enforcement as they take on the tens of thousands of illegal games in Virginia communities,” Mike Barley, chief public affairs officer for Pace-O-Matic, said in a statement.

Pace-O-Matic, the skill-games developer behind the Queen of Virginia games, has donated nearly $1 million to Virginia candidates, nearly evenly split among Democrats and Republicans, according to the Virginia Public Access Project.

Kilgore’s bill would have increased the maximum penalty for those with so-called skill machines in unauthorized locations from $25,000 to $50,000.

The measure would have put the betting machines, which remain in place with little oversight, under the purview of the Virginia Alcoholic Beverage Control Authority again while the commonwealth worked to establish a regulatory structure.

Youngkin spokesperson Macaulay Porter declined to comment on Kilgore’s bill. Sadler’s case is expected to resume later this year after the General Assembly session, meaning the machines will stay in place until a ruling is made.

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