Virginia skill gaming machines continue to operate in a gray area throughout the commonwealth. And after a legislative effort to regulate and tax the terminals failed this week in the Virginia State Capitol, the legal status of the controversial gaming devices won’t likely be settled anytime soon.
Virginia lawmakers and then-Gov. Ralph Northam (D) temporarily authorized skill gaming machines during the pandemic to help small businesses offset revenue losses. The machines had already proliferated at convenience stores, restaurants, bars, and supermarkets before the provisional legalization.
The state’s allowance of gray machines expired on July 1, 2021. A legal challenge subsequently ensued, with former NASCAR driver Hermie Sadler leading the skill gaming proponents’ fight.
Sadler’s family owns Sadler Brothers Oil and the company’s 13 gas and diesel stations. Most Sadler locations offer skill gaming machines.
State Rep. Bill Stanley (R-Franklin) is an attorney representing Sadler Brothers. In the complaint against the state, Stanley argued the state’s decision to permit and then prohibit an activity is in violation of small businesses’ constitutional rights, and runs amuck of their right to a “procedural and substantive due process.”
Greensville County Circuit Court Judge Louis Lerner issued an injunction soon after Sadler brought his lawsuit that has allowed the skill gaming machines that were temporarily authorized in the commonwealth to continue operating until the case is determined.
Legislative Path Dead
The Virginia skill gaming issue doesn’t adhere to party lines, but has proponents and opponents on both sides of the political aisle.
Del. Terry Kilgore (R-Lee) is among the Republicans who believe skill gaming should be allowed in Virginia if it’s regulated and taxed. Kilgore, who is also the House majority leader, said this week that his bill to permanently legalize, govern, and tax skill gaming machines didn’t find enough support to move forward.
It’s dead through the legislative process,” Kilgore told the Associated Press.
Lerner’s injunction extends through the state’s 2023 legislative session because Stanley is a state lawmaker. Virginia lawsuits involving state delegates and senators are commonly delayed until after the assembly recesses when court cases involve topics that could impact legislative proceedings.
Kilgore said because skill gaming remains unsettled in court, many lawmakers decided against joining his bill.
Virginia is becoming a major gaming state after decades of limiting gambling to its state-run lottery and pari-mutuel wagering. Two casinos have already opened — Hard Rock Bristol and Rivers Portsmouth. Casinos are also in development in Danville and Norfolk.
The casino lobby claims the skill games violate Virginia’s gaming laws. The skill gaming interests say the casinos simply want a gaming monopoly, and that skill gaming terminals aren’t gambling apparatuses.
With his legislative effort dead for 2023, Kilgore says a more appealing path to monitor skill games during the injunction is to include language into the state’s upcoming budget bill.
During the state’s temporary skill gaming allowance, host businesses paid the state a flat fee of $1,200 per month per terminal. The revenue generated by each device was split between the business, gaming manufacturer, and route distributor. No tax was levied on the device’s win.
Pace-O-Matic (POM) is a leading manufacturer of skill games and is behind the popular “Queen of Virginia” cabinet. The Georgia-based manufacturer claims that it, too, is against illegal gaming.
POM says the state’s delay in codifying skill games has resulted in nonskill gaming machines that are solely dependent on chance also popping up in Virginia businesses. Many of those businesses, POM believes, wrongly assume that those terminals are also skill devices.
“We strongly support any effort that will rid Virginia of the plague of illegal gaming that is quickly spreading across the state,” said POM Chief Public Affairs Officer Mike Barley. “The Virginia State Police are correct in engaging the public to help put an end to this scourge.”
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