Virginia state Senator Joe Morrissey and three other state lawmakers recently flew to Illinois with a lobbyist for companies that operate and sell video gambling terminals. The trip got Morrissey fired up to sponsor legislation allowing the VGTs. Morrissey said, “Just speaking for myself, I don’t know how the other legislators felt about this, but I felt my visit was very purposeful and productive. I came away extremely impressed with the VGT industry−the professionalism, their sense of responsibility, their commitment to doing what is right for the public.”
Observers said the timing of the Illinois jaunt is “interesting” since Virginia banned skill-based or “gray machines” effective July 1. Now convenience stores, grocers and truck stops across the state risk a fine and other penalties if they continue to offer the machines.
A lawsuit and a complaint to the state attorney general unsuccessfully attempted to block the ban on VGTs. The interested parties said they haven’t given up yet. But Morrissey isn’t necessarily wanting to bring back those games. He said, “The way the VGT machines are regulated and the way they could be regulated in Virginia, I’m leaning toward supporting the VGT machines. My main concern is that my business people, the ones who operate the convenience stores, the truck stops, etc., that they get those machines in their stores. A game of skill or a VGT machine, let’s be clear, they’re both the same thing. They’re slot machines. You can call them whatever you want.”
Morrissey said providing the VGTs is crucial for businesses in his district. “It makes a huge difference. It’s usually their entire profit line for the year, $1,200 to $1,700 a month, up to six machines if Virginia follows the pattern that Illinois did. That’s huge for my mom-and-pop grocery stores in my district,” he said.
Morrissey noted Virginia already had a “trial run” of VGTs. Last summer, Governor Ralph Northam proposed allowing businesses to register and then legally operate their skill-based games for a year, to provide revenue during the Covid-19 pandemic. The legislature agreed and implemented the system. The taxes on the machines generated $100 million for the state. Furthermore, Virginia Lottery sales were not impacted as feared.
Morrissey said, “The VGTs are very upfront. ‘We’re regulated. We’re taxed. We don’t cheat. We play by the rules.’ In Illinois, all the VGTs licenses are owned by publicly held companies traded and regulated very carefully, and they’re not going to cheat. That’s huge. That’s what we need in Virginia: a well-regulated industry.”
However, a 2019 report by ProPublica showed the VGT system in Illinois has not delivered the benefits to the state it promised. The report states, “Within months of the law’s passage, the state began borrowing hundreds of millions of dollars against the anticipated revenue. Bond documents claimed video gambling machines would raise $300 million each year to help cover the debt payments. It wasn’t until 2017, eight years after the legalization of video gambling, that the state came close to collecting that amount. By then, video gambling had brought in less than $1 billion to pay the bond debt, $1.3 billion short of what lawmakers anticipated.” That’s because regulatory expenses far exceeded expectations, the report said.
Still, Morrissey’s enthusiasm for what he saw in Illinois hasn’t diminished.
“I went out there specifically to learn about VGT and what I learned, it was all positive. I’m going to share that with my fellow colleagues in the Senate and tell them that we will be missing the boat if we don’t bring VGT to Virginia.”
Morrissey said, “My first major takeaway was that the way the Illinois Gaming Board has set things up, it is impossible to game the system with the VGT machines. You simply cannot cheat the localities out of their taxes. That was my major takeaway. Given the regulation that exists there, I was very impressed with the level of competition. The more competition that you get into an industry, the better it is for the consumer. For the consumer, that’s measured by the payout. My third takeaway was just the cleanliness of where the VGT machines were located. While we didn’t visit a truck stop, which I hoped to, we visited convenience stores, bars, restaurants and they were neat, orderly and that left a lasting impression on me.”
Morrissey also plans to sponsor legislation next year that would include VGTs in the overall framework of legal gambling in Virginia.
“We wouldn’t have an opportunity to pass a bill this year. This bill will come up in the 2022 session for a new governor.”
