In Virginia, an estimated thousands of untaxed and unregulated skill machines can continue to operate for the near future, thanks to Greensville County Circuit Court Judge Louis Lerner’s recent ruling that extends an injunction preventing the state from enforcing a ban on the machines as the case moves through the courts.
Lerner said the ban violates free speech by classifying a particular type of video game as illegal gambling. In his ruling, Lerner wrote, “Naming it as gambling or wagering does not matter.”
In 2021, the legislature and former Governor Ralph Northam attempted to ban the skill machines, but Hermie Sadler, a former NASCAR driver and truck stop owner, filed a lawsuit that has kept the ban from being enforced for nearly a year. Sadler is represented by state Senator Bill Stanley.
As a result, Lerner noted the case may not be concluded until the end of the 2023 legislative session, in April or May 2023. He said, “We understand that the plaintiff’s attorney has obligations at the General Assembly that are entitled to deference by statute.”
Opponents of skill games said unlike the casino, sports betting and horse racing industries, the skill-game industry took advantage of legal loopholes to avoid gaining permission to operate from the legislature. Proponents said the machines have given smaller businesspeople an opportunity to compete with other gambling operations. In addition, industry officials said the machines should not be considered gambling since they’re based on skill, not chance.
The state, however, claims the skill involved in the games is minimal and only serves to provide the appearance of legal cover to gambling machines the state has every right to ban. Lawyers for Virginia said the First Amendment has nothing to do with the ban on the games, but because the betting activity they’re based on isn’t found in other types of arcade games.
Attorneys for the state have informed Lerner they intend to lodge formal objections to how the case has been handled−a sign they plan to appeal if Lerner strikes down the ban permanently next year.
The Virginia skill-game industry has enlisted national free speech expert Rodney Smolla, the president of Vermont Law School, to help its case. In a brief, Smolla said the machines have the same First Amendment protections as other video games.
He wrote in a brief, “At the end of the day, the Commonwealth’s case rests on nothing more than an ‘Alice in Wonderland’ approach to the meaning of words, in which ‘illegal gambling’ comes to mean whatever the Commonwealth chooses to define it to mean. As Humpty Dumpty said to Alice, ‘When I use a word it means just what I want it to mean, neither more nor less.’ But First Amendment law is neither so glib as Humpty Dumpty nor so credulous as Alice.”
Michael Barley, a spokesman for Queen of Virginia, a subsidiary of Pace-O-Matic skill game machines, said, “We anticipate the final court decision will uphold the legality of skill games in the commonwealth. However, without further regulation and additional taxation, taxpayers are missing out on nearly $100 million in tax revenue that could have gone toward critical projects along with curbing illegal games that are proliferating in Virginia communities.”
