Virginia Gov. Glenn Youngkin has addressed a bill to legalize and regulate so-called “skill games” by sending it back to the General Assembly with major changes, including stricter regulations on the slot-like machines.
Youngkin took the action as he worked last week to wrap up action on 1,046 bills passed and sent to the Republican governor’s desk by the Democratic-controlled legislature before adjourning its 60-day session last month. Working against an 11:59 p.m. April 8 deadline, Youngkin essentially rewrote the measure that was approved by the legislature and sent to his desk.
The legislature will have to act on the amendments in its April 17 special session. If they do not vote to pass the amended bill, it goes back to the governor for a final action that cannot be contested. Had Youngkin vetoed the bill, the legislature could have had the option of an override with a two-thirds supermajority.
Skill games, slot-like machines purporting to use an element of skill, spread as unregulated gaming machines across the state, appearing in bars, restaurants, convenience stores and other public locations before being banned by the Virginia Legislature in 2020, around the same time that the state legalized construction of casinos for the first time.
But then-Gov. Ralph Northam in 2021 backed a one-year delay in the ban due to economic pressures created by Covid-based shutdowns of many businesses.
An effort to declare the ban unconstitutional led to a Virginia judge issuing an injunction to block enforcement of the ban in December 2021, but that injunction was subsequently lifted, and last November, the state began enforcement of the law, requiring hundreds of small businesses to shut down the machines.
This year, those business owners succeeded in bringing bills to legalize and tax the games to the floors of each chamber of the General Assembly. However, Youngkin stated publicly that he was dissatisfied with both the House and Senate legalization bills. After each chamber passed its bill, a conference committee yielded a compromise that easily passed, with votes of 31-9 in the Senate and 49-43 in the House of Delegates.
In late March, a group of small business owners headed by the Virginia Amusement Coalition rallied on the steps of Capitol Square in Richmond last week to pressure Youngkin to sign the final bill passed by the legislature. That bill would have allowed up to four of the skill machines in any convenience store, restaurant or liquor-licensed establishment, and up to 10 at each truck stop.
Youngkin’s amendments would gut that plan, restricting the games to Virginia Lottery retailers, a provision that would eliminate most bars and restaurants. Under the governor’s changes, three machines would be authorized at each establishment that sells lottery tickets, and seven at each truck stop.
His amendments also propose raising the state tax on skill games from 25 percent in the final version of the House bill to 35 percent. Additionally, the amendments stipulate that the games must pay out a minimum of 80 percent of the money wagered. Moreover, they grant cities and counties the authority to enact ordinances or conduct referendums to prohibit the operation of these machines. The maximum payout would be capped at $500 under the amendments.
Youngkin’s amendments would bring skill games closer to the regulations required of the slot machines in Virginia’s casinos.
In an interview with the Washington Post, state Senator Aaron Rouse, who sponsored the bill, decried what he called the “11th-hour” gutting of the bill. He said he had anticipated a few amendments in a Saturday conference call with the governor, but not a complete overhaul of its provisions, which led to a second conference call the following day.
“Two hours into the first phone call, I said: ‘Hold on. I expected amendments, but you’re rewriting the bill—on a phone call,’” Rouse told the Post. “This is too important to be doing this on the fly at the 11th hour… They basically wanted to rewrite the bill in five hours, something that took 60 days.”
