Virginia’s Youngkin Vetoes Skill-Gaming Bill

Virginia Governor Glenn Youngkin (l.) vetoed the bill passed by the General Assembly to officially legalize and regulate so-called skill machines banned by a previous law.

Virginia’s Youngkin Vetoes Skill-Gaming Bill

The drive by lawmakers to turn so-called skill games operated by Virginia small businesses back on after being inactive for months ended last week, at least for this year, when Gov. Glenn Youngkin vetoed legislation passed by the General Assembly to officially legalize and regulate the slot-like games.

Lawmakers had approved the bill, which contained very few legislative restrictions or safeguards, earlier this year. Youngkin had previously informed the legislators that he was dissatisfied with the final bills in both the Assembly and Senate.

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.

Despite pressure from small business advocates to sign the bill—including a rally on the steps of the Capitol in Richmond—Youngkin exercised his option under the law to send an amended version of the bill back to the legislature, which had the option of sending the amended version back to the governor. Both chambers rejected the amendments.

The bill approved by the legislature 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 proposed raising the state tax on skill games from 25 percent to 35 percent. Additionally, the amendments stipulated that the games must pay out a minimum of 80 percent of the money wagered, and would have given 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 have brought the skill games closer to the regulations required of the slot machines in Virginia’s casinos.

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.

In issuing his final veto of the legislation, Youngkin said further expansion of gaming in the commonwealth, which in recent years has included the authorization of brick-and-mortar commercial casinos, HHR gaming, and retail and online sports betting, must be carefully deliberated and come with many consumer protections that were absent in the bill cleared by lawmakers.

“When it comes to additional gaming options, such as games of skill, we must proceed with a robust set of safeguards,” Youngkin said, according to the Virginia Mercury. “I sent over a package of amendments which addressed my many concerns with the bill. While it is regrettable that my recommendations were not adopted, I remain open to working with the General Assembly going forward on this subject.”

State Sen. Aaron Rouse, who sponsored the original Senate bill on skill games, said he’ll propose a new skill-gaming bill during the Assembly’s special session that began last week.

Del. Terry Kilgore, sponsor of the House bill, also said he will continue to seek a compromise with the governor on skill games.

“We and the governor are going to attempt to come up with a solution to help our small business owners,” Kilgore said, according to the Mercury.

Meanwhile, the American Gaming Association, which has joined with the Association of Gaming Equipment Manufacturers in a years-long effort to eradicate unregulated skill games, was quick to laud Youngkin’ veto of the sill games bill.

“We applaud Governor Youngkin’s veto of SB 212, which will protect communities from illegal gambling machines and uphold not only the original ban passed by the General Assembly in 2020 but subsequent judicial determinations in Virginia’s courts.

“We will continue to work with law enforcement, faith-based, and civic stakeholders throughout the commonwealth to protect the critical role communities play in determining whether ‘skill games’ are permitted in their respective jurisdictions, which recent polling clearly indicates is a top concern for Virginia voters who overwhelmingly oppose the reintroduction of these machines.”