The group Virginians Against Neighborhood Slot Machines recently launched a broadcast campaign opposing legalizing “gray” machines, slot-like games that require some skill to play.
The group claims, “Convenience store slots, the so-called gray machines, bring crime and violence to vulnerable Virginia communities.” In addition, the organization argues that the gray machines differ from casinos, which were approved by voter referendum and are highly regulated.
Rivers Casino in Portsmouth and the proposed Headwaters Resort & Casino in Norfolk have made generous donations to the campaign. Spokespeople say about 9,000 gray machines were operating in 2021, but proposed legislation would allow 91,000 machines, based on the number of licensed establishments statewide.
Chris Cylke, senior vice president of government relations at the American Gaming Association, said Virginia lawmakers are not only considering “certainly the largest expansion of gambling in the commonwealth, but quite possibly, one of the largest gambling expansions in the history of the country.”
The games were banned in 2020, but skill game operators got a one-year reprieve after then-Governor Ralph Northam requested the delay, in order to tax the machines and use the revenue for pandemic relief. The ban subsequently took effect in July 2021.
However, a legal challenge was filed and a judge issued an injunction blocking enforcement of the ban in December 2021. Last fall, the Virginia Supreme Court vacated the lower court’s injunction, and the machines were banned once again.
State Senators Aaron Rouse and L. Louise Lucas are co-sponsors of the bill that would regulate and tax the machines. In an interview with WTKR, Rouse said, “This is a small-business issue, and one that impacts many first-generation Americans trying to achieve the American dream. By supporting the most vulnerable businesses in our commonwealth, we’re supporting the little guy.”
The bill also has the support of skill-games producer Pace-O-Matic, which has donated hundreds of thousands of dollars to legislators’ election campaigns in recent years.
Under the measure, the state’s Alcoholic Beverage Control Authority would regulate the machines. It would limit licensed establishments to five terminals in restaurants and bars and 10 in truck stops. Players would have to prove they are 18 years or older. Skill game revenue would be taxed at 15 percent. Rouse estimates the bill would generate $200 million or more in annual new revenue for the state.
State Senator Jeremy McPike also has sponsored a bill that would legalize the gray machines as well as video terminals. Both types of games would be regulated by the Virginia Lottery Board and require third-party inspections.
Adjusted gross income from the machines would be taxed at 34 percent, with annual revenue projections approaching hundreds of millions, according to McPike. He added his bill would not limit the total number of machines and would require players to show an ID to receive a players’ card. At the moment, McPike said the bill has not yet received a full hearing and is “a little stalled.”
Christian Martinez, spokesman for Governor Glenn Youngkin, said the governor will review any legislation that arrives on his desk.
