Proponents of gray machines in the Bluegrass State were trying to seek a legal remedy that would overturn the law outlawing these slot-style devices.
Judge Rules in Favor of Ban
The slot-style gambling machines that are prevalent throughout the South and Midwest have been controversial from the start. The gambling and casino industry wants them banned because they mimic slot machines but the gas stations, taverns, and road stops make an ancillary income off of them and therefore want the ban lifted.
Yet, the casino industry in Kentucky successfully beseeched lawmakers to impose the ban because those small businesses that house gray machines don’t pay the same taxes nor have they invested hundreds of millions to billions of dollars to build a resort-casino that has created jobs and bolstered the local and state economies.
Kentucky Governor Frank Beshear signed House Bill 594, banning gray machines everywhere except at racetracks that are allowed to operate historical horse racing machines, in March 2023. However, legal action was taken to have that law rescinded but it was recently reported that Franklin County Circuit Judge Phillip Shepherd rejected the action that would overturn HB 594 and affirmed the authority of the state government to regulate gaming in the state.
The action taken by the plaintiffs argued that banning the gray machines violated free speech and equal protection guarantees. Judge Shepherd disagreed and wrote in his June 28th ruling, “It was entirely unreasonable, based on Kentucky’s long history of regulating gambling… for an investor to expect that any machine operating on the fringe zones of legality as a gambling device would be exempt from subsequent regulation or prohibition by the legislature.”
Judge Shepherd went one step further and endorsed HB 594 by writing that the legislation was a “lawful exercise of the legislature’s police power to regulate gambling for the legitimate governmental interest in addressing the social harms of unregulated forms of gambling.”
Will There Be an Appeal?
The plaintiffs who filed the lawsuit were not surprisingly purveyors and manufacturers of the gray machines themselves. ARKK Properties operated a store where the machines were present and its lawsuit was joined by POM of Kentucky, LLC, the Kentucky subsidiary of Pace-O-Matic which is a leading manufacturer of the gray machines.
Kentucky House Speaker David Osborne argued that the ruling “further confirms that these games were illegal and operating without any of the appropriate regulatory guidelines.”
The support for the ban on the gray machines is bipartisan and it will now pave a clearer path for the Attorney General to give guidance to local prosecutors who can now ostensibly operate much more aggressively against those businesses that operate gray machines.
Representative Killian Timoney, the primary sponsor of House Bill 594, said the ruling will put teeth into enforcing the law, stating, “(Attorney General) Russell Coleman will have a much clearer direction on how to relay messaging to the county attorneys pertaining to House Bill 594.”
Attorney General Coleman defended House Bill 594, stating that lawmakers “took a bold and bipartisan step to protect Kentucky children and families when they outlawed gray machines.” Coleman lauded the ruling as a “resounding victory” for the state.
Frankfort attorney J. Guthrie True, counsel for the plaintiffs, said after the ruling that he “wouldn’t be surprised” if his clients escalated the matter to the state’s Court of Appeals. Whether that happens remains to be seen.
