Skills games, often referred to as gray machines because they live in the gray area of the law of betting, are set to be legalized and taxed in Old Dominion as SB 212 awaits Governor Glenn Youngkin’s signature.
The Great Debate
The political discourse concerning skill machines versus slot machines has the former relegated to truck stops and convenience stores while the latter is found almost exclusively inside casinos. The difference between the two is quite narrow and many are left wondering what skill is required, other than dumb luck, to successfully make money on a skill machine.
Skill machines demand the bettor choose where to place a wild card versus simply pulling a lever or pressing a button for a slot machine. Although both machines look similar there has been a great divide as to whether skill machines should be outlawed entirely or embraced completely.
Keeping Pace
Pace-O-Matic, one of the biggest manufacturers of skill machines, and the small businesses that rely on them as an ancillary revenue stream are firmly in the corner of legalizing them. However, casino operators contend they are cannibalizing their business.
For example, it’s much easier for a gambler to walk or take a short drive to a local convenience store or truck stop to bet a few bucks rather than drive to the nearest casino, search for parking, and get a similar experience without the hassle.
Neighborhood Patrol
The other faction opposing the skill machines are anti-gambling groups like Virginians Against Neighborhood Slot Machines which issued the following statement: “This is bad policy that would bring an unprecedented expansion of gambling to every corner of Virginia without even attempting to provide basic guardrails including local referendums, legitimate background checks, security or problem gambling regulatory requirements.”
Yet the lobby formed to fight for the legalization of the skill machines is equally as vehement in its support. Rich Kelly, President of the Virginia Merchants, and Amusement Coalition, said: “For years, thousands of small businesses throughout the Commonwealth have come to rely on the supplemental, sustainable revenue provided by skill games. This victory will solidify their presence in Virginia and give thousands of small business owners peace of mind knowing they can keep their doors open, create jobs, and support their local communities.”
What’s in the Bill?
Senator Aaron Rouse and Senator L. Louise Lucas, chair of the Senate Finance Committee, are the co-sponsors of SB 212 and it already has the blessing of the Senate by a 31-9 vote, and the House of Delegates that voted aye by a 49-43 margin.
The final bill waiting to receive the governor’s signature looks like this:
- Minimum age of 21
- A tax of 25% instead of 15%.
- Alcohol Beverage Control (ABC) will initially regulate machines. The Virginia Lottery Board will later take over.
- Up to four machines instead of five in ABC-licensed locations.
The revenue would be dispersed as follows:
- PreK-12 Priority Fund: 75%
- Local municipalities: 15%
- Administrative costs: 6%
- Problem Gambling Treatment and Support Fund: 2%
- Department of State Police: 1%
- Local municipalities law-enforcement agencies: 1%
The legalization of skill machines in Virginia is projected to generate $200 million annually in taxes and it is expected the governor will sign the bill.
However, late last month a spokesperson for Governor Youngkin, Rob Damschen, said, “The administration has serious concerns with both the House and Senate versions of the bill. There are numerous issues to work through including the regulatory structure, tax rates, the number of machines, impact on the Virginia Lottery, and broader public safety implications.”
