Legislature Considers Reauthorizing Skill-Based Gaming In Virginia

January 19, 2023
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A senior Republican lawmaker in the Virginia General Assembly has proposed reauthorizing so-called skill games, or grey-market gaming machines, even while the state prepares for another hearing in the spring about its efforts to enforce a ban that is currently on hold.

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A senior Republican lawmaker in the Virginia General Assembly has proposed reauthorizing so-called skill games, or grey-market gaming machines, even while the state prepares for another hearing in the spring about its efforts to enforce a ban that is currently on hold.

House Bill 2295, authored by House Majority Leader Republican Terry Kilgore, would implement rules like those agreed to by former Democratic Governor Ralph Northam, who temporarily allowed the machines to be operated and taxed for a year to raise revenue for coronavirus relief.

The General Assembly voted to end that temporary regime and ban the machines in 2021 but a legal challenge brought by Republican Senator Bill Stanley and lawyers for skill-game company Queen of Virginia has delayed enforcement of the ban.

Kilgore’s bill would allow the machines to operate until Summer 2024, which would give the state time to draft new regulations and end the legal fight over the machines. Distributors of the machines would pay a flat monthly tax of $1,200 per machine, according to the proposal.

Convenience stores, including those licensed by the state's Alcoholic Beverage Control Authority (ABC), could have up to five machines, while truck stops would be capped at ten machines. Kilgore also proposes to increase the civil penalty from up to $25,000 to $50,000 for each unregulated gambling device.

Kilgore further proposed restoring ABC’s responsibility to regulate the machines and requiring, by July 1, 2023, a label identifying that each machine is registered with the agency.

The bill would also create a joint legislative committee with five members each from the Senate Committee on General Laws and Technology and the House Committee on General Laws to analyze the current gaming devices operating legally and illegally in Virginia.

The committee would also analyze any enforcement efforts, the types of organization and electronic games that should be regulated, licensing fees for current games operating in Virginia, and the appropriate agency to oversee enforcement of the state’s gaming laws.

As of Wednesday (January 18), Kilgore’s bill had yet to be assigned to a committee.

Currently, mobile sports betting, historic horseracing machines, horseracing, casino gaming, lottery games and various forms of charitable gaming are legal in the Commonwealth, while there are an estimated 14,000 unregulated and untaxed grey market games operating in Virginia.

Asked by VIXIO GamblingCompliance if Republican Governor Glenn Youngkin supported the bill, spokeswoman Macaulay Porter instead stressed the governor’s commitment to tackling illegal gambling.

“The governor has asked stakeholders to come to the table and work on legislation that would crack down on illegal gaming,” Porter said Wednesday in a statement.

Last month, Greenville County Circuit Court Judge Louis Lerner declined to dismiss the lawsuit claiming the state’s ban on skill-game machines violates free speech, while also rejecting the argument that lawmakers violated the Virginia Constitution by adding legislation to last year’s state budget that reinforced the ban.

Instead, Lerner delayed the proceedings until April or May due to Stanley’s involvement in the case. His status as a sitting lawmaker comes with the privilege of letting him postpone court dates when the legislature is in session in Richmond.

The Virginia legislative session convened on January 11. Lawmakers are only in session for 45 days in odd-numbered years, making passage of Kilgore’s bill a challenge.

Gaming Bills In Committee

On Wednesday, Virginia state Senator Jeremy McPike, a Democrat who chairs the Committee on General Laws and Technology subcommittee on Gaming, postponed a hearing on Senate Bill 780 until next week.

The bill would amend state law dictating which cities in Virginia are eligible to host casinos, allowing Petersburg the opportunity to host a public referendum on a $1.4bn casino proposal by The Cordish Cos. before nearby Richmond could hold a second vote on its own casino project.

Richmond voters narrowly defeated a referendum in November 2021 that would have allowed Urban One to build a $565m casino-resort. According to the 2022 biennium state budget, Richmond is barred from holding another casino referendum until November.

Democratic Representative Joe Morrissey, whose district includes Peterburg and parts of Richmond, co-sponsored the bill after a similar measure he supported last session failed.

In a letter to the eight members of the Richmond delegation on January 6, Mayor Levar Stoney stressed his opposition to Morrissey’s measure.

“I adamantly oppose any legislation that constricts the rights of Richmond to have a resort casino,” Stoney wrote. “My Richmond City Council colleagues also stand firm in preserving and defending Richmond’s authority to hold a casino referendum in 2023.”

McPike also referred Senate Bill 1143 to the Senate Rules Committee for its consideration. That bill, introduced by McPike, would transfer regulatory control of charitable gaming and historical horseracing from the Department of Agriculture and Consumer Services and the Virginia Racing Commission, respectively, to the Virginia Lottery.

If approved, the Virginia Lottery would be renamed the Virginia Lottery and Gaming Department. In addition, the Virginia Lottery Board would be renamed the Virginia Lottery and Gaming Oversight Board and would be required to adopt regulations regarding the licensure and operations of historical horseracing devices.

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