Virginia lawmakers in 2020 gave mom-and-pop stores one more year to operate skill-based slot machines. Now that year’s about up, and the machines – called “gray machines,” because they fall under a gray area of law – could soon be illegal. This is despite the fact that in 2020, the state legalized gambling at retail casinos on a larger scale, the first of which will open in 2022.
Virginia Gov. Ralph Northam, his aides say, intends to ban games of skill at any “unregulated location” on July 1. An unregulated location, by the state’s definition, includes any place not regulated or operated by the Virginia Lottery, Virginia Alcoholic Beverage Control Authority, Racing Commission, or other relevant agencies.
Northam just last week struck language from a bill passed by the 2021 Virginia General Assembly that some say would extend the operation of gray machines into 2022. The change is also expected to affect charitable gaming operations like bingo and raffles.
Regulation Of Gray Machines
It was Northam who last year proposed keeping the devices in place temporarily to help cash-strapped Virginia small businesses and boost tax revenue. Approximately $70 million in state revenue has come from more than 10,000 registered machines over the past eight months.
But not all operators have been obeying the rules, say regulators. There are numerous machines in operation that aren’t registered and therefore aren’t taxed. Such illegal operations are cheating the state out of $1,200 a month in tax revenue.
The Virginia General Assembly will have a chance to agree to Northam’s amendment. Input is also expected from any of 11 or more skill-game lobbyists that have kept up with the flow of legislation regarding gray machines since at least 2020.
A statement released last month from Queen of Virginia Skill & Entertainment – the largest skill-game supplier in the commonwealth – indicated support for the continued operation of regulated skill games. The company said revenue provided by the games helps small businesses stay open and will be a $140 million money-maker for the state by July 1.
Banning regulated games will only lead to illegal games that provide no collective benefit, the company said, adding: “Most restaurants and bars will not break the law by placing illegal games in their businesses. Instead, they will simply suffer financially.”
It’s an interesting turn in a state that recently legalized retail casinos, which won’t open until 2022 at the earliest, and online sports betting, which launched in January 2021. This means that all gaming would be regulated and controlled by the Virginia Lottery.