Virginia legislators OK bill to legalize skill game betting machines

RICHMOND, Va. — Virginia lawmakers passed legislation Friday that would legalize skill games, the slots-like betting machines that proliferated in businesses around the state before an on-again, off-again ban took effect.

If signed by GOP Gov. Glenn Youngkin, the bill would tax and regulate the devices, which are also known as gray machines because of the murky area of the law in which they previously operated.

The legislation was supported by a well-organized coalition that involved skill game developer Pace-O-Matic and business owners who have hosted the games and shared in their profits. Even critics said they were moved by the testimony of the business owners, many of them first-generation Americans, who said the machines had been a lifeline for their restaurants, convenience stores and gas stations, especially during the pandemic.

“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,” said Rich Kelly, a restaurateur and president of the Virginia Merchants and Amusement Coalition, which formed to advocate for legalization of the machines.

The arcade-style games, which other states are also grappling with, look similar to slot machines but involve an element of skill, according to their manufacturers.

Opponents of legalizing them said doing so would represent a massive expansion of gambling in Virginia, which they argued could result in harm for children, low-income people and those struggling with gambling addiction.

Legalization was also opposed by other players in the gambling industry, including casinos, which have donated generously to Virginia lawmakers in recent years, as has Pace-O-Matic.

“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,” Virginians Against Neighborhood Slot Machines, a group formed to lobby against the legislation, said in a statement.

The legislation, which was filed after a similar effort failed last year, would cap the number of games allowed at each ABC-licensed retail establishment at four; 10 machines would be allowed at truck stops. That is closer to the five- and 10-machine limits contained in the original industry-backed bill than some stricter versions of the legislation as it went through the process.

Receipts from the machines would be taxed at a 25% rate, higher than the original bill’s 15%.