New Bill Makes Laws On Gray Gambling Machines More Black And White

Posted on March 12, 2021

Virginia law enforcement will have the latitude it needs to finally clamp down on illegal gambling machines and their operators.

Operators of these “gray machines” had an opportunity to go legit, at least temporarily. However, what happens when they don’t play by the rules?

That was the issue law enforcement had been dealing with throughout the commonwealth.

It’s also the issue that prompted the Virginia General Assembly to recently pass SB 1465ER. The bill now heads to the governor. He can now sign it, veto it, amend it/return it to the General Assembly, or simply decline to sign it and have it become law anyway.

The illegal gambling problem in Virginia

In 2020, Virginia lawmakers gave a one-year reprieve to operators of the commonwealth’s “skill games.” The gaming devices operate like traditional slot machines. However, they have a debatable “skill” aspect that previously allowed them to operate in a gray area of the law.

Hence the “gray machines” moniker.

Virginia lawmakers decided to crack down on them last year. However, first came a reprieve. They decided to regulate the machines for one year. Before the COVID-19 pandemic set in a year ago, approximately 15,000 of the unregulated machines were operating throughout Virginia. They were in bars, restaurants, gas stations, convenience stores, marinas, truck stops, and other small businesses.

Since the reprieve, $70 million has gone to Virginia’s COVID-19 relief fund, as well as to the local governments where the machines are located. Operators had to register the machines with the Virginia Alcoholic Beverage Control Authority (Virginia ABC). They also had to pay a monthly $1,200 tax per machine, and no more than eight machines could be installed in one location.

The problem is that the Virginia ABC can’t keep up with the needed enforcement. As Sen. Bryce Reeves (R-Fredericksburg), who introduced SB 1465, the predecessor to SB 1465ER, told WAVY.com:

“Virginia ABC is saying ‘We can’t (keep up), they’ve proliferated so much, we don’t have the resources and the ability to go after all of them.’ These [gaming] manufacturers shove these things out there. They go to a mom-and-pop store and say, ‘Hey put this in. At the end of the month. You don’t have to do anything but give us power and internet.'”

Empowering VA law enforcement to act on gray machines

The new bill gives local governments the jurisdiction to go over game operators who aren’t in compliance. Fines could reach $25,000 per offense for illegal gaming operators.

Here’s the text of the two bills:

Provides that any person who conducts, finances, manages, supervises, directs, or owns a gambling device that is located in an unregulated location is subject to a civil penalty of up to $25,000. The bill provides that the Attorney General, an attorney for the Commonwealth, or the attorney for any locality may cause an action in equity to be brought in the name of the Commonwealth or of the locality, as applicable, to enjoin the operation of a gambling device in violation of the provisions of the bill and may request attachment against all such devices and any moneys within such devices. The bill provides that any civil penalties brought in the name of the Commonwealth shall be paid into the Literary Fund and that any civil penalties brought in the name of a locality shall be paid into the general fund of the locality.

Virginia’s largest operator, Queen of Virginia Skill & Entertainment, supports the legislation. After all, if their operators are playing by the rules, they don’t want rogue operators to maneuver without consequences.

Still, even Queen of Virginia’s days could be numbered. The reprieve for regulated gray machines is set to expire on July 1, and efforts to extend it have fallen flat. Virginia casinos likely begin opening next year, and VA sports betting is already underway.

With these newly legal gambling options, there will soon be no gray area for the gray machines.

Photo by Brianbecker | Dreamstime.com
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Dann Stupp

Dann Stupp is a longtime sports journalist who’s written and edited for The Athletic, USA Today, ESPN and other outlets. He lives in Lexington, Virginia.

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