Status Of Unregulated Gambling Devices No Longer Gray After VA Enacts Ban

Written By Dann Stupp on April 14, 2021 - Last Updated on August 2, 2023

Players who enjoy “gray machines” might soon be wearing black as they mourn a newly amended bill to combat the unregulated Virginia gambling devices.

Gov. Ralph Northam has signed an amended version of Virginia House Bill 2168. The new section, 18.2-331.1, reenacts Virginia’s ban on the devices, which are also called “gray machines” because they had operated in a gray area of the law.

In 2020, lawmakers explicitly banned the machines but gave a one-year reprieve to their operators to raise funds to combat the coronavirus. Mostly small-business owners, they had installed the slots-like machines in convenience stores, bars, restaurants and truck stops throughout the commonwealth. The devices include a debatable “skill” aspect of the game that previously allowed them to skirt the law.

Now, though, the reprieve ends on July 1. And rogue operators will face hefty fines and possibly easier convictions because of the newly amended bill.

Fines set at $25K each for unregulated gambling devices

Following the July 1 deadline, gray machine operators will face fines of up to $25,000 for each of their unregulated gambling devices, in addition to any other penalty that current law provides.

The bill defines an operator as:

“any person, firm or association of persons, who conducts, finances, manages, supervises, directs or owns all or part of an illegal gambling enterprise, activity or operation.”

It’s obviously a broad definition. It also could leave not only owners but also managers and other employees in potential jeopardy with law enforcement.

And speaking of law enforcement, amended HB 2168 also gives them more latitude to pursue the operators. The Virginia Alcoholic Beverage Control Authority (Virginia ABC), which oversees Virginia gray machines, said the industry had grown too large to adequately enforce.

However, the amended bill now says:

“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 this section and to request an attachment against all such devices and any moneys within such devices … and to recover the civil penalty of up to $25,000 per device.”

They can also “recover reasonable expenses incurred by the state or local agency in investigating and preparing the case, and attorney fees.”

In other words, going rogue could be a massively difficult and expensive endeavor.

Where money from civil penalties goes

According to the best estimates, approximately 15,000 gray machines have proliferated throughout Virginia.

Because many operators never registered the machines with the ABC, the true number isn’t known. However, if you drive on an interstate in Virginia and hop off any exit, you’re likely to find some of the gambling devices in at least one retail outlet.

However, not all of them took the registration requirements/one-year reprieve seriously. As a result, those same operators could be subject to civil penalties once caught.

But where will those $25,000 fines and other monies go? According to HB 2168:

  • Civic penalties that are collected under the name of the commonwealth go to the Literary Fund.
  • Fines that are collected under the name of a locality will be paid into the general fund of that locality.

Virginia’s big shift to regulated gambling

Despite a former absence of legal gambling options, Virginia has become flush in recent years.

Historical horse racing (HHR) is spreading, and live horse racing is back in 2021 at Colonial Downs. Charitable gaming remains a fixture throughout VA.

Additionally, the Virginia Lottery has posted record lotto sales in recent years, thanks in part to Virginia online lottery play. The VA Lottery also recently began regulation of Virginia online sportsbooks, which launched beginning in January.

The first Virginia casinos will begin opening as soon as next year. Four cities recently approved major casino-resort projects, and voters in the Virginia capital of Richmond will decide on their own in November.

Lawmakers want the focus to remain on these legal and regulated options. That means a clampdown on illegal wagering at unregulated locations.

With HB 2168, an “unregulated location” means any location not regulated or operated by:

  • Virginia Lottery
  • Virginia Lottery Board
  • Department of Agriculture and Consumer Services/Charitable Gaming Board
  • Virginia Alcoholic Beverage Control Authority
  • Virginia Racing Commission
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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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