Virginia law enforcement will be granted the necessary authority to effectively crack down on the operators and illegal gambling machines.
The operators of these “gray machines” were given a chance to operate legally, albeit temporarily. Nevertheless, what are the consequences when they choose not to abide by the regulations?
Throughout the commonwealth, law enforcement had been grappling with that particular issue.
SB 1465ER, which recently passed in the Virginia General Assembly, addresses the same concern. The bill is currently awaiting the governor’s decision on whether to sign, veto, amend and return it to the General Assembly, or let it become law without his signature.
The illegal gambling problem in Virginia
Virginia lawmakers granted operators of the commonwealth’s “skill games” a one-year exemption in 2020. These gaming devices function similarly to conventional slot machines but possess a disputable element of “skill,” which had previously enabled them to operate in a legal gray zone.
This is why they are called “gray machines”.
Last year, lawmakers in Virginia made the decision to take strict action against these machines. However, before that, they granted a temporary relief by opting to regulate the machines for a period of one year. Around 15,000 of these unregulated machines were functioning across Virginia prior to the onset of the COVID-19 pandemic a year ago. These machines were commonly found in bars, restaurants, gas stations, convenience stores, marinas, truck stops, and other small businesses.
Following the reprieve, a total of $70 million has been allocated to Virginia’s COVID-19 relief fund and local governments situated in the vicinity of the machines. To comply with regulations, operators were required to register these machines with the Virginia Alcoholic Beverage Control Authority (Virginia ABC). Additionally, they were obliged to pay a monthly tax of $1,200 per machine, and were limited to installing a maximum of eight machines at a single location.
The issue lies in the Virginia ABC’s inability to adequately enforce the necessary measures. According to Sen. Bryce Reeves (R-Fredericksburg), who proposed SB 1465, the predecessor to SB 1465ER, in an interview with WAVY.com, this is a significant concern.
According to Virginia ABC, the rapid proliferation of these gaming machines has overwhelmed us, making it impossible for us to keep up with them due to limited resources. The manufacturers of these machines aggressively distribute them by approaching small businesses and persuading them to host the machines, promising minimal effort on their part, simply requiring power and internet access at the end of each month.
Empowering VA law enforcement to act on gray machines
Under the new legislation, local authorities have been granted the power to oversee non-compliant game operators. Illegal gaming operators may face fines of up to $25,000 for each offense.
Below are the contents of the two bills:
Any person who operates a gambling device in an unregulated location may be penalized up to $25,000. The Attorney General, attorney for the Commonwealth, or attorney for any locality can file a lawsuit to stop the operation of such devices and seize any money within them. Civil penalties paid in the name of the Commonwealth will go to the Literary Fund, while penalties paid in the name of a locality will go to the general fund of that locality.
Queen of Virginia Skill & Entertainment, the biggest operator in Virginia, is in favor of the legislation. They believe that rogue operators should face consequences if they choose to maneuver outside the rules, as long as their own operators are abiding by them.
However, there is a possibility that Queen of Virginia’s reign may come to an end. The temporary permission for regulated gray machines is scheduled to end on July 1, and attempts to prolong it have been unsuccessful. With the opening of Virginia casinos expected next year and the initiation of VA sports betting already in progress, the future of Queen of Virginia seems uncertain.
The availability of these recently legalized gambling options will eliminate any ambiguity surrounding the gray machines.
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