The troubled Virginia skill games industry has become an unexpected ally in the fight against COVID-19.
In the commonwealth, Queen of Virginia Skill & Entertainment manages a whopping 5,700 games that resemble slot machines.
Under the new tax system for the contentious games, the company has recently disclosed that it has amassed over $6.8 million in revenue within its initial month.
The majority of the revenue will be allocated by Virginia officials towards combating the coronavirus within the state’s borders.
About the Virginia skills game tax
In April, Virginia Governor Ralph Northam proposed the introduction of a fresh state tax on skill games, which was later approved by the General Assembly. Nonetheless, Northam specified that this tax system would only remain in effect for a maximum of one year.
Following the General Assembly’s initial attempt in March to completely ban skill games, a new temporary tax plan has been introduced. These games can be found in around 2,000 establishments in Virginia, including restaurants, bars, truck stops, and convenience stores.
What prompted legislators to seek the ban initially?
They held the belief that electronic games function within a ambiguous realm, straddling the line between illicit games of chance and permissible games of skill.
According to operators, the legality of these games is justified by the reliance on a player’s skill. On the contrary, critics argue that the skill required and its influence on the game outcomes are frequently insignificant.
Moreover, lawmakers were concerned that the games might diminish the profits of the Virginia Lottery, which plays a crucial role in funding K-12 public education in the state of Virginia. In the most recent fiscal year, the lottery managed to generate an impressive $595.3 million in revenue on its own.
In light of the COVID-19 pandemic, which posed a risk to Virginia’s tax revenue in 2020, Northam took action to introduce a fresh tax on skill games. Consequently, game distributors are now obligated to pay a monthly tax of $1,200 per machine.
Under the legislation, the COVID-19 Relief Fund in Virginia receives 84% of the tax-generated revenue, while the remaining funds are allocated for localities hosting the games and Virginia’s Problem Gambling Treatment and Support Fund.
It has been announced that Queen of Virginia, a subsidiary of Pace-O-Matic Inc. headquartered in Atlanta, has generated over $5.7 million towards pandemic relief efforts and contributed more than $825,000 to support local economies in Virginia through the implementation of a new tax.
Queen of Virginia proud of its tax bill
July served as a preliminary audition for the role of Queen of Virginia.
The gaming company had previously advocated and aspired to be recognized as a lawful and controlled type of gambling. Nevertheless, within the one-year break imposed by the governor, it demonstrated its ability to genuinely generate substantial income for Virginia.
Nevertheless, when the company first launched its operations in Virginia, it did so without any legal framework or support from legislators. As a result, the lawmakers at that time disregarded the company’s request for regulation.
Virginia’s skill games industry is about to face significant competition as the commonwealth has recently passed legislation legalizing sportsbooks and casinos in the state.
It is anticipated that the initial Virginia sportsbook will be available online by early 2021. Following that, the first out of five possible Virginia casinos is projected to commence operations in 2025.
The VA skill games industry remains optimistic about the possibility of legalization, placing its hopes on the upcoming General Assembly session in Virginia scheduled for January.
According to Aubrey Layne, Virginia Secretary of Finance, he informed the Richmond Times-Dispatch that the upcoming tax on skill games is projected to yield approximately $120 million within the next year.
Layne commended Queen of Virginia for adhering to the legislation, stating, “It’s commendable that they are following the guidelines outlined in the legislation.” He further added, “The revenue generated will be utilized effectively, as these funds are crucial for addressing the challenges posed by COVID-19.”
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