Virginia players who find pleasure in Virginia’s “gray machines” may soon find themselves donning black attire as they grieve the recent changes made to a bill aimed at addressing the issue of unregulated gambling devices.
Virginia Governor Ralph Northam has officially approved an updated edition of Virginia House Bill 2168. This revised legislation includes a fresh provision, known as section 18.2-331.1, which reinstates the state’s prohibition on the usage of devices commonly referred to as “gray machines.” These devices had previously operated within a legal gray area.
Lawmakers in 2020 made it clear that the machines were prohibited, but offered a one-year grace period to operators who needed time to gather funds for COVID-19 relief efforts. These operators, mostly small-business owners, had placed the machines resembling slots in various establishments such as convenience stores, bars, restaurants, and truck stops across the commonwealth. These machines had a disputed element of “skill” in the game that had previously allowed them to bypass legal restrictions.
However, starting from July 1, the reprieve will come to an end. Rogue operators will now be subject to significant fines and may potentially face more straightforward convictions due to the recently modified bill.
Fines set at $25K each for unregulated gambling devices
After the July 1 deadline, operators of gray machines will be subject to fines of up to $25,000 for each of their unregulated gambling devices. These fines will be in addition to any other penalty prescribed by existing law.
According to the bill, an operator is defined as:
“Any individual, company, or group of individuals engaged in, funding, overseeing, directing, or possessing ownership of an illicit gambling enterprise, activity, or operation.”
The definition is clearly broad, which could potentially put owners, managers, and other employees at risk of facing legal consequences.
Additionally, in relation to law enforcement, the revised HB 2168 grants them increased flexibility in pursuing the individuals responsible. The Virginia Alcoholic Beverage Control Authority (Virginia ABC), responsible for overseeing Virginia gray machines, expressed concerns about the industry’s excessive growth, which has hindered effective enforcement measures.
Nevertheless, the revised legislation presently states:
The attorney general, an attorney representing the commonwealth, or an attorney representing a specific locality, has the authority to initiate legal action in equity on behalf of the commonwealth or the relevant locality. This legal action aims to prevent the operation of a gambling device that violates the provisions of this section. Additionally, the attorney may request the seizure of all such devices and any funds contained within them. Furthermore, they are entitled to seek a civil penalty of up to $25,000 for each device involved.
In addition, the state or local agency is eligible to receive reimbursements for reasonable expenses associated with the investigation and preparation of the case, as well as attorney fees.
Put simply, going rogue could pose significant challenges and costs.
Where money from civil penalties goes
Virginia is estimated to have around 15,000 gray machines spread across its territory.
The exact number of unregistered machines with the ABC remains unknown due to many operators neglecting to register them. Nonetheless, it is highly probable that if you travel on an interstate in Virginia and disembark at any exit, you will come across gambling devices in at least one retail store.
Nevertheless, some operators failed to comply with the registration requirements or treat the one-year reprieve seriously. Consequently, these operators may face civil penalties upon being apprehended.
However, the destination of the $25,000 fines and other monetary penalties is outlined in HB 2168.
- The Literary Fund receives civic penalties that are collected on behalf of the commonwealth.
- Any fines collected in the name of a specific locality will be deposited into that locality’s general fund.
Virginia’s big shift to regulated gambling
In recent years, Virginia has experienced a significant increase in its gambling industry despite a previous lack of legal options.
In 2021, Colonial Downs is making a comeback with live horse racing, while Historical horse racing (HHR) continues to gain popularity. Additionally, charitable gaming remains a prominent activity throughout Virginia.
Furthermore, online lottery play has contributed to the Virginia Lottery’s remarkable increase in lotto sales over the past years. In addition to this, the VA Lottery has taken on the responsibility of regulating Virginia sportsbooks, which were introduced in January.
Opening as early as next year, the initial Virginia casinos are set to commence operations. Major casino-resort projects have been recently sanctioned in four cities, while the residents of Richmond, the capital of Virginia, will have the opportunity to decide on their own casino project in November.
Lawmakers aim to prioritize legal and regulated options, urging a crackdown on illegal wagering taking place at unregulated establishments.
An “unregulated location” under HB 2168 refers to any location that is not subject to regulation or operation by:
- Virginia Lottery
- Virginia Lottery Board
- Charitable Gaming Board under the Department of Agriculture and Consumer Services
- The Virginia Alcoholic Beverage Control Authority can be rewritten as the Authority for Alcoholic Beverage Control in Virginia.
- Virginia Racing Commission
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