U.S. Courts Rule Skill Games Illegitimate in Virginia, Following Similar Disputes Nationwide
Revamped Discourse:
Skill game machines, similar to real money slots, have stirred quite a commotion, particularly in Virginia. Last year, the Old Dominion State banned these machines, but former Governor Ralph Northam postponed the ban to assist with COVID-19 relief. Truck stop owner and former NASCAR driver Hermie Sadler, however, challenged this move in court.
In Dec. 2021, Greensville County Judge Louis Lerner sided with Sadler temporarily. The judge issued an injunction to keep the existing machines operational while the lawsuit unfolded. However, the Virginia Supreme Court, in an unusual step, intervened and declared that the lawsuit was unlikely to succeed due to changes in the legal definition of skill games this year. The judges were also doubtful about invoking the First Amendment in this case, stating that gambling is heavily regulated as an exercise of the Commonwealth's police powers.
The Supreme Court's decision reinstated the ban on Oct. 13, 2022. Despite this, the lawsuit is set to go to trial in December and remains unaffected by the Supreme Court's decision.
Skill Games: A Token of Confusion
At first glance, skill game machines might resemble real money slots. The manufacturers subtly integrate skill components to argue that these activities fall outside of gambling laws, which often include a "games of chance" phrase.
In Virginia, players must identify and select winning lines themselves, and slots and skill games differ markedly in terms of regulation. While slot machines are taxed and governed, skill games exist in a legal loophole with little oversight. Opponents claim that such games are devoid of responsible gambling features, placing vulnerable gamblers at risk.
Skill games share a spotlight with "pick'em" fantasy products this year, another fuzzy legal area hinging on the distinction between luck and skill. The operators of these DFS platforms, like PrizePicks and Underdog Fantasy, assert that the bets are skill games, not gambling.
Politicians and regulators view these assortment of skill-based products as illegitimate gambling, but bans or regulations face resistance from certain circles. The ultimate decision, then, often hinges on the courts.
Recently, Michigan banned DFS prop-style bets, as the Michigan Gaming Control Board maintains they imitate sports betting. Meanwhile, Florida served operators a cease and desist letter, implying these bets are gambling.
Parallel Predicaments: Kentucky and Pennsylvania
Skill game machines can be found in numerous states, with Kentucky, Pennsylvania, and South Carolina grappling with thorny questions this year. Kentucky outlawed the terminals as of July 1, amidst a lawsuit launched by one of the largest manufacturers, Pace-O-Matic (POM).
POM and other plaintiffs, including small business owners, question the constitutionality of the Kentucky bill, accusing the state of due process, equal protection rights, and free speech violations. The lawsuit's progress remains unreported.
Interestingly, POM clinched a legal victory in Pennsylvania earlier this year. A judge ruled that machines manufactured by POM were illegally seized by the District Attorney's Office in Monroe County, deciding that they qualify as skill games and are therefore legal in the state.
Pennsylvania's lawmakers are in disagreement regarding how to address skill games. Senator Gene Yaw's bill aims to regulate them, while others call for a formal ban like Kentucky and Virginia.
- In the ongoing debate about skill game machines, such as real money slots, the question of responsible gambling is a significant concern, especially when it comes to games lacking safeguards against vulnerable players.
- The legality of skill games, including pick'em fantasy products, is often a contentious issue in politics, with operators arguing they are skill games while regulators and politicians view them as a form of gambling, leading to court battles that ultimately decide their fate.
