Virginia lawmakers dodge questions on whether budget might include new policy on skill games

Budget leaders in the Virginia General Assembly won’t say if they’re considering changing the state’s contested ban on slots-like skill machines through the budget, despite that possibility already convincing a judge to order a lengthy delay in a lawsuit seeking to overturn the ban.

Last month, lawyers challenging the ban as unconstitutional pointed to the legislature’s ongoing special session and unfinished budget to argue the case should be delayed until all sides know what the state’s official policy on skill games will be. But the General Assembly’s budget negotiators won’t even say whether skill-games are part of their discussions.

“Let’s keep ’em guessing,” House Appropriations Chairman Barry Knight, R-Virginia Beach, said Tuesday when asked for a response to the claim the budget could include a revised policy on skill games, either to tighten the existing ban or to lift it.

Knight insisted the budget will get done and said “fine-tuning” is underway.

“In negotiations, I don’t comment on anything,” Knight said. “That’s how I work a negotiation.”

Asked about potential skill games changes Tuesday after a meeting in Richmond, Senate Majority Leader Dick Saslaw, D-Fairfax, one of the 14 legislators working on the state budget, deferred to Senate Finance Chairwoman Janet Howell, D-Fairfax. Howell did not attend Tuesday morning’s Senate Finance Committee meeting, and she did not respond to an emailed request for comment Monday. In an email, a Senate budget staffer said “budget negotiations are ongoing.”

As Virginia recently relaxed laws to allow more types of state-sanctioned gambling, skill games have become a perennial point of contention. Usually found in convenience stores, sports bars and truck stops, they function similarly to chance-based slot machines but involve a small element of skill that allows backers to argue they’re more akin to traditional arcade games. Most machines involve slots-like reels and spins, but players have to slightly adjust the squares up or down in order to create a winning row of symbols.

Proponents insist the games are legal and give small Virginia business owners a piece of an industry dominated by big casino interests. In 2019, the chief prosecutor in Charlottesville concluded that they amount to illegal gambling devices, and critics have accused the industry of exploiting loopholes to set up a lucrative gaming enterprise that rapidly grew with minimal regulatory oversight.

After a one-year period of regulation and taxation to raise money for a COVID-19 pandemic relief fund, the critics won out in the General Assembly, with a ban on the machines taking effect in July 2021. But a Southside business owner who filed a lawsuit with the assistance of Sen. Bill Stanley, R-Franklin County, successfully won a court injunction late last year barring enforcement of that law until his legal challenge is resolved. After Stanley wrote a letter pointing to the special session and unfinished budget talks as a reason to delay a hearing scheduled for May 18, the judge overseeing the case postponed the hearing until Nov. 2. The order also prohibited the state from enforcing the ban against thousands of previously regulated skill machines until November. The order doesn’t apply to machines that weren’t fully legal before the ban took effect, a distinction sowing confusion for local officials trying to sort out what’s allowed and what’s not.

In recent social media posts, the plaintiff challenging the ban, truck stop owner and former NASCAR driver Hermie Sadler, said the delay was requested because “legislators are threatening to now try to ban or legislate skill games through the budget.”

“So we need to know what we are fighting against,” Sadler said in a message posted to Twitter last week in response to a Virginia Mercury article about the delay.

Skill-game supporters have claimed the ban was driven by other gambling interests who want to clear out smaller competitors to make more money for themselves. As the gambling turf wars continue in Richmond, some local governments are frustrated by the lack of clarity on whether the state is or isn’t banning the machines.

“It’s created chaos,” said Franklin City Manager Amanda Jarratt.

Jarratt said her city has been dealing with crime and other disturbances associated with the machines, but has gotten little help because there’s no regulatory agency in charge of them. Virginia ABC had temporary oversight of the machines starting in 2020, but that ended when the ban took effect last year and ABC no longer had legal responsibility over gaming machines in ABC-licensed businesses.

“It continuing to drag on over months is only making the situation worse and leaving localities in a difficult position,” she said, adding her city simply doesn’t have the staffing power to try to figure out which machines are operating legally and which are illegal. “You want to be fair to the business owners, but you also need to look out for the best interest of the locality as a whole.”

Jarratt said she’d like clearer direction on whether the state is going to allow the machines or not.

If a new skill-game provision is put into the state budget, it would still need to win approval from the full General Assembly. But with the clock ticking to pass a budget before the fiscal year ends June 30, it’s unclear how open party leaders would be to changes to whatever deal budget negotiators present as the final product of months of work.

Knight offered little clarity on whether skill games are even a live issue. He also seemed to caution against putting too much stock into what people say they’re hearing about the budget.

“I heard that we were going to do the budget today. I heard we were going to do it on the 24th. I heard we were going to do it on the 27th. I’ve heard June the first. I’ve heard a lot of things,” Knight said. “But as far as I know, the only people that know are maybe a few budget conferees. And we’re not talking. Because we’re working to get things right.”