‘Directly conflicting’ Virginia bills could mean more chaos in charitable poker fight

The Virginia General Assembly has passed lots of legislation on charitable gaming lately. So much, in fact, that a state senator now claims his colleagues passed a law that accidentally canceled out a different law approved two weeks earlier.

The legal sleuthing by Sen. Chap Petersen, D-Fairfax, could potentially upend the General Assembly’s efforts to block charitable poker games and strip the state’s Charitable Gaming Board of its regulatory power after conflict of interest concerns.

Petersen sponsored a 2020 law that legalized charity Texas Hold ‘em poker tournaments. In his practice as a private attorney, he’s representing charitable gaming clients hoping to benefit from that law.

In a revived legal challenge recently filed in Virginia Beach, Petersen argues the state must restart the suspended charitable poker program under rules the Charitable Gaming Board adopted in 2020. Petersen also says the board, an industry-driven panel that’s been criticized for mishandling conflicts of interest, wasn’t actually stripped of its power after all. 

Both claims are built on the idea that the General Assembly and Gov. Glenn Youngkin inadvertently repealed a bill they wanted to pass, creating a “fundamental misunderstanding” of the law.

“I’ve been doing this 22 years,” Petersen said in an interview last week. “I don’t think I’ve had a situation quite like this.”

Lawyers for the state argue it’s Petersen who’s misunderstanding the law. If Youngkin wants to repeal something the General Assembly passed, the office of Attorney General Jason Miyares wrote in its response, “he must do so openly.”

“Fortunately, Virginia law operates precisely as the General Assembly and the Governor expect it to, and the Plaintiff’s argument, although creative, is simply incorrect,” the state said in a filing seeking to have Petersen’s new claim dismissed.

An old industry tries to expand

Once the only form of legal gambling in Virginia, charitable gaming began in 1973 with bingo halls that dedicated a cut of their proceeds to charity. But the industry has pushed to expand into slots-like electronic gaming machines and poker as Virginia has authorized sports betting, casinos and slot parlors connected to horse racing. 

That expansion has brought more scrutiny from lawmakers and questions over whether some in the industry are using a veneer of charity as legal cover for loosely regulated, for-profit gambling ventures.

How the industry should be governed became a major point of contention after the Charitable Gaming Board tried to adopt poker rules that state regulators with the Virginia Department of Agriculture and Consumer Services felt were designed to maximize profits at the expense of state oversight and adherence to what the General Assembly intended.

The legislature tried to stop the rollout of charitable poker last year by stopping the board-written regulations from taking effect and blocking the issuance of any poker licenses. Members of the Charitable Gaming Board, including Chairman Chuck Lessin, opened unlicensed poker rooms anyway.

The poker rooms are now shuttered. But Petersen says they shouldn’t be, because the state never properly killed off the controversial 2020 regulations, which he says remain in effect.

Petersen’s new argument centers on two bills approved this year that dealt with the same Virginia code section on charitable gaming. Gov. Glenn Youngkin signed one, Senate Bill 402, on April 11. The other, Senate Bill 403, was approved on April 27. 

The earlier bill took away the Charitable Gaming Board’s power to adopt new regulations in an attempt to rein in a board many lawmakers felt had essentially gone rogue. The second bill didn’t align with the first, because it instructed the same board to adopt regulations the General Assembly requested to tighten oversight of electronic charitable gaming machines.

Both bills can’t be valid, Petersen argued in the new legal filing, because they have “directly conflicting text.”

“There is no way they can be reconciled,” he wrote. He contends the most recently approved bill prevails because it “self-repealed” the earlier one with language that “amended and reenacted” the code section.

The result, Petersen says, is that Youngkin’s office essentially restored the charitable gaming industry to full strength by not conforming the two bills to match.

“The governor has the top legal minds in Virginia surrounding him,” Petersen said in what sounded like a joking tone. “I cannot believe they would’ve done this inadvertently or mistakenly. I can only imagine it was one of the most brilliant maneuvers in the history of the Virginia legislature.”

Youngkin’s office declined to comment.

In an Oct. 19 letter to the attorney general’s office drawing attention to the “immediate issue” with the law, Petersen acknowledged Virginia courts don’t presume a law was repealed when that’s not the clear intent of the text. However, Petersen claims the bills can’t be legally “harmonized” due to conflicting text about who’s in charge of charitable gaming.

A spokeswoman for  Miyares  declined to comment on the pending litigation. In their court filing, state lawyers said both bills can stand, because they were intended to do different things.

“To hold that SB403 could make a sweeping repeal of a law passed just weeks earlier all without any language on its face that announced to legislators or the public that it was doing so is an absurd result,” wrote Assistant Attorney General Erin McNeill.

‘The walls feel like they’re closing in’

The amended lawsuit is an effort to revive an earlier challenge brought on behalf of Billy the Kidden, a Virginia Beach-based animal rescue hoping to get revenue from charity poker, and companies affiliated with the Beach Poker Room in Virginia Beach. 

Kitten rescue lawsuit fails to save Virginia’s charity poker industry

Despite the failure of Petersen’s earlier lawsuit and the state-ordered shutdown of charity poker rooms on July 1, the Beach Poker Room briefly reopened in September. It remains unclear how the operation managed to evade the $50,000 fines the General Assembly enacted to force the poker rooms to cease operations until they were properly licensed and regulated.

A new hearing in the case has been set for Dec. 7, and the outcome could fundamentally alter the power dynamic between the Charitable Gaming Board and the Virginia Department of Agriculture and Consumer Services, which works with the board to oversee charitable gaming. The power the General Assembly meant to take away from the board was given to VDACS, leaving the board as an advisory body that could no longer order VDACS to carry out its wishes.

The new relationship between the agency and the board created some uncomfortable moments at a recent board meeting. Board members complained new rules the agency had drafted for electronic gaming machines were too strict. They also implied the agency doesn’t understand the industry as well as the board does.

Lessin, the board chairman who runs Pop’s Bingo in South Richmond, said it felt like the state was moving to end the industry altogether.

“The walls feel like they’re closing in,” Lessin said.

“Why have a board?” asked Vice Chair Amy Solares, who has a bingo hall in Virginia Beach. “How do we give you our advice?”

VDACS Commissioner Joseph Guthrie, a Youngkin appointee who said he attended the meeting as a gesture of goodwill under the “new paradigm,” said he wants the industry to continue helping charities on a “long-term basis.”

“I am here and I am listening,” Guthrie said.

Responding to complaints the industry was being harshly treated by tighter controls on money from electronic gaming machines, Justin Bell, a lawyer from the attorney general’s office, assured the board state officials are simply following the General Assembly’s decisions.

“It’s just what the code says, man,” Bell said.