Va. Senate rejects effort to keep skill games and tax them to fund schools

Sen. Bill Stanley, R-Franklin. (Photo by Ned Oliver/Virginia Mercury)

The Virginia Senate chose to stick with its pending ban on electronic skill games after a Republican lawmaker tried to give the embattled and unregulated industry new life as a source of dedicated school funding.

On Monday, Sen. Bill Stanley, R-Franklin, tried to tie skill games to a bill he’s sponsored that deals with funding sources for public school roofs. Instead of just talking about the need to fix up the state’s school buildings, Stanley said, why not create a new source of tax revenue that could provide up to $500 million over five years?

“We have a complex problem and I’m trying to fix it,” Stanley said. “And here is the simplest fix.”

Stanley proposed a floor amendment that would have allowed charitable entities to operate up to four skill games in any restaurant or bar, but not in convenience stores. Profits from the machines would be taxed at 25 percent, with that revenue going to a new Public School Assistance Fund.

However, most senators appear to have concluded that the best fix for skill games is to just get rid of them. The Senate rejected Stanley’s effort in a 24-15 vote.

“At this point, I think the proper thing is a total ban,” said Sen. Janet Howell, D-Fairfax.

A restaurant on Main Street in Richmond around the corner from Capitol Square advertises Queen of Virginia Skill, a subsidiary of Georgia-based software maker Pace-O-Matic, which has won ABC approval and argues its games are the only legal varieties in Virginia. (Ned Oliver/Virginia Mercury)

Queen of Virginia, a leading skill-game company that has an estimated 7,500 machines statewide, is heavily lobbying to try to prevent the legislature from pulling the plug on its industry.

Both chambers are finishing up their work ahead of Tuesday’s crossover deadline, when House and Senate bills must be sent to the other body.

The House of Delegates has already voted 80-15 to ban skill machines. The Senate is scheduled to take a final vote Tuesday on its bill to ban the games.

“These machines, to me, are the electric scooters of the gaming industry,” said Sen. John Cosgrove, R-Chesapeake, referring to companies that drop scooters on city sidewalks before regulations can be passed to manage them.

Stanley suggested that, if the legislature proceeds with its ban, it could draw a lawsuit that might allow the machines to remain a while longer without the state getting money from them.

“You better believe that,” Stanley said. “Because there’s a property interest in these stores that have these gray machines.”

Cosgrove said the machines belong to the companies that make them, not the businesses that host them.

“They can have their machines back,” Cosgrove said. “No problem there.”