The Bulletin

Virginia suit over skill games set for trial two and a half years after it was filed

By: - July 28, 2023 1:51 pm

Skill games in a Richmond corner store. The games popped up in gas stations, convenience stores and bars around the state before they were outlawed. (Ned Oliver/Virginia Mercury)

The long-running lawsuit over Virginia’s ban on slots-like gaming machines will be decided in a three-day trial the week before Christmas, according to a new court schedule laid out Friday.

Lawyers for the two sides held a conference call Friday with the retired judge overseeing the case, but officials at the Greensville County Circuit Court said the telephone meeting was not open to the public. After the status conference, online court records for the case were updated to reflect the schedule the parties apparently agreed to Friday.

In a statement Monday morning, Pace-O-Matic, the parent company of prominent Virginia skill-game enterprise Queen of Virginia, said the judge had also extended a prior court order allowing the games to continue to operate without interference from state or local authorities.

“We anticipate that the final court ruling will uphold the legality of our games,” said Pace-O-Matic spokesman Michael Barley. “In the meantime, we are urging lawmakers to regulate and tax the industry to support small businesses, increase tax revenue and help law enforcement put an end to illegal gaming. We look forward to working with the legislature to pass commonsense regulation on skill games.”

So-called skill machines, which proponents say don’t count as a type of gambling because they have a small element of skill that makes them different from traditional slot machines, have been a perennial sticking point for Virginia policymakers as the state has legalized more types of gambling. The General Assembly voted to ban the machines in 2021, but the industry has mounted a largely successful legal challenge that led retired Judge Louis Lerner to block the state from enforcing the ban through an injunction issued in December 2021.

That injunction was temporary, but the slow progression of the case has given the skill-game industry substantially more time to profit from machines that are now completely unregulated and don’t produce any state or local gaming taxes. Skill-game companies have made substantial political donations in Virginia to both Republicans and Democrats.

Supporters of skill games say they give small business owners a chance to benefit from the state’s looser approach to gambling instead of allowing big casinos to dominate the industry. The legal challenge — brought by Southside Virginia truck stop owner Hermie Sadler with assistance from Sen. Bill Stanley, R-Franklin, and attorneys working with Queen of Virginia —argues the ban violates free speech by singling out a particular type of video game based on the machines’ mostly aesthetic resemblance to slots.

Lawyers from the office of Attorney General Jason Miyares argue the ban falls well within the state’s power to regulate gambling because, unlike other video games, skill machines offer cash payouts to winners. Critics of skill machines have also cast doubt on the industry’s claims that exceptionally skilled players can always win money, because the machines’ profitability relies on players putting more cash into the machines than they get out.

The trial is scheduled for Dec. 18, Dec. 19 and Dec. 20.

The lawsuit was filed on June 21, 2021.

This story was updated after publication to include a statement from Pace-o-Matic, the parent company of Queen of Virginia.


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Graham Moomaw
Graham Moomaw

A veteran Virginia politics reporter, Graham grew up in Hillsville and Lynchburg, graduating from James Madison University and earning a master's degree in journalism from the University of Maryland. Before joining the Mercury in 2019, he spent six years at the Richmond Times-Dispatch, most of that time covering the governor's office, the General Assembly and state politics. He also covered city hall and politics at The Daily Progress in Charlottesville.