Virginia Governor Proposes Amendments to Skill Games Bill

Virginia Governor Glenn Youngkin has introduced amendments to a bill aimed at regulating slot-like skill games just ahead of a constitutional deadline on Monday night. The proposed changes to the legislation, sponsored by Sen. Aaron Rouse (SB 212), have sparked anticipation among lawmakers and stakeholders in Virginia's gaming industry.

The specifics of Youngkin's amendments remain undisclosed, though they are expected to be unveiled soon through the legislative information system. The bill, categorized under “amended bills,” seeks to legalize skill games in various establishments such as convenience stores, restaurants, and truck stops.

 

The Key Movements

1. Proposed Amendments: Governor Youngkin introduces modifications to legislation aimed at regulating slot-like skill games, addressing concerns over regulatory structures, tax rates, and public safety implications.
2. Legislative Process: The General Assembly will deliberate on the amended bill upon reconvening, with potential outcomes including acceptance, rejection, or further negotiation. The decision will significantly impact the future of skill game legalization in Virginia.
3. Economic and Social Implications: Advocates argue that the bill, known as the Virginia Small Business Economic Development Act, would support small businesses while generating substantial tax revenue for the state. However, concerns persist regarding the classification of skill games and their potential for contributing to gambling addiction.

 

Earlier on Monday, Governor Youngkin expressed his engagement in negotiations with bipartisan legislators regarding potential adjustments to the bill. Addressing reporters in Richmond, Youngkin emphasized the significance of the proposed modifications, citing concerns with the original legislation.

Youngkin's spokesman, Christian Martinez, highlighted the necessity of the proposed amendments, stressing their role in addressing concerns over regulatory structures, tax rates, machine numbers, and implications for public safety.

Following the submission of amendments, the General Assembly is poised to deliberate on the modified bill upon reconvening on April 17. The legislative body will resume negotiations and consider the governor's recommendations and vetoes for bills passed during the preceding session.

In the event that the General Assembly rejects some or all of the skill game amendments, Governor Youngkin will have the option to either sign or veto the bill. Approval of the bill would position Virginia as the second state to formally legalize skill game machines after Arkansas, which imposes an 18% privilege tax on net wagering revenues from such games.

However, failure to pass the bill would result in the continuation of a prohibition on skill games in Virginia, initially enacted in 2020.

The proposed legislation, known as the Virginia Small Business Economic Development Act, aims to establish a regulatory framework and tax structure for skill games. Advocates argue that the bill would support small businesses while generating an estimated $200 million in tax revenue for the state.

SB212 outlines registration requirements for the distribution, operation, hosting, and playing of skill game machines. Additionally, it grants local authorities the authority to regulate the presence of skill game machines in their communities, including imposing limits on machine numbers and prohibiting their operation near certain establishments such as casinos, schools, and churches.

 

The bill proposes a 25% tax on gross receipts from each skill game machine, with proceeds primarily allocated to the PreK-12 Priority Fund. It mandates the Virginia Lottery Board to promulgate regulations by Jan. 1, 2027, and authorizes provisional registration by the Virginia Alcoholic Beverage Control Authority starting Jul. 1, 2024.

Despite the legislative progress, the classification of skill games as a legal form of gambling in Virginia remains contentious. While proponents argue for the distinction between skill games and traditional slots based on player interaction, experts on gambling addiction assert that skill games can lead to dependency akin to conventional slot machines, based on data from the state's problem gambling hotline.