The thousands of slot machine-like skill games in Virginia restaurants and convenience stores will no longer be sanctioned by the state come July 1. State legislation introduced last week would keep them legal for another year.
After nearly banning the skill games last year, Virginia lawmakers are considering a 12-month extension of a reprieve that allows thousands of the terminals to remain in restaurants, convenience stores and truck stops across the state.
At a food donation giveaway organized by the industry’s operators, Richmond Mayor Levar Stoney said permitting skill games for another year could help localities that are worried about potential budget cuts and other financial challenges as tax income from restaurants, hotels and concert venues crater.
“We want to avail ourselves to other streams of revenue,” Stoney said in a Jahnke Road church parking lot where Queen of Virginia Skill & Entertainment was giving out more than 500 hot meals Monday afternoon.
Queen of Virginia, an operating arm of Atlanta-based game manufacturer Pace-O-Matic, manages more than 5,000 machines across 1,600 locations in Virginia, which is about 54% of the number in the state, according to company officials.
Jeanna Bouzek, general manager for Queen of Virginia, said the industry has generated about $68 million for the state COVID relief fund since July. She said the industry is on track to earn $140 million for the state, with 12% staying in localities where the machines are located.
Del. Paul E. Krizek, D-Alexandria, introduced a bill last week to extend the moratorium by one year to July 1, 2022, but there may not be immediate consensus, as Gov. Ralph Northam has said would not support allowing skill games beyond this summer.
Lawmakers voted in March to ban the electronic skill games, but later agreed to allow the industry to operate until July 1, 2021, subject to a tax that would generate money for the new state COVID-19 relief fund and local governments.
A Northam spokeswoman said Monday that his position had not changed.
The terminals are sometimes called “gray machines” because they operate in an area between illegal games of chance and legal games of skill.
Charlottesville’s commonwealth’s attorney deemed the games illegal in 2019. Queen of Virginia filed a civil suit against the prosecutor, but dropped the complaint over the summer.
If extended, skill game distributors would continue to pay a monthly tax of $1,200 for each of its terminals in use. About one-third of the revenue would be directed to localities, with 60% dedicated for a state transportation fund.
The remaining revenue would go to other state funds to offset state costs and to combat problem gambling and family crises, according to the bill.
As state officials consider the moratorium, other gambling and gaming businesses are looking to Virginia as it relaxes its laws to allow sports betting and casinos in select localities.
Expanded gambling options and skill games could generate approximately $500 million in state tax revenue annually, but a 2019 Joint Legislative Audit and Review Committee report notes that it could increase the public risk of harm from problem gambling.
The report says various professional studies estimate that 5% to 10% of adults may experience gambling problems, such as financial instability and family troubles, in states with broad gaming options.
Queen of Virginia has been involved in a series of food distribution events around the state similar to the one on Jahnke Road, where several nearby businesses offer its skill games. Bouzek said the company paid the owners of the Exxon Jahnke Road Service Center to furnish the meals as a way to help both the business and surrounding community.
Stoney was not the only politician at the event as it got underway Monday. Del. Betsy Carr, D-Richmond, said she was pleased to see the company supporting businesses and residents in her district, but remains undecided on whether to support an extension of the moratorium.
Stoney, whose administration is also seeking voter approval in a referendum this fall to permit a casino resort in the city, said he hopes to see other state lawmakers support allowing skill games for at least another year.
“Obviously, we’ll ask [Northam] to reconsider and ask the legislature to lean on the governor as well,” he said.