Months-long legal wrangling

Virginia: Government, skill game industry's legal fight pushed back to December amid budget amendment dispute

Greensville County Circuit Court, Virginia.
2022-11-29
Reading time 2:18 min

Both the Virginia government and the skill-game industry have been filing reams of documents in the Greensville County Circuit Court over months of legal wrangling. The case, which touches on free speech, the nature of video games, and more, is based on whether skill games are a matter of chance or skill. The next hearing in the case has been scheduled for next month.

However, before the court gets to rule on the issue, the judge has to resolve the matter of whether the General Assembly’s move of tucking unrelated legislation into the state budget violates the Virginia Constitution, reports The Virginia Mercury.

Since 2021, skill machines, many of which have similar features to slot machines but require players to take some action to complete a winning pattern, have officially been banned in the state. However, the policy is proving difficult to execute due to strong opposition from the industry and its small-business allies, including truck stops, sports bars and convenience stores.

The legal challenge pending in Greensville, brought by Southside Virginia truck stop owner and former NASCAR driver Hermie Sadler, led to a temporary court injunction late last year blocking state officials from enforcing the ban. Sadler, who is now running for the Virginia Senate as a Republican, argues the ban is an overbroad and improper attempt to crack down on smaller local establishments that pose competition for big gambling interests.

According to Sadler and his allies, the law singles out a specific type of game they say isn’t all that different from anything found in an arcade. However, the state’s perspective is that skill machines pay out in cash or cash-equivalent credits, whereas successful play of regular arcade games might mean free plays, a plush toy, or redeemable tickets.

The state sees the unregulated machines as undercutting efforts of maintaining a safe gambling industry, posing a risk to Virginian players. But pro-skill parties argue the state targets certain games because of their aesthetic resemblance to slots, which they say is a free speech violation.

While the case was supposed to be heard in May, it was pushed back to November due to the correct assumption the General Assembly would try to toughen the ban through the state budget approved in June. However, the November date has also been pushed back, leaving the machines completely unregulated for at least another month.

The upcoming General Assembly session could complicate the case given Sen. Bill Stanley’s – Sadler’s attorney – status as a sitting lawmaker with privileges that let him postpone court dates when the legislature is in Richmond. 

The next hearing in the case is scheduled for December 5, when retired Judge Louis R. Lerner is expected to rule on the state’s latest effort to dismiss the legal challenge. And though the broader issue remains the distinction between games of skill and games of chance, the two sides are now also battling over the General Assembly’s effort to pass budget language with a direct bearing on the lawsuit, according to court records reviewed by The Virginia Mercury.

Stanley argues the General Assembly violated a constitutional rule requiring all bills to have “one object” stated in the legislation’s title. The pro-skill game team says the 2022 budget provision on skill games was a rushed attempt to broaden the reach of a law that carries criminal penalties. For their part, state attorneys say gambling policy is relevant to the budget because efforts to create a state-sanctioned gambling industry have a direct tie to tax revenues.

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