Virginia Governor’s Amendments Return Skill Game Bill to General Assembly for Further Consideration

Following the recent legalization of slot machine-like games of skill in Virginia, the 2024 General Assembly session is currently home to the debate over Senate Bill 2012, passed to legalize electronic skill games. The bill proposed by state Sen. Aaron Rouse referred to as Rouse’s Bill, has recently passed the Senate on a 31-9 vote to propose a 25% tax onset for electronic slot machine operators in the state. The amendment filed by Gov. Glenn Youngkin anticipating the tax increase to 35% has reportedly triggered the battle of words in the General Assembly.

Senate Bill 2012 a.k.a.Rouse’s Bill:

According to the Richmond Times-Dispatch (RTD), the state of Virginia has come a long way in passing the bill to legalize slot machine-like games of skill typically located at gas stations, truck stops, retail stores, restaurants, and other facilities. Rouse’s Bill reportedly includes a set of regulations and taxes and Youngkin’s amendments seem to ”toughen” the state control over these operations, according to RTD, as the increased tax rate would increase the costs of small businesses and provide grounds for local authorities to ban the machines after some of these reportedly failed to do so back in 2020.

State Sen. Aaron Rouse, who sponsored Senate Bill 2012, reportedly said that the governor’s amendments “are a slap in the face to thousands of Virginia small businesses.”  As reported, Rouse will bring forward his arguments against the amendments on 17 April 2024, when the General Assembly continues the session.

Amended License Fees:

In addition to the tax rate amendment to 35%, Gov.Youngkin’s amendments reportedly anticipate that the machines shall return 80% of the stake and that the maximum payout shall be set at $500. The amendments also allow local authorities to arrange a referendum on banning electronic machines in their respective jurisdictions. Further, the amended legislation would request significantly higher license fees. As reported by RTD, convenience stores would see the fee increased from $250 under the Rouse’s Bill to $9,000 under the new legislation, with truck stops to be bound with a $21,000 license fee. Game manufacturers would pay $250,000 annually, the license fee reportedly excluded from the Rouse’s Bil 7BALL CX l.

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Additional Limitations:

Compared to Senate Bill 2012, which was sponsored by Rouse, there are additional limitations regarding the number of games allowed at stores and truck stops and the ratio between the retail store’s total revenue and gaming revenue. As reported, such gaming revenue cannot exceed 20% of the total gross revenue of the facility hosting slot machine-like electronic skill games.

Appointing New Regulator:

Finally, the skill games would be regulated by The Virginia Lottery rather than the Alcoholic Beverage Control Authority,  according to RTD, to include a centralized monitoring system. As the opponents argue that the amendments would shut down multiple convenience stores in the state, Gov. Youngkin reportedly said that the amendments “represent necessary changes and the added protections to the legislation address his serious concerns with the regulatory structure, tax rates, the number of machines, impact on the Virginia Lottery and broader public safety implications of the proposal.”

On the other hand, Rouse said that the amended bill “demonstrates why [Gov.Youngkin] has failed to produce a single bipartisan deal this session,” according to RTD. “My co-sponsors, our bipartisan coalition, and I will work together to make sure the harmful provisions put into place by Governor Youngkin do not advance, and we will do everything possible to make the interests of small businesses – not casinos or massive out-of-state corporations – a priority,” Rouse reportedly said.