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Kentucky Governor Signs Bill to Outlaw ‘Gray’ Gaming MachinesBy Jeff Osienya Mar 26, 2023 LegalityKentucky has finally closed the door on illegal gaming machines after Gov Andy Beshaer rubberstamped a new bill to ban them within state lines, starting July 1st. This is the second state after Virginia to prohibit the gaming machines formally.
Governor Andy Beshaer has finally put pen to paper on House Bill 594, which prohibits gaming establishments from hosting ‘gray machines’ in the Bluegrass State. The bill was sponsored by State Rep. Killian Timoney (R- Nicholasville) and will see the untaxed machines slowly fade into oblivion within the confines of the state. The bill successfully cleared the senate on a landslide 29-6 margin and will come into effect from July 1st.
Under the bill’s provisions, anyone found to own, operate, finance, supervise or manage such a machine will be liable to a fine of $25,000 by the state. This fine collected will go towards the running of the respective county where this offense has been committed. Speaking on these machines, the mover of this now successful bill Rep Timoney told Fox 19:Quote
“These machines represent the single largest gambling expansion in Kentucky history, yet they are unauthorized, unregulated, and unaccounted for. We must restore the proper order, empowering the legislature to lead by drafting the laws to precede the addition of gaming in the Commonwealth.”
He further went on to note that the bill was a combined effort from many interested parties, stating:Quote
“The bill represents hundreds of hours of effort by a number of stakeholders, as well as input from those for and against the proposal. We’ve talked to retailers and other business owners with machines as well as law enforcement, state regulators, and even the gray machine companies. Ultimately, we made the decision to ban them entirely.”
Gov Beshaer Expresses His Satisfaction in the Incoming Law
The Kentucky Governor believes it was the right decision to ban these machines from the state. Speaking during his weekly Capitol press conference, he noted:Quote
“I think it’s time that we had full-blown casinos in Kentucky, but it’s an industry that absolutely has to be regulated, and it needs to be legal. Gray machines are relatively unregulated, and I don’t believe they are legal. They came into Kentucky and set up and were taking dollars from Kentuckians and taking them out of state; with zero regulation, zero taxation, and zero help for those who may develop any issues using them.”
That said, Governor Beshaer insists on developing additional gaming options in the state. He also expressed remorse for the businesses likely to take a hit with the new legislation coming into law. He also expressed interest in setting up more streams of revenue gaming-wise, commenting as follows:Quote
“I hope in the future, whether it’s additional Kentucky Lottery offerings or others, we can do some things to replace some of that revenue and give people options if they want to use their entertainment dollars this way, but also benefits the commonwealth and that small business owner.”
The Controversy Behind these Outlawed Machines
The process leading up to the affixation of the governor’s signature on this bill has been bitter and expensive, pitting two very passionate sides who all believe they are right against one another. As a result, its supporters and opposers have spent considerable amounts of money to lobby for their sides.
Supporters of the ban claimed that these slot machines had transformed many kiosks in the state into small casinos. As such, they were abrasively skirting the law, which expressly did not give them the mandate to operate as casinos. There were also arguments that these machines would lead to widespread gambling in the state, leading to unrestrained pop-ups of gambling-related ills like problem gambling.
On the other side of the spectrum, there’s the argument that the impending closure of these machines will likely harm the business fortunes of establishments that host them. In its current form, the bill is seen as too harsh on the owners of such small businesses, whereas its earlier form sought to tax and regulate these gray machines. Now that the governor has okayed the sterner approach, these machines will soon be outrightly banned.
Some lawmakers who have been traditionally against gambling have even voiced the opinion that the bill is hypocritical. One of these lawmakers is Senator Whitney Westerfield (R- Crofton), who briefly commented:Quote
“I sure wish the passion for stopping these machines had been there two years ago.”
AGA Throws its Weight of Support Behind the Incoming Law
The American Gaming Association has also voiced its support for the ban on ‘gray’ machines, calling the move a ‘milestone victory’ for the legal wagering framework in the state. Moreover, the AGA particularly applauded the move by Kentucky as it is the only other state besides Virginia to take decisive action against this form of gambling. AGA CEO and President Bill Miller voiced his support, saying:Quote
“This win is a testament to what we can accomplish when we unite as an industry behind a common cause- and the American Gaming Association will use it as a springboard to pursue similar success in states throughout the country.”
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