The Virginia Supreme Court has reinstated the ban on electronic skill games, making them illegal once more. This ruling reverses an earlier injunction by a lower court that had stalled the enforcement of the ban, permitting thousands of the machines to operate at convenience stores, gas stations, bars, and truck stops.

The injunction had been issued amid an ongoing lawsuit that argued that the ban violates free speech. In its decision to revive the ban, the state’s highest court said that it is highly unlikely the lawsuit on the grounds of free speech will succeed, given that the lower court ‘abused its discretion.’ Three Supreme Court judges made this ruling on October 13 at the court building in Richmond.

Free Speech Defence for Skill Games

Virginia’s ban on slot-like skill games means that SB 971, passed during the 2020 session, is now in effect. The bill was passed by legislators in the Virginia General Assembly in 2020 and has since faced much opposition, including a lawsuit. SB 971 categorized skill games that offer some form of reward under illegal gambling.

Several efforts have been made to regulate and potentially bring in tax income from the skill games, but the continued tussle between the state and small businesses has led to a standoff. As such, this delayed the regulation process even further. The Virginia Merchants and Amusements Coalition (VAMAC), a new lobbying organization launched by Virginia small business owners, has advocated for keeping skill games in the state. According to them, operating skill games at various authorized locations has been vital in the state’s post-covid recovery.

Local businesses viewed the initial attempts to ban skill games through legislation as an assault on their rights to freedom. This argument formed the basis for the Sadler Brothers Oil lawsuit, filed by truck stop owner and former NASCAR driver Hermie Sadler. Despite the Supreme Court’s claim that the odds of winning the suit are slim for the Sadler Brothers, Greenville County Judge Louis Lerner, who issued the injunction in favor of the plaintiffs, is confident there is hope for a victory. This is because of the First Amendment protections, which, he reasons, have been violated.

In Sadler’s argument, skill games should be treated as free speech since they include storylines much like slot machines. These include ghost stories, pirate adventures, and dragon hunting, among others. Lerner remarked:

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“Whether we are residents of Emporia, Greensville, or Hampton, or in these United States of America, the First Amendment exists,”

Sadler has also come out to express his disappointment with the ruling, saying:

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“What’s not being talked about is how today’s order impacts the rights of small businesses in Virginia. It’s the main reason I filed [the lawsuit]. It’s tough.”

Justices Teresa M. Chafin, Stephen R. McCullough, and Wesley G. Russell Jr. noted that the verdict was not to restrict the games’ messages (i.e., free speech). Instead, the promise of a reward at the end was the main point of contention. The Supreme Court order reads in part:

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“Although at times it is difficult to determine where a particular activity falls on the speech/conduct continuum, no such difficulty is present when the activity being regulated is gambling. We long have viewed gambling as conduct that may be heavily regulated and even banned by the Commonwealth as an exercise of its police powers.”

Additionally, a footnote in the court’s order explained:

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“If criminalizing promises of monetary winnings as determined by the outcome of a game violated free speech rights, the Commonwealth would be unable to prohibit unregulated bookmakers from taking bets on sporting events or citizens from running private ‘numbers’ games because such activities involve the same basic premise.”

Gaming Machines for Non-Compliant Operators to be Seized

Skill game operators who continue with operations after the ruling will soon have their gaming machines seized as soon as the ban is enforced. Pace-O-Matic, the software company behind the skill games and a plaintiff in the Sadler Brothers suit, has come out to strongly condemn the Supreme Court’s decision, announcing that it is reviewing the verdict. Pace-O-Matic spokesperson Christina Freundlich made the statement, saying that the company’s lawyers were in the process of going through the court’s opinion before considering what comes next.

As with any legislative-related matter, supporters of the ban agree with the court’s order, citing the lack of regulatory oversight over the period the machines have been allowed to operate. To them, the skill games pose a risk to the public as they are gambling devices running under a guise that makes regulation tricky. Victoria LaCivita, the spokeswoman of Attorney General Miyares, noted:

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“Virginia has regulated gambling for centuries, and the skill games law is an ordinary exercise of the General Assembly’s authority to protect the public from dangerous gambling devices. The law is now in effect, and Commonwealth’s attorneys are free to enforce it.”

Skill Games Vs. Traditional Slot Machines

The controversy with skill games starts with the fact that they are very similar to slot machines, often featuring identical gameplay and themes to the latter. However, unlike slot machines, operators do not want them categorized as gambling based on skill.

In short, slot machines don’t require the player to be acquainted with the game as the outcome of each play is determined by random number generators, hence chance. On the other hand, skill games require the player to have some knowledge of the game beforehand. This led to legal challenges as the games operated in a grey area, remaining outside the purview of gambling regulations and, therefore, almost impossible to regulate.

The reinstatement of the ban on electronic skill games by the Virginia Supreme Court marks a significant development in the ongoing debate surrounding these controversial gaming machines. The ruling underscores the importance of robust legal frameworks to address emerging technologies and their impact on communities. The Sadler Brothers Oil case will go to trial in mid-December at the Greenville County Circuit Court, and both proponents and opposers of the ban are waiting with bated breath for what comes out of the case.