Virginia skill gaming machines officially became illegal in the commonwealth on July 1, 2021.
The ban on the terminals came after the state allowed the controversial devices to operate legally for a little more than a one-year period amid the COVID-19 pandemic. The temporary allowance of skill gaming was to help brick-and-mortar businesses, including convenience stores, bars and restaurants, and truck stops offset revenue losses caused by the coronavirus.
Those same small business owners are now reporting a severe reduction in overall revenue, as their skill gaming terminals are turned off.
“Sales have dropped,” Keyur Patel, owner of the Virginia Food Mart in Richmond, recently told WRIC. Patel explains that the customers who were lured into the store to play the machines ended up also purchasing snacks and beverages.
Patel claims his store’s revenue has dropped 25-30 percent since the skill games were powered down. One state lawmaker believes he has a solution — more gaming.
Video gaming terminals, or VGTs, mimic the operations of a traditional slot machine. They’re taxed and highly regulated.
Seven states currently permit VGTs outside of casinos — Illinois, Louisiana, Oregon, Pennsylvania, South Dakota, West Virginia, and Georgia. Virginia Sen. John Bell (D-Prince William County) wants his home state to become the eighth.
Bell has proposed allowing small businesses in Virginia to place a small complement of VGTs into their establishments.
After visiting Illinois and meeting with business owners who have VGTs and state officials and gaming regulators, Bell reported to the Senate Committee on Laws and Technology that VGTs are vastly different than the divisive skill gaming machines.
It’s a game of chance. You have to be 21 to play, and it’s very regulated,” Bell explained of Illinois’ requirement that VGTs be housed in an area partitioned off from the rest of the business.
Conversely, Virginia skill gaming machines were open to anyone 18 and older, and went unregulated and untaxed prior to the 2020 law. From April 2020 through July 2021, small business paid the state $1,200 per skill gaming terminal. Businesses, manufacturers, and distributors split the profits.
“What are we going to do for all those small businesses that had grey machines and lost that revenue? This is a way to help them out,” Bell opined.
Bell’s proposal, however, didn’t gain much traction during the 2021 legislative session. But the state politician says he plans to reintroduce the matter in January 2022.
VGT Casino Impact
Not everyone is on board with Bell’s VGT mission. Some say the state should first proceed with the four commercial land-based casinos already in the works. A fifth could come by way of Richmond.
The American Gaming Association reveals that VGTs can damper gaming revenue at brick-and-mortar casinos.
“Commercial casinos in Illinois have reported a decline in revenue from electronic gaming devices each year since video gaming terminals were launched at bars, truck stops, and other convenience locations starting in 2012,” the AGA explains.
VGTs were also quicker to bounce back from the pandemic than casinos.
“While Illinois commercial casinos saw revenue fall precipitously in 2020, VGT electronic gaming devices in bars and other convenience locations reported a record quarterly revenue total in the third quarter once bars and restaurants were permitted to reopen,” the AGA adds.