Virginia's slot-style "gray machines" no longer legal

As of July 1, the so-called “gray machines” located on the way out of convenience stores, truck stops and a host of other retail establishments with Virginia ABC licenses to sell beer, wine and other alcoholic beverages, are no longer legal to operate in Virginia, and the Alcoholic Beverage Control Department and its board is promising to crack down on any licensed establishment that does not get rid of them.

The slot machine-style games are known as “gray machines” for skirting the state’s still viable anti-gambling laws, and began popping up about three years ago, Richmond Free Press reports.

Various companies put thousands of the “skill” games in convenience stores in the state. The machines were modified to require an extra press of the button to operate.

The Virginia General Assembly was poised to outlaw the machines in 2020, but bent to Gov. Ralph S. Northam’s suggestion to allow them for one year. The governor also won support for imposing a hefty $1,200-a-month tax on each machine to raise money to cover expenses related to COVID-19.

The tax raised $150 million in the 2020-21 fiscal year, the state reported. But that was not enough to halt the current ban on the machines. Both the governor and state legislature refused to approve any extension for their continued use.

As sales of gasoline, candy, crackers and other items have sagged as people stayed home since the March 2020 start of the pandemic in the state, some stores found the returns from the machines, even with the tax, enough to keep their doors open. Several operators said the loss of the machines would force them into bankruptcy because their regular operations do not generate enough revenue.

The prohibition already has drawn a long-shot lawsuit and a cry of discrimination from Asian-American store operators, though legal experts believe there is little likelihood of any legal challenge having much success. The Asian American Business Owners Association is asking Virginia Attorney General Mark Herring to investigate what they call racial discrimination by the state in banning electronic skill games in stores they own that are frequented by racial and ethnic minorities.

State leaders, who heard such arguments while considering whether to extend the legality of the machines, have been adamant that these machines are to go.