Bill to Prohibit Operation of Gray Machines Across Kentucky Clears House Committee
These controversy-laden gaming gizmos, often labeled as skill games or gray games, are the target of a fresh bill aiming to prohibit them in Kentucky. The proposed legislation, House Bill 594, advanced through the House Licensing, Occupations, and Administrative Regulations Committee after a heated discussion that spanned over an hour.
State Rep. Killian Timoney (R-Nicholasville) sponsors the bill and seeks to ban gaming machines produced by companies such as Pace-O-Matic and Prominent Technologies. Officials in high-level roles connected to these machines could face fines reaching up to $25K if detected in the state beyond the set deadline for shutdown.
Kentucky has a solid tradition of gaming regulation, and Timoney emphasized the need to continue this effort by outlawing illegal gaming machines and defining what type of games are legal.
The debate over these machines follows Timoney’s bill aiming to ban them passing in both chambers. However, the House failed to approve the Senate's amendment that protected amusement games before adjourning.
HB 594 Protects Amusement and Fair Games
Filed by Timoney on February 22, HB 594 considered amusement games. Collaborating with the National Retail Federation, venues like Chuck E. Cheese and Dave and Busters, and the Kentucky State Fair Board, Timoney and legislative leaders revised the bill to safeguard games like Skee-Ball and ring toss.
Even the University of Kentucky voiced concerns, pressing for language to protect its eSports program and racetracks which run historical horse racing (HHR) parlors. The bill, though not preferred by racetracks, does not face their opposition.
The revised version removed the emergency clause from the bill. This change means that the bill—once approved by Gov. Andy Beshear (D) or a veto override by the General Assembly—would take effect in 90 days instead of immediately.
Charitable Organizations Feel the Impact
Kentucky law permits three types of gaming: charitable gaming (such as bingo and raffles), pari-mutuel wagering on horse races and HHR machines, and the state lottery.
The horse racing industry supports the ban on gray games, and they're not alone. Charitable gaming operators have informed lawmakers that their efforts have suffered from the arrival of the machines.
Larry Arnett, representing several state veterans organizations, told lawmakers that groups like the American Legion, AMVETS, the Marine Corps League, and the VFW have traditionally raised millions for civic purposes like disaster relief, church donations, and youth sports team sponsorships. However, these fundraising endeavors have plummeted by about 50% due to the adoption of gaming machines.
Small Businesses Express their Concerns
The hearing room was packed, which necessitated an overflow area for spectators visiting the state Capitol.
Many supporters of the Kentucky Merchants and Amusement Coalition (KY MAC) were present, wearing green t-shirts. They were not hesitant to vocalize their opinions, often responding to lawmakers or proponents of the ban.
Michael Barley, Pace-O-Matic's chief public affairs officer, felt the bill required “duct tape and baling wire” to secure the required votes. Bill opponents argued that skill games offered players a chance to win back 104% of their wager, provided they had memorization skills and hand-eye coordination.
These machines have become vital for mom-and-pop gas stations, convenience stores, bars, and restaurants that have signed agreements with game manufacturers and distributors. The typical business earns around $30K annually from these games.
‘We are Legal’
Bob Heleringer, representing Prominent, informed committee members that the company had sent introductory letters to officials in all 120 Kentucky counties, seeking approval to operate the machines in their jurisdictions. Heleringer said only two counties rejected the company’s request.
“We are legal,” Heleringer asserted. “If we were not legal under the laws that you have written, you would not have a bill here to make us illegal. OK, follow the logic on that. Our company came in here under laws that you passed. It says if you’re a game of skill, you’re not illegal gambling. And we’ve relied on that.”
Apart from HB 594, House Bill 525 has also been filed in this year’s session, advocating for regulation and a 6% tax on the machines.
Bill HB 525 was designated to the House Appropriations and Finance Committee, essentially placing it in a "bill limbo" as legislative authorities are reportedly leaning towards a ban.
Deputy Chair of the Committee, Tom Smith (R-Corbin), had submitted a bill earlier in the session aimed at establishing a similar commission. However, gaming providers voiced their opposition to the 26% tax proposed in Smith's bill. Close to a third of the collected tax funds, as Smith clarified to , would have been allocated to county sheriffs to cover an unfunded mandate the legislature passed the previous year, requiring school resource officers.
Bipartisan Support and Dissent
The vote resulted in a 13-7 decision, with party members from both sides contributing to the "Yes" and "No" votes. Ten Republicans and three Democrats voted in favor of the bill, while six Republicans and state Rep. Nima Kulkarni (D-Louisville) voted against it.
Kulkarni's district encompasses Churchill Downs' racetrack. She commented, "We've previously talked about promises to return and regulate and tax. I'm not interested in penalizing small business owners in my district, or those in the Commonwealth, just so a corporation can acquire a bigger slice of the pie."
Smith also voiced his opposition to HB 594, referring to it as the "Kill Bill" following the meeting.
Several lawmakers from both parties indicated they might switch their vote on the House floor.
Among those Democrats voting for the bill was state Rep. Al Gentry (D-Louisville), who had previously voted against it. He expressed the need for the state to focus on expanding gaming initiatives to draw tourists, which implies casinos in densely populated regions.
The bill could hit the House floor as early as Friday if lawmakers hold their session, but Timoney informed reporters afterward that this isn't anticipated.
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