Kentucky's Gray Games Prohibition Bill Moves Towards Governor's Desk Following Swift Senate Endorsement
Once again, the Kentucky General Assembly has passed a bill aimed at prohibiting gray games, often referred to as gaming machines or skill games, similar to last year's attempt. This time, the bill, known as House Bill 594, will reach the desk of Gov. Andy Beshear (D).
The Senate voted 29-6 on Tuesday to pass this legislation, aiming to ban the controversial machines that have stirred debate over the past few years throughout the state.
Game developers like Pace-O-Matic and Prominent Technologies have set up their machines in nearly all 120 Kentucky counties. They argue they have secured approval from local authorities before collaborating with local businesses, such as convenience stores and restaurants, to install the machines in their establishments and share the revenues. They contend the machines are skill games because they require players to engage their memory and hand-eye coordination to win.
However, opponents from the horse racing industry and charitable gaming groups have spoken out against their presence, arguing the machines are indeed illegal. Those against the machines claim that the supporters only discussed regulation and taxation as a response to efforts to ban the games entirely.
Last year, both chambers approved a bill sponsored by state Rep. Killian Timoney, the Nicholasville Republican who also championed this year’s ban on the games. Yet, the Senate altered Timoney’s bill last year, and lawmakers failed to reconcile the bill before the session ended.
As this year’s bill now goes before Beshear, who has expressed support for the measure, it is expected to encounter a legal challenge from businesses that host the machines.
There is also the possibility that supporters in the legislature will return with a bill to regulate and tax the machines. Two House lawmakers presented such bills this year, but neither bill received a committee hearing.
Swift Senate Decision
The Senate moved quickly to handle the bill. The Licensing and Occupations Committee voted 8-2 on Tuesday morning to send HB 594 to the full body, which took it up shortly after.
The debate over the skill-or-gray distinction was generally less heated in the Senate compared to the House, where opponents to the ban initially succeeded in postponing the bill, only for supporters to revive it last week and pass it 64-32.
Nevertheless, even a supporter of the measure questioned the “hypocrisy” following the General Assembly's codification of historical horse racing (HHR) two years ago after a Kentucky Supreme Court ruling cast doubt on their legality.
“I sure wish the enthusiasm for stopping these machines had been here two years ago, because it is the exact opposite scenario,” state Sen. Whitney Westerfield, R-Fruit Hill, said on the floor while explaining his vote. “Instead of wanting to help an industry, we’re trying to stop an industry, and I don’t like either of the industries.”
The Kentucky Horse Racing Commission (KHRC) approved regulations for HHR machines in 2010. The commission subsequently sought a legal opinion to confirm its authority to allow tracks to host slot machine-like games that use previously run races to determine wager outcomes rather than a random number generator. Another difference between HHR and Vegas-style slots is that HHR machines are considered parimutuel wagering, which is allowed under Kentucky law.
Following the Supreme Court's September 2020 opinion, legislative leaders made a bill granting the KHRC the power to establish such games a top priority in the 2021 session.
Response After the Vote
After the Senate's vote, the Kentucky Merchant and Amusement Coalition (KY MAC), representing businesses that host the machines, issued a statement expressing its discontent.
“It's evident that certain lawmakers prioritize the demands of one constituent, Churchill Downs Inc., over the needs of thousands of their constituents who rely on the legal income generated by skill games,” KY MAC President Wes Jackson stated in the statement. “We are grateful for those legislators, both in both chambers, who voted against HB 594, standing up for Kentucky small businesses in the process.”
Prominent Technologies released a statement following the vote, stating they would not "abandon the fight for" Kentucky small businesses, reiterating their claim that the games are legal under Kentucky law.
At the same time, the Kentucky Equine Education Project (KEEP) thanked the lawmakers for taking action.
“KEEP, along with numerous other organizations, worked closely with legislators to ensure they understood the negative impact of illegal gray machines on families, communities, and on Kentucky’s legal forms of gaming,” the group said.
Timoney initially filed this year's bill with an emergency clause that would have made the law effective immediately, but this provision was removed in a House amendment, so if Beshear signs it, it would not become law until 90 days after the session ends on March 30.
