Kentucky Skill Games Ban Remains in Effect as County Judge Rejects Pace-o-Matic’s Arguments

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Skill games will remain illegal in Kentucky for now, as a county judge sided with the state in a lawsuit challenging the ban’s constitutionality. The plaintiffs included skill game manufacturer Pace-O-Matic and the owners of small businesses that benefited from hosting the devices before they were outlawed.

Pace-o-Matic sells its devices for use in multiple states and has been on both sides of lawsuits regarding their legality. In Pennsylvania, for instance, it has prevailed as the defendant against claims that its machines fall under the definition of gambling devices. In Kentucky, the situation is different, as the state passed a bill explicitly banning the devices rather than relying on existing gambling laws.

Kentucky lawmakers passed the skill games ban in March 2023, and the law came into effect that July. When Gov. Andy Beshear signed HB 594 into law, he said he was pro-gambling but that any sort of gambling, including skill games, requires regulation.

Pace-O-Matic and its allies deny that the games constitute gambling. Although they resemble slot machines, they incorporate elements of skill, while legal definitions of gambling typically hinge on the phrase “games of chance.”

Judge Says Lawmakers Acted Within Their Duties

In their suit, the plaintiffs claimed the law violated their constitutional rights in several ways. The list of alleged violations included due process, equal protection, and free speech. Representing the state, Kentucky Attorney General Russell Coleman argued that it’s the state’s responsibility to protect its residents from the “gray machines.”

Franklin County Circuit Judge Phillip Shepherd sided with Coleman, making a summary judgment in favor of the state. He said that determining gambling policies, regardless of a skill component, is part of the General Assembly’s fundamental role. According to the Associated Press, in his ruling, the judge wrote:

It was entirely unreasonable, based on Kentucky’s long history of regulating gambling … for an investor to expect that any machine operating on the fringe zones of legality as a gambling device would be exempt from subsequent regulation or prohibition by the Legislature.

He added that the ban was a “lawful exercise of the Legislature’s police power to regulate gambling for the legitimate governmental interest in addressing the social harms of unregulated forms of gambling.” The judge also ruled that the plaintiffs failed to prove HB 594 violated the constitutional right of free speech by targeting Pace-O-Matic’s game “Burning Barrel.”

He said the law didn’t target the game based on its “expressive content” but rather because of its gambling-like features.

Game Manufacturers Are Not Giving Up Yet

After the verdict, J. Guthrie True, an attorney for the plaintiffs, said in an emailed statement to the Associated Press that his team would evaluate the ruling. The plaintiffs may appeal in the hopes of overturning Judge Shepherd’s ruling. However, the Kentucky Supreme Court has typically supported the state’s hardline approach to gambling issues.

Another skill game manufacturer, Prominent Technologies, has taken a different line in response to last year’s ban. In March, Louisville Public Media reported that new types of machines are starting to appear at gas stations across the state. Howard Greer, Prominent Technologies’ Director of Compliance and Government Affairs, told the news outlet that the machines skirt the ban because they’re considered “no-risk” games.

The “no risk” machines are visually similar to skill games or slots. However, rather than incorporating a skill element, the machine tells the player ahead of time what the result of the next spin will be. According to Prominent Technologies, that means there’s no chance involved and no risk to the player. However, that argument considers each play of the device in a vacuum. In practice, players will pay for a losing spin to see if the next one is a winner. So, over the course of a session, the gameplay experience is very similar to a slot machine.

Skill Games’ Future is Also Uncertain in PA and VA

Skill game machines are also a hot topic in several other states. Most recently, Pennsylvania and Virginia have been moving in opposite directions on the issue.

In October, the Virginia Supreme Court deemed skill games illegal. As with the Kentucky ruling, the court rejected the idea that free speech protections are relevant.

A few months later, Virginia lawmakers introduced two separate bills to legalize the machines. One of them, introduced by Sen. Aaron R. Rouse, passed in the General Assembly in March. However, Virginia Governor Glenn Youngkin rejected the proposal.

Youngkin demanded amendments to impose stricter regulations and higher taxes. The Senate was unwilling to accept the Governor’s changes, so he vetoed the bill for a second time, leaving the machines illegal for now.

Conversely, in Pennsylvania, the courts have sided with skill game proponents, ruling that they’re not gambling devices. The Pennsylvania Supreme Court declined to hear an appeal from state authorities defending the seizure of the machines.

Pennsylvania lawmakers are divided on how to proceed with skill games, with some wanting regulation and others favoring a ban. Part of the complexity is that Gov. Josh Shapiro is in the pro-regulation camp, while his Attorney General Michelle Henry supports a ban.

About the Author

Chav Vasilev

Chav Vasilev

After years of managing fast-casual restaurants, Chav turned his passion for sports and occasional slot wins into a career as an iGaming writer. Sharing his time between Europe and the US, he has been exposed to betting and gambling for years and has closely followed the growth in the US. Chav is a proponent of playing responsibly and playing only at legal online sites. When not writing, you will find him watching and betting on sports, especially soccer, or trying to land the next big bonus on a slot.
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