The North Carolina Court of Appeals has deemed skill game machines illegal. In a split 2-1 decision, the court ruled against game manufacturer No Limit Games, which challenged local and state law enforcement attempts to seize its machines in Robeson County.
North Carolina passed various laws banning video poker and slot machines in 2006, 2008, and 2010. However, some manufacturers, such as No Limit Games, have continuously found ways around the bans with the so-called “skill games.”
According to the manufacturers, while they visually resemble slots, skill game machines are not considered “gambling” because they include an element of skill. The legal definitions of the term include the phrase “games of chance,” so incorporating skill-based mechanics allows the machines to operate outside gambling regulations. In the machines offered by No Limit Games, players can “nudge” a symbol to form a winning combination or play a memory game for a chance to win.
The court deems the machines as games of chance
In May 2023, No Limit Games filed a complaint against local and state authorities who attempted to seize its machines. The company argued the attempts were illegal as its games are classified as video sweepstake machines, which are legal in the state. In June 2023, Superior Court Judge Michael Stone sided with No Limit Games and granted an injunction blocking the authorities’ seizure attempts. However, in September 2023, the appellate court issued a superseding injunction against Judge Stone’s order.
In the Dec. 31, 2024 decision, the court determined that the No Limit Games machines fall under the game of chance definition. Per the News & Observer, appellate court Judge Toby Hampson, with Judge April Wood concurring, wrote:
None of the Plaintiff’s attempts to distinguish its game from the similar games previously held by our courts to be illegal change the fact that chance is core to the game and always determines the amount a player can win.
The two judges determined that the skill elements were not much different from those in previous court decisions against other similar games. According to Hansen, the memory game component was impossible to win:
Giving players the option to complete an impossible task to receive an advantage in a game is effectively the same as having no dexterity element, because no amount of skill will make a difference in the outcome of the game.
The dissenting judge, Judge Jefferson Griffin, agreed with the lower court’s decision. He felt that the element of skill was enough for the games to fall under legal terms. No Limit Games plans to appeal the appellate court decision. The next step would be the North Carolina Supreme Court, which can choose whether to hear the appeal.
Kentucky and Virginia also banned skill games
If the North Carolina Supreme Court sides with the appellate court or refuses to hear No Limit Games’ appeal, the state would join others, such as Kentucky and Virginia, which have also banned them.
Kentucky lawmakers passed a law banning skill games in March 2023, effective in July 2023. Pace-O-Matic, a prominent manufacturer of skill game machines, challenged the law, but a county judge sided with the state in 2024. However, that ruling hasn’t stopped manufacturers from introducing new types of games while appealing the ban.
In October 2023, the Supreme Court of Virginia deemed skill games illegal. This led to lawmakers introducing two bills to legalize the machines, with one passing in the General Assembly. However, Virginia Governor Glenn Youngkin rejected the bill. Instead, he proposed amendments with stricter regulations. After the Senate rejected his proposals, Youngkin vetoed the bill for a second time, leaving skill games illegal in Virginia.
Pennsylvania is divided on how to treat skill games
Meanwhile, Pennsylvania, the state with the most skill game machines, is divided on how to proceed with them. Some lawmakers want to tax them, while others want to ban them. Adding to the complexity, courts have sided with manufacturers, deeming the machines legal. However, state authorities have appealed that decision, and the Pennsylvania Supreme Court agreed to hear the appeal, which could determine the machines’ fate.
While courts have decided the machines are not illegal, they’re not regulated either. That means they don’t contribute to tax revenue, much to the ire of retail casinos. In July 2024, casino owners filed a complaint against the state. They demanded either the taxation of skill games or the elimination of taxes on slot machines.
Meanwhile, some municipalities have taken steps on a local level. In October, Bensalem Township voted to ban skill games, while Oil City moved towards taxing them. Earlier in March, the Philadelphia City Council also banned skill games. However, a court reversed the ban in December after a challenge by manufacturers and operators.
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