Fate of Virginia Skill Games to Depend on Budget Negotiations as Senate, Governor at an Impasse

Virginia senators rejected the amendments Gov. Glenn Youngkin proposed to their bill to regulate skill games, sending it back to him unchanged. That makes an outright veto likely, though there remains an opportunity to compromise and write partial amendments into the state’s budget in order to avoid that fate.

Democrat lawmakers have clashed with Gov. Youngkin over his budget proposals, and several of their bills have fallen victim to retaliatory vetoes. That includes the skill games bill, though it has bipartisan support, and the Governor has indicated more willingness to compromise on it than the other bills.

Lawmakers and Gov. Youngkin have agreed to a special session beginning May 13 to hash out their differences. In the meantime, all bills waiting for gubernatorial approval have become potential political bargaining chips. The budget bill can contain amendments to other laws, so Gov. Youngkin could potentially agree to sign certain bills—like the skill games—providing the budget will include some agreed-upon amendments.

Skill games are a gambling-adjacent product that has traditionally existed in a gray market capacity. The devices resemble slot machines in their functionality but include an element of skill to circumvent the legal definition of gambling. Many states have attempted to clarify their laws with varying degrees of success.

Online casino proponents have some skin in this game, albeit indirectly. Local businesses with small-scale gambling options tend to be among the most stubborn opponents of iGaming because both types of products have convenience as their principal selling point. So, legalized skill games now are likely to make online casino legalization more difficult in a few years.

Skill Games Sticking Point: Competition With Casinos

Virginia lawmakers enacted a skill games ban in 2020 but deferred enforcing it as local businesses were already struggling due to the pandemic. Now, facing pressure from those same business owners, the legislature has sought to reverse itself.

However, Gov. Youngkin’s sympathies may lie more with the state’s brand-new retail casinos, most of which are still under construction. Naturally, they would prefer not to see new competition arrive so quickly in the form of legal skill games.

Gov. Youngkin suggested multiple changes to the bill, but the proposals that received the most backlash from its supporters were geographical limits on the machines. If the legislature accepted his changes, the machines would have been subjected to two types of exclusion zones:

  • 2,500-foot radius exclusion around daycares, schools, and places of worship to address moral concerns about gambling availability and visibility.
  • 35-mile radius exclusion around casinos and off-track betting facilities to address concerns about lost revenue for other gambling businesses.

The trouble with these proposals is that these exclusion zones would cover much of the state’s high-population areas. Moreover, they would seem unfairly punitive to small business owners within the zones who set up shop before those areas were established. Those on the edge of the zones might see peers the next block over benefitting from an important secondary revenue stream while finding it denied to themselves.

It could also lead to unanticipated problems down the road. For instance, any local business with the machines would likely oppose the construction of new schools or places of worship nearby.

Veto Override Unlikely Due to Weak Support in House

The Virginia Senate is overwhelmingly in favor of regulating skill games. Senators passed the original bill 32-8 and rejected Youngkin’s amendments even more forcefully, 34-6. 

Those margins would be more than enough to override a gubernatorial veto if the bill had similar support in the House. Under Virginia law, both chambers of the legislature need to vote with a two-thirds majority to force a bill through without the Governor’s signature.

Unfortunately—or fortunately, depending on who you ask—support for the bill in the House isn’t quite as strong. There, it squeaked through 51-45 after Senators rebuffed the House’s attempts to tweak the bill.

The Virginia House consists of 100 delegates. So, even if all four who did not participate in the original vote came down in favor of an override, at least 12 nay votes would have needed to flip to yeas to beat a veto. That’s too much to consider a realistic possibility with the regular legislative session having already concluded. Indeed, with the Senate having rebuffed the changes, the House hasn’t bothered with a vote at all.

Interestingly, the House voted 57-38 in favor of its substitute bill. That didn’t have the geographical restrictions in place but did impose higher license fees and greater oversight on the machines. That voting margin equates to 60%, which isn’t quite the 67% required to overcome a veto, but much closer and possibly within reach of swinging a few votes.

In other words, if the skill games bill fails this year, there may be some cause for introspection on the part of the Senate. Its hardline strategy may yet pay off, but if the skill games ban remains in effect come 2025, it will likely be because of the Senate’s refusal to compromise with either the Governor or the House.

 

About the Author

Alex Weldon

Alex Weldon

Alex Weldon is an online gambling industry analyst with nearly ten years of experience. He currently serves as Casino News Managing Editor for Bonus.com, part of the Catena Media Network. Other gambling news sites he has contributed to include PlayUSA and Online Poker Report, and his writing has been cited in The Atlantic.
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