Gaming

Kentucky House Bill 608 aims to ban skill-based gambling machines

Kentucky House Bill 608 aims to ban skill-based gambling machines

The slot developers say these are skill-based games and not technically slots. They think that means they are legal.

LOUISVILLE, Ky. — Slot machines are popping up in bars, pool halls and convenience stores across Kentucky. Some have dubbed them “gray machines” — and say they still only work because of a loophole in Kentucky law.

The slot developers say these are skill-based games and not technically slots. They think that means they are legal.

However, some Kentucky lawmakers believe skill game developers took advantage of a loophole when they opened up shop in the Commonwealth and filed House Bill 608 to completely ban the machines.

“The issue isn’t necessarily whether or not they’re legal at this point or whether or not having them all over the place is a problem,” said Rep. Adam Koenig, R-Erlanger. “The problem is they just showed up, started operating and asking for forgiveness rather than permission.”

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Koenig said that since the industry is unregulated, consumers are at risk.

“They don’t pay taxes. There are no regulations. They say they don’t allow anyone under 21 to use it, but I’ve been to restaurants where they exist and I don’t see anyone carding anyone,” Koenig said.

the Kentucky Public Protection Cabinetwhich is the state agency that regulates charity gambling and horse racing in the commonwealth said they are not officially weighing whether these games are legal or not they say they cannot promise companies that the games comply with current Kentucky law.

Kentucky Lottery spokesman Chip Polston said there were nearly 1,400 machines in operation at KY Lottery retailers in 71 counties, but he could not account for machines in bars and restaurants because they do not follow these machines.

Polston said he knows of at least two developers with machines in Kentucky, but there could be more. One such company is Pace-O-Matic.

Mike Barley, director of public affairs at Pace-O-Matic, said they began operating in Kentucky in February 2021. As of this week, they have 900 machines in 42 Commonwealth counties.

Barley said their game is legal because it is not based on chance, so it is not considered “gambling”.

“You can win every time on our game,” Barley said. “There isn’t an amount that has to be played before he decides to pay someone. And that’s how a traditional HHR or a slot machine would work.”

Barley said they are still trying to work with Kentucky lawmakers to regulate the industry.

“We understand and believe the industry would benefit from additional regulation,” Barley said. “Obviously I don’t think a lot of industry comes into the Commonwealth and says we’d like to pay extra tax, and we’re one of them.”

Polston said there are no skill game regulations in Kentucky.

“There are no regulations, no sales or taxable income reporting, no odds or payout information, nothing,” Polston said in an emailed statement. “Charitable gaming operations have tons of regulatory documents and hurdles they have to jump through – these devices don’t.”

Barley said if his business was allowed to operate, it would bring in a lot of revenue for the state and help small businesses as they keep a share of the profits.

Barley also said he thinks it will help eliminate illegal gambling in Kentucky.

“We think our games and the way we operate our games is a great opportunity to clean that up, while allowing small businesses in Kentucky to play a major role in that revenue stream,” Barley said.

HB 608 was offered earlier this week. He could be heard in committee as early as next week.

Contact journalist Rachel Droze at [email protected]. Follow her on Twitter, Facebook and instagram.

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