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Electronic gaming machines proliferated in Virginia ahead of July placement deadline

Electronic gaming machines proliferated in Virginia ahead of July placement deadline

Only $5 for 5 months
unregulated machines

Unregulated gaming machines are shown in a Roanoke convenience store.

There are more than 9,000 electronic gaming machines in circulation in Virginia that legislators maintain they will ban next year after they collect tax revenue to support coronavirus relief efforts.

The machines contributed about $12 million in tax payments in July, according to the Virginia Department of Taxation. Most of that tax revenue has gone into a newly established COVID-19 relief fund.

At the beginning of the year, the General Assembly wanted to ban these machines that look like slot machines but claim to have an element of skill that could allow them to elude the state’s prohibition on gambling. The machines rapidly proliferated across Virginia last year in convenience stores, restaurants and truck stops.

Then the General Assembly decided in April to allow the machines to continue to operate for another year as a lifeline to struggling businesses and as a source of additional revenue to help with coronavirus services.

The companies making the machines had until July 1 to place the games in Virginia. Travis Hill, chief executive officer of the Virginia Alcoholic Beverage Control Authority, told the Senate Finance Committee on Tuesday that 87 distributors registered 10,291 machines in Virginia, so no more will be allowed to enter the market. Of those operating, 1,126 of them are in the region stretching from Roanoke to far Southwest Virginia.

The machines are only allowed to be in businesses with ABC licenses and truck stops. The makers of the machines can move the machines around, so if a business is closed because of the coronavirus, they can be relocated to other establishments.

Senate Minority Leader Tommy Norment, R-James City, has not been a fan of the machines and wanted to ban them. He urged the ABC to keep a close eye on the machines to ensure they’re not evading tax collection or placing more machines in the market.

“I have historically referred to them as somewhat as bandits, and sometimes bandits are less than forthcoming with information,” Norment said.

Sen. Janet Howell, D-Fairfax, chairwoman of the Senate Finance Committee, assured the committee that she and Gov. Ralph Northam are still united in banning the machines by next June, “so that no one is doubtful.”

When legislators return for their regular session in January, they may also consider changing alcohol laws in Virginia.

“What this pandemic has done is really reframe the conversation about businesses and the control of alcohol,” Hill said.

Since the pandemic, the state has allowed restaurants and distilleries with on-premises licenses to sell cocktails for delivery or to go. The ABC created an expedited process to approve requests for outside dining areas. It also allowed ABC distillery stores to do shipments of spirits.

Alcohol sales sharply dropped when the pandemic reached Virginia and businesses shut down. While alcohol sales at establishments are down compared with sales before the pandemic, the measures have helped gradually grow some of the revenue back.

Sen. Chap Petersen, D-Fairfax, said a lot of restaurants that rely on alcohol sales have been hit hard.

“What can we do as an assembly to help out restaurants that would normally rely on alcohol sales as a way to get people in the door?” he asked.

Hill said it might be worth looking at some of the changes that were made during the pandemic.

“We kind of told ourselves, we’ve got to be able to live with this long-term in case it does become a permanent basis,” Hill said.

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