As the Commonwealth continues to see an increase in gaming machines similar to slot machines in gas stations and bars, the House Licensing and Occupations Committee enacted legislation to address the issue Thursday afternoon.
In a recent interview with The Bottom Line, Rep. Killian Timoney noted that gaming machines had earned the name “gray machines” because they operate in the gray area of the law.
House Bill 594, sponsored by Rep. Timoney, would ban gray machines and make them illegal in Kentucky while also implementing a $25,000 fine for those operating the machines that would be paid to the county they were operated in.
During a discussion on the bill in the committee, Timoney also said the bill is the product of a lot of collaboration with work from the business community, Kentucky Retail Federation, which worked on language related to places like Chuck E. Cheese and Dave and Busters, the State Fair Board, University of Kentucky, horse racing tracks, and many others that have agreed to the language in the bill including a committee substitute brought before the committee.
“Kentucky has always done an excellent job of regulating gaming, and we need to define what gambling machines are,” Timoney said.
Many groups testified alongside Timoney in favor of the bill, including Kentucky Chamber President and CEO Ashli Watts, who noted the Chamber is the state’s largest business association, with more than 70% of its membership comprised of small businesses with fewer than 100 employees. The Chamber, she said, has made clear its position to ban gray machines, especially after vetting through multiple levels of approval.
“Our members elected to support banning these machines because of how they were instituted, illegally, without government authorization or oversight,” Watts said.
Larry Arnett, representing many veteran services organizations across the state, said the unregulated machines hurt the ability of veterans groups to raise funds for civic causes in communities.
“Like hundreds of charities, local veteran organizations raise money for charitable gaming. Those funds have gone to help tornado and flood victims, schools, athletic teams, the Red Cross, soup kitchens and more. Before gray machines showed up, these groups could raise $2 million each year for these causes collectively. That number has been cut in half in recent years since gray machines came into communities and will keep falling if the General Assembly allows machines to continue to operate,” Arnett said.
Kentuckians Against Illegal Gambling representative Mark Guilfoyle noted a lawsuit in Rowan County, Kentucky, where a business is being sued for having the machines as a crime under Kentucky law.
He also stated taxing and regulating the machines is not an option because a new branch of state government to regulate would be huge and difficult to implement. Adding the 6% tax on the machines proposed by groups behind the machines is inadequate and far less than what we see in other states.
Groups behind the machines and some owners of shops operating the machines also testified in opposition to the bill, stating their case for taxation and regulation.
House Bill 594 passed in committee and now moves to the full House for a vote.