Kentucky Senate passes bill to ban 'gray machines;' Beshear signs it into law

FRANKFORT, Ky. — The Kentucky Senate gave final passage Tuesday to a bill banning so-called "gray machines," the video games with cash payouts that have proliferated in stores, bars and clubs around the state in recent years.

House Bill 594 cleared through the chamber easily by a 29-6 vote, sending it to the desk of Gov. Andy Beshear, who signed it into law on Thursday.

What the legislature should do with gray machines — called "skill games" by supporters — has been one of the most heavily lobbied issues over the past two years in Frankfort, with two groups on opposing sides of HB 594 collectively spending more than $300,000 on ads in January alone.

Supporters of a ban on the games argued they amounted to an illegal expansion of gambling, calling convenience stores with multiple games "mini casinos."

More:Expensive fight over slots-like 'gray machines' looms in Kentucky legislature

Opponents of a ban said the games are legal and kept many struggling small businesses afloat in tough economic times, instead supporting an alternate bill to regulate and tax them.

The issue split the legislative caucuses in unusual ways — evidenced by a hiccup in the House two weeks ago when the bill came to the floor for passage and was suddenly tabled in a surprise procedural maneuver. A slight majority of Republicans voted to table it, but it returned to the House floor last week and was passed.

While some of the Republicans opposed to a ban do so based on their beliefs of limited government, others are staunchly anti-gambling, yet believe it is hypocritical to go after gray games when the legislature voted in 2021 to legalize the similar, slots-like historical horse racing (HHR) machines of the horse racing industry — which financially supported the push to pass HB 594.

That struggle was evidenced in the floor speech of Sen. Whitney Westerfield, R-Crofton, as the anti-gambling senator voted for HB 594, but mentioned the "hypocrisy" at play when the legislature had previously approved legalizing HHR for the horse industry in what he called the "slot machine bill."

"I sure wish the passion for stopping these machines had been here two years ago," Westerfield said.

More:Battle over 'gray games' dominating lobbying spending in Kentucky

Kentuckians Against Illegal Gambling — the largest legislative lobbying spender in January, with the horse racing industry financially supporting its TV ads — praised the legislature in a statement for "bringing House Bill 594 across the finish line to protect Kentucky families and communities from the dangers of illegal gray machine gambling."

The Kentucky Merchants and Amusement Coalition — which placed second in lobbying spending in January, with its ads supported by major skill games maker Pace-O-Matic — filled a committee room with supporters Tuesday as it passed out of committee, with industry representatives saying HB 594 is really about protecting Churchill Downs' gambling "monopoly."

"Once again, hypocrisy has won the day in Frankfort," KY-MAC President Wes Jackson said after the bill's passage in the Senate. "It's clear that some lawmakers are committed to putting the requests of one constituent, Churchill Downs Inc., over the needs of thousands of their constituents who are relying on the income of legal skill games."

The fate of the bill now lies in the hands of Beshear, who has not taken a position on HB 594, but did recently call "gray machines" the "only form of unregulated gaming in Kentucky."

Beshear, typically an ally of the horse racing industry on past legislative issues like HHR and sports betting, added that the Kentucky Fraternal Order of Police ending its relationship with a skill games company earlier this year "speaks volumes."

Even if Beshear were to veto the bill, the legislature would be able to override a veto when they return at the end of March with the vote of a constitutional majority.

Several other states in recent years — such as Virginia and Pennsylvania — have moved to ban the games through legislation or regulations, only to have companies like Pace-O-Matic file or support lawsuits to block them and remain in business.

Reach reporter Joe Sonka at jsonka@courierjournal.com and follow him on Twitter at @joesonka.

This article originally appeared on Louisville Courier Journal: Kentucky Senate passes 'gray machines' ban, sending HB 594 to Beshear