Kentucky AG Isn’t Buying That New Skill Games Are Different From The Old Ones

The Kentucky attorney general is re-upping his effort to crack down on so-called “skill games” in the state.

Per reporting by Kentucky Public Radio, Attorney General Russell Coleman (pictured above) released an advisory last week to state prosecutors reiterating that any newly installed “risk-free” games resembling slot machines popping up throughout Kentucky are illegal. 

And, ironically, it was likely a manufacturer of these “risk-free” skill games that tipped him off.

But more on that later.

‘No safe harbor’ for skill games

In the advisory, Coleman reminded prosecutors they are “free to investigate and prosecute any violations” related to these machines and he even offered help from the AG’s office, if needed.

“There is no safe harbor in Kentucky’s gambling laws for this kind of game,” Coleman wrote in the advisory. “The game lures the player into continuing to play on the chance that the next game play will result in a win worth more than he will have to pay for the current play. This hope that the subsequent game play will be a winner is the ‘element of chance’ that makes these so-called ‘Risk-Free Plays’ games illegal gambling devices.”

Prominent Technologies, one of the largest skill game manufacturers, is choosing to listen. It told Kentucky Public Radio that it asked all operators of its “risk-free” gambling devices to disconnect them as of last Wednesday evening.

However, Bob Heleringer, an attorney for Prominent, said the company will consider legal actions against the state.

“It’s just a shame that people can’t come in here and invest in Kentucky and hire employees and grow a company without these legal impediments being thrown up in our faces that we don’t think are justified,” Heleringer told Kentucky Public Radio.

Manufacturer: These aren’t the same as skill games

These new “risk-free” games are different from the devices Kentucky banned last year, proponents claim.

State lawmakers passed a bill last year — House Bill 594 — banning “skill-based” game machines, which have been dubbed “gray machines” in the industry. The manufacturers of these devices that look and feel very similar to slot machines you’d find in casinos claim they are based on skill and that the actions and choices of the players — not pure luck — decide whether or not they win.

The Kentucky General Assembly wasn’t buying it, and the bill ousting gray machines forced thousands to be removed from gas stations, bars, and other stores around the state. Prominent sued the state over that bill but then dropped the lawsuit this summer.

Pace-O-Matic, another prominent skill games manufacturer, also disconnected its games in Kentucky following HB 594’s passage and also sued the state. That lawsuit was dismissed, but Pace-O-Matic is appealing that ruling.

Prominent, meanwhile, responded by creating a new version of a skill game that it called a “risk-free” game and began setting them up in locations across Kentucky earlier this year.

Their claim? These new game machines literally tell players if they will win or not on the next spin (but not how much they will win and whether it exceeds the amount they’ll put into the machine). They alerted the AG’s office about these games in January and even offered to provide a demo. They again spoke with the AG’s office in August, advocating for the legality of their new version of skill games.

Heleringer told Kentucky Public Radio there are about 600-700 such game machines in Kentucky, spanning about 70 counties throughout the state.

Other states figuring out skill games

Kentucky isn’t the only state dealing with a skill game mess.

Here are a handful of other states currently trying to figure out what to do with these games:

Pennsylvania

Courts are currently siding with skill game manufacturers in Pennsylvania, saying these skill games are, indeed, based on a player’s skill. Thus, state gambling laws don’t apply.

Casinos in the state are staunchly opposed to these games.

But Gov. Josh Shapiro included regulation for skill games in his 2024-25 budget proposal. The proposal suggested a 42% tax on skill games revenue that would generate $150 million for the state in 2024-25.

The budget was passed without any skill game regulation, but Shapiro still wants it to happen.

“I’m hopeful that we’ll be able to find a way to get skill games done together with a piece on mass transit,” Shapiro told reporters last month. “[Senate Majority Leader Joe] Pittman has made clear he wants to marry those two issues together. I don’t have an objection to that, but I want to see that get done.”

Illinois

Illinois seems to be fine with skill games at locations like gas stations, convenience stores, bars, etc. What Illinois is not OK with is skill games at Dave and Buster’s.

In May, House Bill 5832 was introduced in Illinois. It would have banned real-money skill games at Illinois Dave and Buster’s locations. It said this ban would not apply to video gaming terminals across the state at locations like the ones mentioned above.

“It is inappropriate for family-friendly arcades to facilitate unregulated gambling on their premises,” Rep. Daniel Didich, the sponsor of the bill, said in a release. “These businesses simply do not have the ability to oversee gambling activity in a safe and responsible manner.”

However, the bill died in committee when Illinois’ legislative session ended later in May.

Virginia

The Virginia House and Senate passed a bill legalizing skill games in Virginia and creating a regulatory framework to oversee them. However, Gov. Glenn Youngkin vetoed it in May, and skill games weren’t included in the ensuing 2024-’26 budget.

So, skill games are currently illegal in the state, much to the dismay of the nearly 500 business owners who signed a letter urging lawmakers to legalize and regulate skill games in February.

They were legal until 2020, when the General Assembly passed a bill banning them.

Now, just like in Kentucky, some Virginia business owners are installing machines where players have the option to look ahead and see the results of upcoming spins. Essentially, they’re operating those machines until an authority tells them not to.

And nobody has yet.