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Virginia Governor Glenn Youngkin on Friday vetoed the state’s tabled skill-based gaming bill which sought to regulate the controversial sector.

Senate Bill 212, sponsored by Sen. Aaron Rouse, aimed to create a regulatory regime for skill-based gaming machines in Virginia, subject to a 25% gross receipts tax.

These machines are broadly opposed by the land-based and online gaming industries, which argue that they effectively constitute unlicensed gambling.

Such machines represent an enormous section of the US gaming market, taking more than $109.2bn in bets per year, according to a 2022 American Gaming Association (AGA) report.

The terminals can often be found it locations such as liquor stores, convenience stores, gas stations, truck stops.

While in many states these machines operate under grey-market conditions, they have been banned in Virginia since 2021.

AGA CEO Bill Miller said: “We applaud Governor Youngkin’s veto of SB 212, which will protect communities from illegal gambling machines and uphold not only the original ban passed by the General Assembly in 2020 but subsequent judicial determinations in Virginia’s courts.”

Under the text, liquor stores would be permitted to have up to four machines, while truck stops could operate up to 10.

Skill-based gaming bill passes House and Senate

The Virginia House and Senate first approved the proposed law in April, passing the House by a 49-43 margin.

The governor’s mansion however put forward several amendments tightening the regulation.

Youngkin’s changes included increasing the tax to 35% of gross receipts and a ban of machines near schools, casinos, churches and other sites.

Governor spokesperson Christian Martinez said: “His proposed amendments represent necessary changes and the added protections to the legislation address his serious concern with the regulatory structure, tax rates, the number of machines, impact on the Virginia Lottery, and broader public safety implications of the proposal.”

The Senate rejected the governor’s changes on 17 April 36-6, leading to the governor’s decision to veto the bill.

Skill-based gaming, and its inclusion in sports betting regulations, has been a controversial theme in some states this year.

In Missouri duelling sports betting bills divided the Senate this legislative session, with the inclusion of skill-based gaming being the controversial factor.

Kentucky meanwhile voted to ban skill-based gaming machines in March 2023, imposing fines of up to $25,000 for violations.

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