KY gray machine ban moves to the House after impassioned hearing

Floral clock in Frankfort, KY
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HB594, the bill to ban gray machines in Kentucky, advanced through committee on Thursday after a contentious hearing.

Rep. Killian Timoney, the bill’s sponsor, spoke at the hearing along with a panel of representatives supporting the ban, including the Kentucky Chamber of Commerce and the Joint Executive Council of Veterans Associations of Kentucky.

The bill included updated language to clarify the scope of the ban and ensure that businesses like Chuck E Cheese and Dave and Busters were not impacted. Additionally, the University of Kentucky consulted with Timoney to ensure the bill did not impact the school’s esports facilities.

There was a large crowd of small business owners watching the proceedings, but KY Chamber of Commerce CEO Ashli Watt’s testified that business owners in her group are not on board with the games.

“It was our membership who requested that we vet this bill and it was our membership who were in agreement and taking the policy position of supporting the ban,” Watts added. She noted she has received zero communication from members asking the group to reconsider their stance on the matter.

Speaking for the Joint Executive Council of Veterans Associations of Kentucky, Larry Arnett warned the committee that the proliferation of skill machines has impacted the charitable gaming done by veterans groups in the state. He said the roughly $2 million raised annually has been cut in half.

The block of speakers against the bill consisted entirely of game manufacturers, including Pace-O-Matic, BJ Novelty Inc, and Prominent Technologies. The group was keen to note they were willing and eager to regulate. They were also quick to state their case that, in their eyes, what they are doing is currently legal.

“We are legal. If we were not legal under the laws that you have written. You would not have a bill here to make us illegal. Okay, follow the logic on that,” said former Kentucky state representative and Prominent Technologies lobbyist Bill Heleringer.

Helinger and others also said the push to ban these machines comes from Churchill Downs and is not in the best interest of the Commonwealth.

“It’s a bad precedent to set,” he said. “We gonna let Maker’s Mark come in here and say, well, we need you to pass the bill to make any out-of-state bourbon illegal, or maybe even our competitors.”

During the Q and A, many members of the committee alluded to conversations about banning these games and then bringing a bill to regulate them, similar to H525 currently with the legislature, in 2024. When voting, many committee members stated their interest in regulating this venture at some point, which is something the manufacturers would welcome.

“We’re in full support that bill. We believe it’s a better solution,” Pace-O-Matic Chief Public Affairs Officer Michael Barley told SBC Americas. “In our country’s history, when has a ban ever worked? Prohibition didn’t work. There’s been plenty of examples where that doesn’t work. If the government wants to get involved and control it, regulate it, apply a tax, that can benefit the state and the small businesses.”

One person who was not too persuaded was Rep. Michael Meredith, the sponsor of the Kentucky sports betting bill HB 551.

“We heard the last group make the statement that they brought a bill and they want to be regulated. The thing that I find kind of interesting about that is they now want to be regulated because they thought they were going to be banned,” he said.

Meredith also questioned the manufacturers about what kind of average hold these machines have. Barley initially responded that, given the “skill” nature of the machines, that is not something they can predict.

“There is no such thing in a skill game. If you play a skill game, you need to be able to win every single time,” Barley replied. Meredith pressed further, noting that sports betting, while it has a component of skill, still has an average hold rate of around 7%.

Barley eventually said the average rate of return was between 92-93%.