Ignoring the ban could leave you with a $25,000 fine

By Kate Northrop

A judge upheld the ruling that bans skill games in the state of Kentucky, leaving anyone who continues to operate them with a $25,000 fine per machine.

Skill games still have no place in Kentucky, a judge ruled, setting back retailers and gaming companies that argue they deserve a spot in small businesses and restaurants.

On Fri., June 28, Franklin County Circuit Judge Philip Shepherd dismissed a lawsuit that opposed a ban on skill games enacted by the Kentucky General Assembly and Governor Andy Beshear in March 2023.

The lawsuit was led by Pace-O-Matic (POM), a skill game software company and manufacturer based in Georgia, and ARKK Properties, which owned a convenience store that operated skill games before the ban was put in place.

The plaintiffs' group argued in their lawsuit that the Kentucky General Assembly violated free speech protections and unlawfully targeted skill games after misinterpreting them as gambling machines operating on chance, not games that required a degree of skill. The main difference between skill games and traditional slot machines is that the player needs to tap on the reels' winning payline on a skill game machine, whereas the machine will stop the reel automatically on traditional slot machines.

Shepherd dismissed the case on the grounds that a fundamental purpose of the General Assembly is to determine policy toward gambling activities regardless of whether skill is involved. He also dismissed the argument that skill games, also known as gray machines, are similar to amusement games.

"Our legislators took a bold and bipartisan step to protect Kentucky children and families when they outlawed gray machines," Attorney General Russell Coleman said. "After the law was challenged, our office launched a vigorous defense of the statute and the General Assembly's fundamental role as our Commonwealth's policymaking body."

Other amusement games, such as the coin-operated claw machines at amusement parks, arcades, and restaurants, do involve a skill component, but the value of prizes do not exceed $25 per play. Skill game machines have no limit, and Kentucky legislation made a point to define both skill games and amusement games as two separate forms of entertainment.

"Consequently, the legislature acted rationally in distinguishing between gray machines and coin-operated amusement machines that are not similarly situated," Shepherd said in his ruling.

POM and ARKK are "evaluating the ruling and consulting with [their] clients concerning an appeal," the plaintiffs' group told the Associated Press.

As of now, anyone in Kentucky who houses an operational skill game machine will get slapped with a hefty $25,000 fine, according to the legislation in House Bill 594.

The legality of skill games is a debated topic that has taken root in several states, including Pennsylvania, where legislation found them legal in December 2023, and Virginia, where it was banned following lottery retailer protests that garnered national attention.

In Pennsylvania, the Supreme Court is planning on reviewing whether the lower court's ruling that skill game machines are not illegal gambling machines under the state's Gaming Act was the correct interpretation of the law.