Posted on: September 5, 2024, 08:46h.
Last updated on: September 5, 2024, 08:46h.
Kentucky Attorney General Russell Coleman (R) on Wednesday issued an advisory to law enforcement and state and county prosecutors telling them that they have his support in going after so-called “risk-free” and “no-chance” gaming machines that have recently popped up in many small businesses.
Coleman’s legal guidance said the General Assembly’s ban on skill games passed in 2023 and signed into law by Gov. Andy Beshear (D) that March applies to no-chance games.
The law is clear — gray machines and other games like them are illegal gambling devices that have no place in Kentucky,” said Coleman. “Along with our law enforcement and prosecutorial partners across Kentucky, we will uphold the law as passed by our Commonwealth’s policymakers in the General Assembly.”
Coleman’s office estimates that more than 500 risk-free gaming machines are operating unlawfully in Kentucky. The games are commonly found in restaurants and bars, convenience stores, and gas stations.
Before the Kentucky General Assembly passed House Bill 594, skill games proliferated the Bluegrass State.
Leading manufacturers Pace-O-Matic and Prominent Technologies argued that their games’ skill component, which typically involved the player identifying a winning payline by tapping on the corresponding symbols unlike a traditional slot machine that does that automatically for the player — disqualified the games as gambling apparatuses. HB 594 expanded the state’s definition of a slot machine to include games that are “partially or predominantly based on skill.”
Pace-O-Matic and Prominent challenged the law on various allegations but lost in court. The two companies removed their games from their many partnered businesses but Prominent returned with so-called risk-free games. The machines began appearing in businesses in early 2024.
Risk-free and no-chance games include no elements of skill, and, according to Prominent, no element of chance. The games tell the player whether the next spin will win or lose before making a bet.
Players continue to play to reach the next play that does win. Coleman says these games are also illegal under HB 594.
“You and your office are free to investigate and prosecute any violations of the Commonwealth’s gambling laws, including the laws related to gray machines. We are prepared to provide whatever assistance your office may need if your investigation or prosecution of illegal gray machines is challenged in court or results in additional constitutional challenges to the law or litigation against your office,” Coleman told state and county prosecutors.
Coleman opined that risk-free games “lure” in players by enticing them to continue betting in hopes of reaching a win.
This hope that the subsequent gameplay will be a winner is the ‘element of chance’ that makes these so-called ‘Risk-Free’ games illegal gambling devices,” Coleman concluded. “There is no safe harbor in Kentucky’s gambling laws for this kind of game.”
HB 594 provides for a fine of up to $25,000 per machine that remains operational in violation of the skill game ban.
Kentucky doesn’t have commercial or tribal casinos but does allow its horse racetracks and parimutuel facilities to operate slot-like historical horse racing (HHR) machines. The games calculate whether a spin wins or loses based on a previously run horse race instead of a random number generator.
Kentucky is also home to retail sports betting at horse racetracks and parimutuel wagering facilities, plus online sportsbooks.
Churchill Downs, which operates more HHR devices in Kentucky than any other company, lobbied heavily for the skill game ban to protect its parimutuel wagering operations.
