Virginia’s Gambling Industry Getting Murky After Recent Court Fights

Attempts by Virginia’s lawmakers to provide clarity to legal gambling in the state have only muddied the waters. Instead of having the courts find in favor of the state in a number of legal challenges, some forms of gambling have become deregulated because of the ongoing battles. More challenges are likely in 2022.

Virginia’s Growing Grey-Area Gambling

Virginia Senator Bill Stanley is one of the many who are arguing in public and in courts. According to media outlet Courthouse News, he said that recent rulings in electronic skill gaming and charitable gaming had left both activities in a legal grey area without state oversight.

In a text message to the media outlet, Stanley asserted, “These court rulings demonstrate a need for the legislature to fix the problems that it alone created.”

The battle began when state lawmakers temporarily legalized but then banned “skill games” that require skill and offer cash payouts. The ban was then challenged in court, and a judge in rural Virginia ruled in favor of the plaintiff. The state lost, with the judge saying that the ban was a violation of First Amendment rights.

Stanley had represented the plaintiff, gas station chain owner and former NASCAR driver Hermes Sadler, before the Greensville County Circuit Court. He was pleased with the outcome in early December, but that changed last week. Attorney General Mark Herring will appeal the decision to the Supreme Court of Virginia.

Court Decisions Create Turmoil

A. Anne Lloyd, Virginia’s Deputy Solicitor General, wrote in the state’s petition to review the decision that the state was grateful for the regulatory scheme that was used on the gaming machines. This generated over $130 million in revenue for Virginia. However, she asserted that the injunction blocking the law legalized the machines, but didn’t address the current status of the state’s regulation system.

The Virginia Department of Alcohol and Beverage Control collected taxes and monitored the use of the devices. Its regulatory authority dissolved when the ban was in effect. Lloyd wrote that Lerner’s decision makes it legal for children of all ages in Virginia to gamble on video skills games.

“The circuit court’s injunction has resulted in immediate and complete deregulation from the bench,” she added. Lloyd wants the state’s top court to cancel the injunction.

Charities Lose Poker Games

In addition to the ongoing skill game dispute, Cheers, a charitable gaming organization, took the Virginia Department of Agriculture and Consumer Services (VDACS) to court. This was after Virginia’s charitable gaming laws were amended to state that Texas Hold’em poker tournaments could be held in order to raise funds for charity. Although the activity was removed from criminalization, the agency’s oversight rules were not allowed to take effect.

Cheers’ June 2021 complaint focused on the VDACS having failed to respond to permit requests from the company prior to new timelines. Cheers won its case.

Although that case’s impact might be minimal, Senator Chap Parkersen, who represented Cheers during the dispute in Richmond, asserts that it demonstrates the same issue facing skills games. It shows that they are technically legal with no agency supervision.

With that being the case, there will likely be more games and events popping up in 2022. This means a larger police crackdown and, subsequently, more court challenges as Virginia isn’t capable of establishing clear and definitive rules to cover its growing gaming industry.