A Kentucky judge earlier this week declined a motion to put a temporary injunction on a new state law that bans so-called gray games. However, the case will continue, and the judge stated the plaintiffs’ case has some merit.
Franklin Circuit Court Judge Phillip Shepherd ruled Monday that the plaintiffs in the case, which include several businesses, fraternal organizations, and game manufacturer Pace-O-Matic, have failed to demonstrate that “the public interest” would support a block on the law banning the games. Also known as skill games, gray games look like slot machines, but the plaintiffs argue that players can win more than they wagered each time they play based solely on their memory or other skills.
“The Court believes that the public interest supports the denial of injunctive relief because the Plaintiffs’ game is unregulated, untaxed, and subject to legitimate concerns of economic exploitation for the poor, the economically vulnerable, and minors who may not fully understand the nature of the risks involved in the game,” Shepherd wrote.
A message to attorneys representing the plaintiffs was not immediately returned.
First Amendment Argument Has Merits
While Shepherd did not issue an injunction, he did say in his 17-page ruling the plaintiffs showed they have “a substantial question on the merits” regarding their argument that the machines should be considered “protected speech” under the First Amendment. However, the judge also pointed out that the argument seems to be “theoretical” in nature.
“There is no credible allegation of censorship, viewpoint discrimination, political or social discrimination, retaliation for voicing unpopular opinions, or other areas of traditional First Amendment concern,” the judge wrote.
As the order notes, the plaintiffs and Kentucky Attorney General Daniel Cameron’s office reached an agreement to not enforce the ban while the case remains in the courts. That agreement allows the machines to stay in convenience stores, truck stops, bars, and fraternal organizations. However, they must be turned off. Should the plaintiffs win their case, the machines can be reactivated.
Kentucky Gray Games Background
Kentucky was one of the first states to seek a ban on gray or skill games. Last month, the Virginia Supreme Court reinstated a ban on those games in that state, which was scheduled to take effect Wednesday.
In recent years, Pace-O-Matic and competitors entered the state and approached county attorneys to see if their games would be allowed. They then pursued deals with local merchants and organizations to install their machines. How many machines are in Kentucky is unknown, but it’s easily in the thousands statewide. Proponents of the games said they gave business owners a critical revenue stream that helped keep establishments open during the COVID-19 pandemic.
Some state lawmakers argued that the unregulated games presented a threat, including exposing minors to gambling and undermining charitable gaming efforts. State Rep. Killian Timoney, R-Lexington, filed House Bill 594, which passed in both chambers of the General Assembly. However, it did meet some resistance from lawmakers who wanted to regulate the games instead.
Support for HB 594 came from existing gaming operators, including historical horse racing gaming hall owners like Churchill Downs. The American Gaming Association also backed the bill.
AGA Senior Vice President of Government Relations Chris Cylke said in a statement to BetKentucky.com - your home for Kentucky sports betting news - that the games in question are gambling devices and that states can restrict them.
“A core element of so-called ‘skill’ game manufacturers’ playbook is to use litigation as a dilatory tactic while continuing to profit and even expanding their business during the pendency of their claims,” Cylke said. “This ruling prevents this continued chicanery and rightly prioritizes the state’s significant interests in enforcing duly enacted legislation that protects the public.”
Luckily, this should have no impact on Kentucky betting apps, at least right now. Stay with BetKentucky.com for all of the latest news and developments surrounding the topic.