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Kentucky lawmakers delay action on bill that would ban gas station gambling machines

Republican Representative Killian Timoney gestures during committee hearing.
Legislative Research Commission
/
Legislative Research Commission
Republican Rep. Killian Timoney, of Nicholasville, presents bill that would ban "gray machines" during a committee hearing.

The Kentucky House of Representatives tabled a bill Friday that would ban gambling machines often seen at gas stations, convenience stores and bars that critics say are operating under a legal loophole.

House Bill 594 would tighten Kentucky law that prohibits gambling through games that feature chance. It explicitly targets machines that include any elements of chance, even if they also use skill to determine a player’s success

The measure wouldn’t penalize players but instead fine machine owners and supervisors $25,000 if the devices are used in the state.

Though the bill advanced out of the House Licensing, Occupations and Administrative Regulations Committee with a vote of 13-7 on Thursday, the proposal stumbled during a debate on the House floor after representatives decided to table it by a 42-35 vote.

The move means the bill can still be taken back up at a later date, but it will likely be changed in order to garner more votes among Republicans, who have been split on the issue.

Republican Rep. Killian Timoney, the bill’s sponsor from Nicholasville, said the bill would clarify that the machines are banned in Kentucky, which outlaws most forms of gambling.

“Kentucky has always done an excellent job of regulating gaming. And we want to continue that effort now by outlawing illegal gaming machines, and explicitly saying what is and what is not gambling,” Timoney said during the committee hearing on Thursday.

Businesses like gas stations and bars have earned revenue through the unregulated machines. Supporters argue the machines are “skill games,” meaning it’s possible to win through one’s ability each time they’re played.

But major groups, including the Kentucky Lottery Corporation and the state’s horse racing industry, oppose the so-called “gray machines,” saying they take business away from the state’s legal forms of gambling: betting on horse races, charitable gaming and the lottery.

Ashli Watts, president and CEO of the Kentucky Chamber of Commerce, said at Thursday’s committee meeting that the machines pose a threat to Kentucky’s horse racing industry. She added that her organization’s members support banning the machines.

“To this day, I have not received one single call, email or text message from any Kentucky Chamber member from across the Commonwealth, expressing their disagreement on our position,” Watts said.

Kentucky law allows charity-run games like bingo and raffles, as well as historical horse racing betting, where users bet on old horse race outcomes. Churchill Downs acquired a major manufacturer of the race betting machines in December and expects to open a gaming venue in downtown Louisville this year.

Bob Heleringer, a former Republican lawmaker lobbying for machine manufacturer Prominent Technologies, argued to the committee that the machines aren’t illegal and that the bill will punish small businesses.

“This isn't about hurting or helping the horse racing industry. It's about whether or not we're going to give them a monopoly. How far are we going to go? How far are you going to let them go to crush anyone who they think is a possible competitor,” he said.

Another Republican-sponsored bill looks to regulate instead of totally ban the gaming machines but has made little progress during the legislative session.

The fight over the machines dominated state lobbying in January.

According to the Kentucky Legislative Ethics Commission, the top two lobbying spenders in the statehouse in January were Kentuckians Against Illegal Gambling, a group that calls the devices “predatory” and the Kentucky Merchants and Amusement Coalition, an organization that argues the machines support small businesses. Pace-O-Matic, a gaming machine developer, also lobbied lawmakers.

Kentucky Lottery Records Custodian Kate Hanratty said in an email Thursday the corporation estimates there are nearly 3,700 unregulated gaming machines in its licensed retailers based on visits to the sites.

Last year, Timoney introduced a bill that would’ve required the Kentucky State Police to create a task force focused on removing illegal gambling machines. It had support from both the House and Senate, but a final version was not passed out of the legislature.

A few bills aiming to allow and regulate sports betting beyond horse racing in the state have also been filed this year, including one that has bipartisan sponsors, though the proposals haven’t advanced yet.

Jacob is LPM's Business and Development Reporter. Email Jacob at jmunoz@lpm.org.