After failing to pass several times on the House floor on the final day of the session, legislation to legalize and regulate skill games is on its way to the Governor’s desk. As passed by the General Assembly, SB 661 (Rouse) sets up a regulatory and tax structure for skill games under the auspices of the Virginia Lottery. The bill authorizes localities to bar skill games via referendum, which could be called for either by resolution of the county, city, or town governing body or upon a petition of qualified voters. If an opt-out referendum fails, the governing body may not hold another referendum for three years.
Other key provisions of SB 661 as passed by the General Assembly March 14:
- Authorizes the Director of the Virginia Lottery to issue licenses for manufacturers, distributors, operators, and host locations of skill games. Certain truck stops, businesses that hold a retail license to sell alcoholic beverages, and certain social organizations that hold a valid charitable gaming permit are eligible to be host locations for skill games.
- Limits truck stops to seven skill game devices. ABC licensees with on-premises licenses would be limited to four devices; ABC licensees with off-premises licenses would be limited to three devices, and social organizations would be limited to two devices.
- Sets an overall cap of 25,000 machines statewide and bars approval of any skill game machine for operation within 10 miles of a casino gaming establishment, or in a location that would adversely affect or interfere with the conduct of affairs of any primary or secondary school. Prohibits any manufacturer or distributor licensee from placing more than half of its gaming devices in a low-income geographic area (defined as any locality, or community within a locality, with a median household income of up to 80 percent of the local median household income, or any area designated as a qualified opportunity zone by the U.S. Secretary of the Treasury).
- Imposes a gaming tax of 25 percent of gross profits. Revenues from the tax would be distributed as follows: 15 percent to the locality in which the host location operates; 6.5 percent to the Lottery for administrative costs; 2.5 percent to the Problem Gambling Treatment and Support Fund; 1 percent to the Virginia State Police; and the remainder to the state General Fund.
- Prohibits anyone younger than 21 from operating a skill game machine.
- Directs the Lottery Board to adopt regulations to implement the legislation and authorizes the Lottery to begin accepting applications for licensure as of July 1, 2026; allows an applicant who has submitted a completed application on or after July 1, but before August 1, to begin manufacturing, distributing, placing, or operating skill game devices, even if the applicant’s licensure application is still pending. (If the Board subsequently denied the license application, the applicant would be required to cease operations.)
VACo Contact: Katie Boyle