The Supreme Court of Virginia in an unexpected move on Friday reinstated the state’s ban on slots-like skill machines in the commonwealth, overruling a decision by a lower court that had issued a temporary injunction blocking the enforcement of the ban.
The Greensville County Circuit Court issued the injunction in December 2021 after Hermie Sadler, a former NASCAR driver and entrepreneur from Emporia, had filed a suit against then-Gov. Ralph Northam; Mark Herring, then the attorney general; and the Virginia Alcoholic Beverage Control Authority after Virginia’s ban of skill games went into effect.
While the injunction was in place, Virginia was not collecting tax revenue on legal skill games.
For Virginia Attorney General Jason Miyares, the high court’s order settles the dispute over the ban.
“We are very pleased with the Supreme Court’s decision upholding the constitutionality of the skill games law,” Miyares spokeswoman Victoria LaCivita said in an email. “The commonwealth of Virginia has regulated gambling for centuries, and the skill games law is an ordinary exercise of the General Assembly’s authority to protect the public from dangerous gambling devices. The law is now in effect, and Commonwealth’s Attorneys are free to enforce it.”
In his suit Sadler alleges that the ban infringes his First Amendment rights as a businessman and that its sole purpose is to create an advantage for large, resort-style casinos and gambling chains moving into Virginia at the expense of small businesses surviving off the profit of the betting machines.
Sadler’s case is scheduled to be tried in Greensville County in December, but the higher court found that because the General Assembly during its 2023 session changed the definition of skill games, the injunction that Sadler sought applied to the previous definition.
But in their order, Justices Stephen McCullough, Teresa Chafin and Wesley Russell Jr. found that the lower court had abused its discretion by issuing the temporary injunction.
The justices also argued that Sadler’s free speech claim “is unlikely to succeed on the merits,” adding that “a party challenging the constitutionality of an enactment of the General Assembly is faced with a daunting task.”
Sadler, who was in Richmond Friday to prepare for his upcoming trial, was blindsided by the Supreme Court’s order.
“It was a shock and disappointment to me and my legal team,” Sadler said in a phone interview. “The people that are fighting against us, the lobbyists and casino owners, are very powerful and they have a lot of money and influence. But we won’t roll over and be quiet, we believe we are fighting for the constitutional rights of small businesses, and we’ll continue to prepare like we have been doing to go to court in December.”
Carl Tobias, a professor at the University of Richmond School of Law, said in an email that the Supreme Court’s decision to step in was unusual.
“But the Justices seem to be saying that the U.S. Supreme Court and other courts accord special treatment to gambling and find that the ban regulates conduct more than speech,” Tobias said.
The General Assembly in 2020 passed legislation banning skill games effective July 1 of that year after some lawmakers expressed concern that the electronic betting machines could pose a threat to the profitability of several planned casinos in the commonwealth.
But after the coronavirus pandemic shuttered thousands of businesses, lawmakers agreed to a one-year reprieve for operations of the electronic skill games. There are currently 6,000 machines in the commonwealth that were previously regulated by the Virginia ABC, plus an estimated 2,000 additional machines that are operated illegally.
After the expiration of the ABC’s regulatory oversight ended on June 30 of last year, businesses across Virginia have been operating skill games in murky legal territory.