The head of Kentucky’s largest business organization penned a letter to state legislators urging them to ban “gray machines.”
A gray machine is a gaming machine that relies on the player’s skill to pay a prize. However, they are still slot machines.
Kentucky gambling laws prohibit slot machines in the Bluegrass State. But ambiguous legal language led to these machines popping up across Kentucky.
Kentucky Chamber of Commerce wants gray machines gone
Ashli Watts, president of the Kentucky Chamber of Commerce, said in the letter these machines don’t belong in the state.
“Gray machine operators are trying to back Kentucky into a corner by forcing the General Assembly to reward their unauthorized activity after they’ve already established a foothold in our Commonwealth. This is simply not the way we do business in Kentucky.”
In their most recent sessions, the Kentucky House and Senate each passed separate bills banning the machines. But lawmakers ran out of time. The legislative session ended before either bill could be sent to the other chamber for debate. As a result, gray machine operators have increased the number of machines in the state.
How gray machines threaten legitimate gaming in Kentucky
Gray machines in Kentucky are typically small countertop machines in convenience stores, clubs, and other venues. They are not specifically regulated under Kentucky gaming law.
Therefore, the state can’t tax gray machine revenue. The opposite happens with lawful, regulated gaming machines. Under the current legal landscape, gambling tax revenue is used to help fund state education programs.
“These unauthorized gambling machines are quickly proliferating throughout Kentucky,” Watts wrote in her Feb. 8 letter. “Threatening education funding via the Kentucky Lottery and harming our signature equine industry, which the General Assembly has worked hard to protect and grow.”
The sentiments from Watts represent concerns for thousands of Kentucky-owned businesses. According to the Kentucky Chamber of Commerce, more than 3,800 companies belong to the organization.
Unfettered by state regulation, operators of the gray machines have flooded the state with the devices.
“We believe there are machines now in 110 of Kentucky’s 120 counties and that the total number of machines statewide is well into the thousands,” said John Cox, Director of Public Affairs for the Kentucky Chamber.
This year’s legislative session runs through the end of March. Most expect Kentucky lawmakers to address the issue after receiving pressure from the Kentucky Chamber of Commer and other organizations.
More than 5,000 Historical Horse Racing (HHR) machines are in the state. But they are all regulated under the Kentucky Horse Racing Commission and responsible for paying taxes on revenue.
Gray machine advocates argue a ban would hurt the small businesses that rely on them for added revenue.
