Bill Banning Kentucky Gray Machines Gets Priority Over Sports Betting

Bills to legalize Kentucky sports betting and ban so-called “gray machines” both were introduced Feb. 22 at the bill filing deadline. Each received referral to the House Licensing, Occupations and Administrative Regulations Committee. But more than a week later, the committee has only addressed one of those two Kentucky gambling bills.

That wasn’t the bill that addresses sports betting.

The committee voted 13-7 on Thursday to advance HB 594, the bill to ban Kentucky gray machines. The bill is in position to go to the House floor.

These slot-like gambling machines with a tacked-on skill component have popped up in gas station convenience stores, liquor stores, bars and restaurants around Kentucky.

Skill-game manufacturers offer harsh words on Kentucky gambling

Operators of the gray machines framed the subject as Kentucky horse racetracks versus small businesses.

Mike Barley from Pace-O-Matic went so far as to say that the ban effort was led by Churchill Downs. He went on to attack
historical horse racing facilities and their “lax” regulations.

“This bill is working in concert with sports gaming legislation to create a monopoly for Churchill Downs and others,” Barley said.

Bill author Rep. Killian Timoney denied that Churchill Downs is behind the bill.

Skill-game manufacturers have offered an alternative to regulate and tax their industry with HB 525. But Barley alleged that bill was “dumped into bill purgatory” in favor of this ban.

Bob Heleringer, a former Kentucky legislator turned lobbyist for Prominent Technologies, asked lawmakers if they were going to let the horse racing industry “crush anyone that they think is a possible competitor.” He added that small-business owners will respond next election if lawmakers pass this bill.

“It’s a tough market out there for these convenience stores, liquor stores, grocery stores,” Heleringer said. “We’re not in a single chain, we’re all in small business. That’s who you’re going to hurt with this bill.”

Many small business owners wearing green KY-MAC (Kentucky Merchants and Amusement Coalition) t-shirts filled the committee room.

Support for Kentucky gray machines ban

Mark Guilfoyle of Kentuckians Against Illegal Gambling led support for the bill. The organization represents Kentucky horse racetracks, charitable gaming and four chambers of commerce.

“Unless you pass HB 594, we’re going to see mini-casinos popping up on every street corner across Kentucky,” Gilfoyle said. “These things are going to be woven into the fabric of everyday life.”

Rep. Michael Meredith, who voted yes on the bill, pointed out that the skill-game manufacturers didn’t ask for regulation until they faced a ban.

Will Kentucky gray machine issue hinder sports betting?

Meredith, who sponsors sports betting bill HB 551, told Playin USA that he didn’t think the gray machine issue would affect the sports betting effort.

But, when introduced, he also expected his bill to get a hearing this week. Instead, the House prioritized the gray machine issue. The Licensing, Occupations and Administrative Regulations Committee’s next scheduled meeting is Wednesday.

In 2021, legalizing historical horse racing took priority over sports betting in the Kentucky legislature. This year, addressing the gray machines seems to have priority. That’s concerning in a short session.

Meredith responded to Barley’s claim that the gray machines ban and sports betting bill were “working in concert” to create a Kentucky gaming monopoly for Churchill Downs and other Kentucy racetracks.

“You mentioned sports wagering earlier,” Meredith said. “I would argue that’s a skill too. Frankly, Churchill Downs didn’t write that bill. I want to be clear about that too.”