The Democrat-controlled Virginia General Assembly has approved the governor’s revenue-raising proposal to tax “electronic skill games” to fund COVID-19 pandemic relief.
The plan, proposed as an amendment to H.B. 881, was approved April 22 by a vote of 77 to 17 in the House of Delegates and 34 to 6 in the Senate during an extraordinary session to address vetoes and amendments issued by Gov. Ralph Northam (D).
H.B. 881 as introduced by Del. David Bulova (D) would have banned the games as of July 1, 2020.
Northam’s amendment will change the effective date of the ban to July 1, 2021, and require distributors to remit a monthly tax of $1,200 for each game they provide for play in the state until the ban takes effect.
The re-enrolled bill will create a non-reverting fund called the COVID-19 Relief Fund that will be used to help the state respond to the pandemic. Northam said the tax will generate more than $150 million for the fund.
In an April 12 tweet, Northam said the relief fund would “help small businesses get back on their feet and provide support to nursing homes, Virginians looking for employment, individuals with rent and mortgage issues, and people experiencing homelessness.”
During the April 22 House session, Bulova said he spoke with the governor, who shared concerns that the game machines could flood the state before they are banned. To ameliorate those concerns, the governor said he will not sign any legislation that delays prohibition past 2021 and in the meantime will direct the Virginia Alcoholic Beverage Control Authority to promulgate regulations to place reasonable restrictions on the machines' proliferation, Bulova said.
The bill defines skill games as “electronic, computerized, or mechanical contrivance, terminal, machine, or other device that requires the insertion of a coin, currency, ticket, token, or similar object to operate, activate, or play a game, the outcome of which is determined by any element of skill of the player and that may deliver or entitle the person playing or operating the device to receive cash, cash equivalents, gift cards, vouchers, billets, tickets, tokens, or electronic credits to be exchanged for cash, merchandise, or anything of value whether the payoff is made automatically from the device or manually.”
Under the legislation, 84 percent of the revenue collected will be earmarked for a COVID-19 relief fund established by the bill. The remaining 16 percent would be allocated to the localities in which the games are located (12 percent), the treatment of problem gambling (2 percent), and the state Alcohol Beverage Control Authority (2 percent).