The operator of Rosie’s Gaming Emporiums supports the state ban on skill games or “gray machines,” rejecting claims made in a lawsuit seeking to allow the games.
Churchill Downs Inc., which recently acquired Colonial Downs and the chain of Rosie’s Gaming Emporiums, responded to a request to comment regarding the lawsuit by Emporia businessman Hermie Sadler and the debate over the unregulated, untaxed games operating under an injunction in that case.
The Sadler lawsuit claims the state ban violates freedom of speech on multiple levels and that the machines provide a vital economic benefit to the businesses hosting them. It asks a judge to determine the state ban is unconstitutional and to allow the electronic games, which resemble slot machines. The newspaper reached out to the approved casino operators and Rosie’s regarding the machines and the lawsuit. Neither the Bristol Casino nor other casino operators responded. Rosie’s, which offers slots-like games whose outcomes are based on results of historic horse races, was the only entity to respond.
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“Skills games do not offer the same transparency or payouts for players that other gaming operators provide in Virginia. Skill games should not be allowed to continue to operate in Virginia,” according to the Churchill Downs response.
Casinos are regulated by the Virginia Lottery while the Rosie’s games are regulated by the Virginia Racing Commission. Wagering on HHR games rose from $1.1 billion in 2019 to $3.2 billion in 2021. The HHR games generated $286 million in net gaming revenue in 2021, or about 8%. Players won about $2.9 billion, according to an October 2022 JLARC study.
Of the net revenues, the HHR operator kept $226.5 million, paid $40.9 million in state and local taxes and distributed $18.7 million to the Virginia Equine Alliance, according to the study.
Rosie’s operates six locations in Collinsville, Dumfries, Hampton, New Kent, Richmond and Vinton. A new, larger casino resort-style facility is being developed in Dumfries and a traditional Rosie’s is being built in Emporia, where Sadler lives.
Once the new Emporia and Dumfries locations open, almost 4,000 of the 5,000 HHR terminals allowed by law will be operating in Virginia, according to the JLARC study.
Prior to the current ban, about 9,000 of the skill games were taxed for one year by the Virginia Alcoholic Beverage Control Authority, generating more than $109 million in taxes.
Sadler, who filed the lawsuit, claims casinos — including Rosie’s — have a monopoly on gaming in Virginia.
“There is no monopoly on gaming in Virginia. There are multiple providers,” according to the statement.
Skill games currently have no state regulation and pay no taxes.
“With the state lottery, four (and potentially five) casinos and one thoroughbred horse racing and gaming provider in Virginia, the industry can be managed and regulated efficiently and appropriately. Allowing gaming operations on every corner and at every convenience store and truck stop cannot be easily managed or regulated,” according to the statement.
In a recent interview, Sadler expressed hope state lawmakers would revisit the skill games issue and potentially develop a framework for oversight and taxation. Churchill Downs opposes such a change.
“The Virginia General Assembly has made its position on unregulated gray games very clear. We do not endorse any change in that position,” according to the statement.
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