Queen of Virginia Skill & Entertainment, the face of the embattled skill game industry in Virginia, says its games generated almost $7 million in the first month for the state’s COVID-19 relief fund and local governments.
The company, a subsidiary of Atlanta-based Pace-O-Matic Inc., says a new state tax on its 5,700 machines in Virginia produced $6.8 million in July, the first month operating under a new state law that gives the industry a year to operate with a $1,200 monthly tax on each machine.
The tax, proposed by Gov. Ralph Northam and adopted by the General Assembly in April, produced more than $5.7 million for the COVID-19 relief fund and $826,176 for the localities that host Queen of Virginia electronic gaming machines in restaurants, stores and truck stops.
In the Richmond area alone, the company said it generated $25,920 for the the city of Richmond; $38,160 for Chesterfield County; and $38,160 for Henrico County. There are 710 machines in the three localities.
The General Assembly had voted in March to ban the electronic skill games, sometimes called “gray machines” because they operate in a murky realm between illegal games of chance and legal games of skill. Queen of Virginia and other operators say their games ultimately rely on a player’s skill, not chance, so they aren’t illegal gambling.
Virginia officials and a majority of legislators saw the games as a threat to the Virginia Lottery and profits it generates for public education. The lottery said it produced $595 million in net profits for K-12 education in the fiscal year that ended June 30, which would be the third-highest profit in its history, but $54 million less than in the previous year.
Northam gave the industry a reprieve to operate until next July 1, subject to a tax that would generate money for the new state COVID-19 relief fund and local governments, but he has said he would not sign legislation to allow them to operate beyond next summer.
“Good for them for living up to what the legislation said,” Secretary of Finance Aubrey Layne said Wednesday.
Layne estimates that, based on the July results, the new tax on skill games will generate up to $120 million a year, based on the number of machines already in operation when the new law took effect.
“It will be put to good use because we are going to need these funds for COVID relief,” he said.
Queen of Virginia had lobbied unsuccessfully to be regulated and taxed as a legal form of gaming, so the company is trying to prove its value to the state with an eye toward the General Assembly session in January, when the industry could seek legislation to allow it to operate beyond one year.
“This represents only funds that Queen has furnished to the state,” company spokesman Michael Barley said in an announcement on Wednesday. “It’s clear that the public loves playing our games, even though they are not going out as often to establishments in their neighborhoods where our games are located.”
The company also touted its purchase of 130 pizzas from restaurants in Chesterfield, Henrico and Richmond on Wednesday to deliver to 320 employees of three long-term continuing care communities — Lucy Corr in Chesterfield, Beth Sholom in western Henrico and the Masonic Home in eastern Henrico.