Hermie Sadler. Photo by Markus Schmidt.

RICHMOND – A former NASCAR driver and entrepreneur who is fighting to have Virginia’s ban of skill games overturned in court said that an amendment to the state budget compromise published Sunday undermines the courts’ prior rulings in his suit while making Virginia’s regulation of electronic betting machines even more complex. 

“By putting this language into the budget they are in essence flipping off the Circuit Court judge who has ruled on our case and the Virginia Supreme Court that has given an opinion,” Hermie Sadler said in a phone interview Tuesday. “They are turning their back on the judicial systems because they are pressured by the casino lobby, and all they have done is to make the law more convoluted for the industry as a whole.”

See our previous coverage of the skill game issue.

Commentary: How skill game tax revenue matters more to some rural localities than elsewhere.

After nearly three months of off-and-on negotiations, the legislature is set to return to Richmond on Wednesday to vote on the budget conference reports for the proposed two-year state budget to take effect on July 1. 

State Sen. Bill Stanley, R-Franklin County.

Sen. Bill Stanley, R-Franklin County, a trial lawyer in Moneta who represents Sadler in the case, called the new amendment included in the budget a “wholesale rewriting of an established code section that has at least in the preliminary sense been determined to be unconstitutional.” 

The change in the language has made the legal definition of what constitutes a game of skill under Virginia law a lot more complex and difficult to understand, Stanley said in a phone interview with Cardinal News on Monday. “This does nothing for law enforcement to help them find what is legal and what not. It also doesn’t help the small business owner who has one or more of these games to know if what they are doing is right or not right, and it does nothing to solve the problem of illegal gaming.”

Stanley said that the authors of the amendment are “telling the court that ruled in Hermie’s case that whatever they do is not important,” which he called an “affront to the ruling to the court and a middle finger to the judge, and that’s disgusting.” Circumventing the legislative process to create a new law, without having followed the regular vetting process for new legislation, is unheard of, Stanley said, “and it is unconstitutional and unwise.”

Sadler, the owner of a truck stop, a restaurant and several convenience stores in Emporia and Greensville County, last summer filed a suit against then-Gov. Ralph Northam, Mark Herring, then the attorney general, and the Virginia Alcoholic Beverage Control Authority, after Virginia’s ban of skill games went into effect. In his suit he alleges that the ban infringes his first amendment rights as a businessman and that its sole purpose is to create an advantage for large, resort-style casinos and gambling chains moving into Virginia at the expense of small businesses surviving off the profit of the betting machines. 

In December, a judge at the Greensville County Circuit Court issued a temporary injunction blocking the enforcement of the ban. A court hearing scheduled for last month was continued until Nov. 2 at Sadler’s request because of rumors that lawmakers might attempt to further regulate skill games through the budget.

A skill game at Sadler’s truck stop. Photo by Markus Schmidt.

The electronic betting machines in question function like slot machines that pay out winnings to players with skill. Unlike games of chance, such as the slot machines at the larger casinos, skill games have an interactive component. It’s not rare for well-versed players to sometimes win hundreds, if not thousands of dollars. In Virginia, there are currently 6,000 machines that were previously regulated by the Virginia ABC, plus an estimated 2,000 additional machines that are operated illegally.

Under the new language in the budget, a skill game is “a device that contains a meter or measurement device that records the number of free games or portions of games that are rewarded and a device designed or adapted to enable a person using the device to increase the chances of winning free games or portions of games by paying more than the amount that is ordinarily required to play the game.” 

Stanley called the new language “a jumbled mess of word spaghetti” that “convolutes the law,” and that it is “even more terrible” than the initial legislation banning skill games. “How would the operator of a store with skill games know that the legitimate skill game that they have is a device designed to adapt to make the person using that to increase the chances of winning free games?”  

And Sadler said that as a business owner who has operated skill games for decades, he has no idea what impact the newly created legal definitions would have on his ability to lawfully operate the 44 machines in his establishments. “I’m more confused than I was when I read the previous language,” he said. 

It is not entirely clear who added the language to the budget compromise, but the budget negotiations were led by Del. Barry Knight, R-Virginia Beach, the chairman of the Appropriations Committee, and Sen. Janet Howell, D-Faifax, who chairs the Finance Committee of the Senate. The 14 budget conferees worked mostly behind closed doors, leaving even their colleagues in the General Assembly guessing about the progress of the talks. 

Howell is also the sponsor of Senate Bill 971, which banned most skill games in Virginia as of July 1, 2020, more than two years after the General Assembly passed the measure during its regular session in 2019.

Sadler suspects that Howell and state Sen. Tommy Norment, R-Williamsburg, the Senate minority leader and the bill’s cosponsor, have joined forces with the big casinos to lobby in Richmond with the goal of shutting down skill games in Virginia because they want to eliminate all competition. Both lawmakers have received thousands of dollars in campaign contributions from several casino companies. 

Howell, through a spokeswoman, has declined repeated requests for an interview. A spokesman for Norment did not respond to several emails seeking comment.

Because the courts have so far ruled in Sadler’s favor, Stanley believes the recent move by Howell “seems designed to come from the special interests of big time gaming and gambling in Virginia to eliminate the small business owner from participating in that marketplace.”

The authors of the amendment replaced one unconstitutional law with another, Stanley said. “They have taken one bit of legislative silliness and replaced it with something even more silly. This flies in the face of the traditions of the legislature to not interfere with the co-equal branch of the judiciary and not to legislate through the budget.”

But because the legislature is pushing the July 1 deadline when the new budget for fiscal 2022-24 goes into effect, it is highly unlikely that lawmakers will take the time to debate the skill games amendment – which Stanley, a lawmaker himself, knows well.

“This is done, because Wednesday will be a four-hour hearing on the entire budget,” Stanley said. “The budget is a hundreds of pages document. This is just a little spot, and Democrats and Republicans may love a lot in the budget, so if you vote against the budget because this is wrong, then you vote against eliminating the state grocery tax,” Stanley said.

The amendment, he added, is “circumventing the legislative process which ensures fairness to all parties and puts leverage in making people vote for this who otherwise wouldn’t have, and that’s how they are getting through the backdoor what they couldn’t get through the front door.”

As for the pending litigation, Stanley said that he will amend his complaint and ask that the court “put this off” until the Nov. 2 hearing. “Then we’ll have it all heard at once,” he said.

Markus Schmidt

Markus Schmidt is a reporter for Cardinal News. Reach him at markus@cardinalnews.org.