Published: April 3, 2023

Skill Games Makers, Operators Sue Kentucky for banning so-called "gray machines"

LOUISVILLE, Ky.  Pace-O-Matic and other "skill game" companies are suing the state of Kentucky for banning so-called "gray machines."

Earlier this month, the state House and Senate passed House Bill 594 and Gov. Andy Beshear signed it into law. The bill outlaws what proponents call "skill games." Machines with names like "Burning Barrel" and "Wildcat" have become popular and can generate thousands of dollars in income per month for establishments. 

The machines, which look like slot machines, with cash payouts have popped up in bars, restaurants and truck stops across Kentucky in recent years. But on July 1, they will become illegal and any place operating one of them could face a $25,000 fine. 

In a lawsuit filed Tuesday in Franklin Circuit Court, the companies call the new law unconstitutional and ask a judge to block it. 

"Legislation banning skill games is unconstitutional and we are prepared to defend the legality of our games in court," Chief Public Affairs Officer for Pace-O-Matic, Michael Barley, said in a statement. "Our priority is, and always has been, protecting the rights of Kentucky small businesses and fraternal organizations who rely on legal games of skill for income."

Pace-O-Matic owns and operates numerous skill-game machines in Kentucky, according to the lawsuit, including "Burning Barrel."

The suit claims skill-based games "have been legal for centuries under statutory and common law of the commonwealth of Kentucky and in virtually every other jurisdiction in the United States."

The companies said skill-based games can be distinguished from illegal gambling devices because "the outcome of a skill-based game is controlled by the skill of the player rather than chance or other factors outside the player's control."

The suit also claims that the machines have "recently drawn the ire" of "certain horse racing interests" within the state of Kentucky "because such electronic skill-based games are a popular form of entertainment in local neighborhood convenience stores, restaurants, truck stops, and other locations that retain the revenue generated by such games in the local businesses and communities, but purportedly threaten the monopolization of gaming enjoyed by the horse racing interests."

Slot-like machines for historical racing seen at Churchill Downs-owned Derby City Gaming are regulated and legal under Kentucky law. 

The new law has caused concern among some Louisville business owners, who call the games "a lifeline" that helped get them through the pandemic. 

Crescent Bride, who owns Joe's Older Than Dirt in the Lyndon area, said he and hundreds of others welcomed the skill games from Pace-O-Matic to their businesses in an effort to increase revenue at a time when business was declining.

"I am baffled as to why Churchill Downs is allowed to do it and no one else is able to do it," Bride told WDRB News earlier this month. "Everyone in this state is going to be harmed by this decision."

Kentucky Attorney General Daniel Cameron, who is seeking the Republican nomination for governor, confirmed his office will defend the state in the lawsuit.

"Our office is responsible for upholding the laws passed by the General Assembly and we look forward to defending this legislation," Cameron's office said.

To read the full lawsuit, click here or on the PDF embedded in this story.,Beshear%20signed%20it%20into%20law.

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