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Law360 (April 13, 2020, 4:49 PM EDT) -- Virginia's governor wants to delay a statewide ban on a form of gambling so that it can be taxed and the money used to establish a fund to help small businesses weather the coronavirus pandemic.
Gov. Ralph Northam, a Democrat, posted online Sunday that he would seek to tax "electronic games of skill," which are wagering games, such as video poker, that require some logic or thought and are not based purely on chance. The tax should be 35% of all revenue after user winnings are paid out, Northam said. He said such a tax would generate about $150 million, which he would put into a fund to assist small businesses, many of which have been devastated by the pandemic.
"I'm asking the General Assembly to establish a [coronavirus] relief fund to 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," Northam said.
The fund would be established by an amendment to a gambling-ban bill that had reached Northam's desk.
The governor's spokeswoman, Alena Yarmosky, told Law360 on Monday that in addition to funding coronavirus relief, leaving the skill games in place would benefit the restaurants and other locations where the machines are located.
"Keeping these machines will provide an additional income stream for struggling small businesses that have them," Yarmosky said.
The General Assembly has adjourned its regular session. Northam said on Twitter that he would ask legislators to approve his proposal when they return to the state Capitol on April 22 for a special session. That session would focus on amendments Northam has proposed to the state budget and to other state legislation.
Accordingly, on Saturday, Northam filed an amendment to H.B. 881, the legislation that would have added the skill games to Virginia's list of items considered illegal gambling. The House of Delegates approved the bill March 5 by a 90-1 vote, and the Senate approved it two days later by a vote of 22 to 18. It was then sent to Northam, who opted to try to amend it rather than vetoing it.
The governor had not been in favor of banning the skill games even before the pandemic. On Dec. 17, as he proposed his biennial budget, Northam indicated his desire to tax the games and put the revenue toward education.
Del. David Bulova, D-Fairfax Station, sponsor of H.B. 881, did not immediately respond to Law360's requests for comment.
--Editing by Vincent Sherry.
For a reprint of this article, please contact reprints@law360.com.
