Judge upholds Kentucky’s ban on ‘gray machine’ gambling devices

Rep. Killian Timoney, R-Nicholasville, sponsor of the bill outlawing "gray machines" says the ruling will put enforcement on firmer ground. (LRC Public Information)

A Kentucky judge has upheld the legislature’s 2023 ban of so-called “gray machines,” agreeing with the attorney general that the law does not violate free speech or equal protection guarantees and isn’t unconstitutional special legislation.

Franklin Circuit Court Judge Phillip Shepherd in his ruling Friday sided with arguments made by Attorney General Russell Coleman defending House Bill 594, which banned the slot-style machines commonly found in many bars and gas stations around the state.

The machines’ moniker is derived from their murky legal status, an “allegedly gray area” that Shepherd referenced in his 52-page ruling. Opponents characterize the games as illegal gambling. Proponents refer to them as “skill games” and have argued a ban would let the horse racing industry monopolize gambling in the state. Churchill Downs had filed an amicus brief in defense of HB 594.

Shepherd in his ruling wrote that plaintiffs, including “skill-based” gaming company Pace-O-Matic, had not proved their claim that HB 594 violated the constitutional right to free speech by targeting the “Burning Barrel” game because the legislature didn’t like the ideas the game expressed.

“The Court is not persuaded that HB 594 targeted Burning Barrel because of its expressive content, but rather enacted HB 594 to target the conduct of unregulated wagering,” Shepherd wrote.

Shepherd also wrote that while HB 594 did appear to benefit Kentucky’s horse race tracks, which had supported the ban, that appearance in and of itself didn’t make the law unconstitutional special legislation.

Coleman in a statement said lawmakers “took a bold and bipartisan step to protect Kentucky children and families when they outlawed gray machines.”

“After the law was challenged, our Office launched a vigorous defense of the statute and the General Assembly’s fundamental role as our Commonwealth’s policymaking body,” Coleman said. “The resounding victory in the Franklin Circuit is a testament to the top-flight work of our attorneys, and I’m honored to work alongside them every day.”

Guthrie True, an attorney representing the plaintiffs, told the Lantern he was disappointed in the ruling but hadn’t had time to review it in detail. True said he planned to talk to his clients about a potential appeal.

Lobbying efforts around  HB 594 dominated spending in the 2023 session of the Kentucky legislature, with two groups on opposing sides spending nearly $600,000 in ads over two months, according to the Louisville Courier-Journal . The legislation sharply divided Republicans in the GOP-dominated legislature as it eventually got final passage and was signed by Democratic Gov. Andy Behsear.

House Majority Whip Jason Nemes, R-Louisville, opposed the ban while also representing a “gray machine” company as an attorney. Nemes told the Lexington Herald-Leader an ethics opinion he requested and received from the Kentucky Legislative Ethics Commission said it was ethical to advocate and vote on HB 594 because the legislation affected the entire “gray machines” industry, not just his client. House Speaker David Osborne, R-Prospect, was a co-sponsor of HB 594.

Louisville Public Media reported earlier this year that slot-style machines had begun to reappear in gas stations, with “skill based” machine companies arguing the machines were changed to become “no risk” games as to not run afoul of HB 594.

Rep. Killian Timoney, R-Nicholasville, the primary sponsor of HB 594, told the Lantern the companies essentially haven’t changed. He believed Shepherd’s ruling will give the attorney general and county attorneys “a whole lot more teeth” to enforce the law.

“They’re just an extension of the gray machines because there’s still an element of chance — it’s just a secondary element,” Timoney said. “Russell Coleman will have a much more clear direction on how to relay messaging to the county attorneys pertaining to [House Bill] 594.”

Timoney, who was defeated in a primary election last month, said he didn’t believe additional policy was needed in a future legislative session, saying the key now will be enforcing the law that’s already on the books.

This story was updated with a statement from Attorney General Russell Coleman. Additional context was also added regarding an ethics opinion Rep. Jason Nemes received.

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