Judge ruling keeps Kentucky ‘gray machines’ ban in place for now

The odds of slot-like “ gray machines ” returning to gas stations, bars and convenience stores across Kentucky just got longer.

Franklin Circuit Judge Phillip Shepherd ruled to keep a ban on the machines, also known as “skill games,” in place in a Friday opinion.

Shepherd granted Attorney General Russell Coleman summary judgment, meaning he decided in favor of the ban without a full trial. Coleman was the primary litigant defending the 2023 bill banning the machines from the state, though he was joined by legal counsel for various horse racing tracks in the state.

Horse tracks currently have their own slot-like games called “historical horse racing” machines.

Counsel for the plaintiffs, Frankfort attorney J. Guthrie True, told the Herald-Leader he “wouldn’t be surprised” if they appeal Shepherd’s ruling to the state’s Court of Appeals.

The primary named plaintiff was ARKK Properties, which True said operates a store where the machines were present before they were banned. Joining ARKK Properties were several other stakeholders, most notably POM of Kentucky, LLC, the Kentucky subsidiary of Pace-O-Matic. Pace-O-Matic made Burning Barrel, the most popular version of the machine.

The plaintiffs made arguments on seven different legal grounds, including free speech, arbitrariness, impairment of contracts and separation of powers, among others. Shepherd granted summary judgment on all of them.

The ban was first put in place in 2023 with the passage of House Bill 594.

“Gray machines like Burning Barrel appear designed to fit into a gray area of the law that always made the legal status of these games somewhat murky,” Shepherd wrote. “It was entirely unreasonable, based on Kentucky’s long history of regulating gambling… for an investor to expect that any machine operating on the fringe zones of legality as a gambling device would be exempt from subsequent regulation or prohibition by the Legislature.

“HB 594 was a lawful exercise of the Legislature’s police power to regulate gambling for the legitimate governmental interest in addressing the social harms of unregulated forms of gambling.”

House Bill 594 took a rocky path, being abruptly tabled on the House floor , but eventually passed with approval from both legislative chambers and Gov. Andy Beshear.

The fight over these machines, and who gets to control the market on slot-like machines in Kentucky, has been an expensive one. It’s played out in the courtroom, on the political battlefields and in Frankfort.

In 2023, when House Bill 594 was passed, spending from both the gray machines and horse racing industries powered the most expensive year of Frankfort lobbying on record.

House Bill 594 sponsor Rep. Killian Timoney, R-Nicholasville, drew intense fire from a mysterious advocacy group over his stance on transgender issues just as he was moving the bill through to final passage in Frankfort.

In May, Timoney was defeated handily by a fellow Republican in the primary who lambasted Timoney on the same score.

The gray machines case also took on a few different lives of its own.

It spurred a challenge to Senate Bill 126, a change of venue bill that was recently struck down by the Kentucky Supreme Court.

The case also indirectly led to the recusal of former attorney general Daniel Cameron over political contributions tied to the plaintiff. Pace-O-Matic executives gave $100,000 in donations to a political action committee supporting Cameron’s campaign for governor last year, a campaign that Cameron lost to Beshear.

A similar case filed in Jefferson Circuit Court by skill games company Prominent Technologies was dismissed on Wednesday.