Kentucky Court Upholds Ban on ‘Gray Machines’ in Landmark Legal Decision

In a recent ruling, a Franklin County Circuit Judge upheld Kentucky’s ban on “gray machines,” devices resembling slot machines that dispense cash winnings. The decision, announced on June 28, marked a significant victory for state authorities aiming to eliminate these machines from convenience stores, gas stations, and bars across Kentucky.

Judge Phillip Shepherd granted Attorney General Russell Coleman’s motion for summary judgment, bypassing a trial and effectively endorsing the legality of the state’s prohibition. Coleman lauded the decision, emphasizing the legislative role in safeguarding public interests amid concerns over the machines’ ambiguous legal status.

The controversy surrounding gray machines surfaced prominently during the legislative session, triggering both support and opposition. Advocates argued they were legitimate “skill games,” proposing alternative regulations to legitimize and tax them accordingly.

Critics, however, feared they would pave the way for the largest expansion of gambling in Kentucky’s history. ARKK Properties and Pace-O-Matic, among others, challenged the ban in court, alleging violations of free speech rights and contractual impairments. Judge Shepherd dismissed these claims, citing Kentucky’s rigorous history of gambling laws and rejecting claims of immunity for machines operating on legal fringes.

The legal battle culminated in Judge Shepherd’s ruling, bringing closure to a contentious debate that had spanned both legal and political arenas. House Bill 594, which initiated the ban, had faced intense lobbying efforts but ultimately passed with broad legislative support before Governor Andy Beshear signed it into law.

The decision was welcomed by House Speaker David Osborne, who affirmed the illegality of gray machines without proper oversight. Despite the ruling, plaintiffs’ attorney J. Guthrie True hinted at a potential appeal, suggesting that the legal wrangling may not yet be concluded.

Kentucky’s stance on gambling has seen recent legislative changes, including measures securing the status of historical racing machines at horse tracks, a significant revenue source for the state’s horse racing industry. The debate over gray machines underscores the state’s serious approach to gambling regulation, blending legal arguments with political maneuvering and heavy lobbying efforts.