(C) Virginia Mercury
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Virginia senator who does legal work for skill game industry will help write skill game bill • Virginia Mercury [1]
['Graham Moomaw', 'More From Author', '- February']
Date: 2024-02-29
A state senator whose law firm has helped the skill game industry fight Virginia’s ban on the slots-like gambling machines is among the handful of senators picked to write legislation behind closed doors that could determine whether the industry remains profitable or ceases to exist in the state.
Many members of the Virginia General Assembly are lawyers, and it’s not uncommon for them to vote on legislation that could conceivably impact a client.
Glancing associations aren’t usually enough to trigger Virginia’s conflict of interest laws, which are meant to prevent elected officials from taking public actions that benefit their private interests.
But the professional connection Sen. Bill Stanley, R-Franklin, has to Georgia-based skill game company Pace-O-Matic is unusually direct, touching on his work as a private attorney, his interest in car racing and the political punditry he offers in podcast form. Pace-O-Matic has lobbied heavily for the bill Stanley will now help finalize in the last week of the session.
In an interview Thursday, Stanley said the Virginia Conflict of Interest and Ethics Advisory Council determined his ties to Pace-O-Matic don’t amount to a legal conflict.
“They found that there was no conflict because I don’t own Pace-O-Matic,” Stanley said. “I don’t own one of these skill games. And I don’t own a convenience store that has a skill game in it.”
Stanley and his firm worked with Pace-O-Matic on a lawsuit seeking to overturn the previous ban passed by his General Assembly colleagues, a legal challenge that bought skill game companies nearly two years of revenue with no taxation and regulation before the ban was reinstated last year.
Pace-O-Matic also sponsors a racing team partnership between Stanley and former NASCAR driver Hermie Sadler, who has hosted skill games at his Southside Virginia truck stop and served as a plaintiff in the lawsuit trying to keep them legal. The company also sponsors the “Leaning Right and Turning Left” podcast Stanley hosts with Sadler. Fliers promoting that podcast are laid out on the reception desk outside Stanley’s General Assembly Building office and include the phrase “Powered by Pace-O-Matic.”
Asked if he remains retained by Pace-O-Matic and Sadler today, Stanley said, “Of course.”
“I represent them. I give them advice,” Stanley said. “That’s what lawyers do.”
Those associations haven’t led Stanley to abstain from voting on skill games and didn’t stop Senate leaders from picking him as one of three senators who will work out the fine print of a proposal to tax and regulate skill games instead of banning them.
Getting the bill passed is critical to Pace-O-Matic’s continued business in Virginia. Its failure would mean the company would have to pack up thousands of skill machines that are currently deactivated due to their illegal status. Its passage would allow the machines to be turned back on and start making money again, but the bill’s specifics could determine exactly how profitable they could be.
Supporters of the bill have called the machines a critical revenue opportunity for the state and the small businesses that host them. Opponents say allowing gambling to spread deeper into Virginia neighborhoods could backfire by exacerbating crime and gambling addiction.
Much work remains to be done on the bill as the Senate and the House of Delegates attempt to reconcile two dramatically different pieces of legislation. The House bill has a higher tax rate, stiffer state oversight and more detailed regulations for addressing gambling addiction and preventing those under 21 from playing the machines. The Senate bill has lighter regulations but would enable small businesses that host skill games to start getting revenue from them again with fewer obstacles and delays.
The differences between the two bills are going to be worked out in what’s known as a conference committee, which involves a small group of senators and delegates who usually meet privately to try to get legislation over the finish line.
In an interview Thursday, Stanley insisted he didn’t ask to be put on the conference committee and said the Ethics Council had cleared him to work on skill game legislation the same as any other legislator. He said his interest in skill games arose from a sincere belief that small business owners should have a shot at taking in gambling revenue instead of allowing it all to flow to big casino or horse-racing companies.
“I’m representing the public interest,” Stanley said, adding that his experience as a lawyer “helps me make a determination about what’s best for the commonwealth of Virginia.”
The senator allowed the Mercury to view the guidance he received from the Ethics Council on the condition that it not be published because much of the advisory body’s work is considered confidential.
When asked for a copy of the document, G. Stewart Petoe, the executive director of the Ethics Council, said all requests for ethics guidance are “strictly confidential.”
“We will not even confirm or deny that anyone has approached the Council for guidance,” Petoe said in an email.
The Ethics Council wasn’t envisioned as an independent check on the legislature empowered to police the behavior of General Assembly members. By law, any ethics guidance it gives is exempt from transparency rules. The council’s guidance can prevent General Assembly members from being prosecuted or disciplined as long as they make a “good faith” effort to follow it.
We will not even confirm or deny that anyone has approached the Council for guidance. – W. Stewart Petoe, Virginia Ethics Council executive director
Virginia’s ethics laws prohibit members of the General Assembly from taking part in any official action in which they have a “personal interest.” The definition of personal interest includes compensation from a business that exceeds $5,000. Though lawmakers have to disclose sources of income, General Assembly members with law firms aren’t required to disclose how much they were paid by specific clients.
The law also says a conflict doesn’t exist if a legislator’s interest in a matter considered by the General Assembly isn’t “substantially different” from that of “the general public” or a broader “class or group” of businesses that could potentially be impacted. In other words, if Stanley only works with one of several skill game companies operating in Virginia, that could be enough to clear him under the “substantially different” rule.
Though the skill game legalization bill affects multiple companies and the public, roughly half the skill machines in Virginia are believed to be Pace-O-Matic machines, according to the limited state data available.
Stanley said he had previously abstained from gambling votes and opposes gambling generally, but was “surprised” to learn that the Ethics Council found he could act freely on skill game legislation because there was no conflict.
“I was trying to actually confirm that what I was trying to do was right, by abstaining and staying out,” Stanley said.
Pace-O-Matic wasn’t a plaintiff in the lawsuit Stanley was involved in. But a different law firm that represents the company, Womble Bond Dickinson, was working in tandem with Stanley on the legal effort. Press releases issued by Stanley’s law firm about the case were reposted on Pace-O-Matic’s company website. Stanley said he provides “legal counseling services” to Pace-O-Matic on a variety of fronts.
A representative for Pace-O-Matic declined to comment on Stanley’s selection for the conference committee.
Conference committees often work out minor differences of opinion, but that’s not the case with the skill game legislation. Lawmakers still have to work out what kind of taxes and fees Pace-O-Matic and other companies will have to pay to operate skill games in Virginia. They have to decide whether local voters and local governments should have to approve skill games before they can operate in any particular city or county. They also have to figure out how the basic financial oversight should work, including the question of whether skill game companies should be allowed to self-report how much money they make or if regulators should get real-time access to machine data to ensure those numbers can’t be fudged.
In an interview, Sen. Creigh Deeds, D-Charlottesville, said he appointed Stanley as a conferee because he “knew more about” skill games than others. Deeds said he didn’t consider Stanley’s work with Pace-O-Matic to be a conflict of interest.
“I know Stanley,” Deeds said. “I trust him.”
The other senators picked as conferees on the skill game bill are Sens. Aaron Rouse, D-Virginia Beach, and Mamie Locke, D-Hampton. On the House side, the conferees are Dels. Cliff Hayes, D-Chesapeake, Terry Kilgore, R-Scott, and Paul Krizek, D-Fairfax.
Rouse, Hayes and Kilgore are all sponsors of the skill game legalization bill supported by Pace-O-Matic.
Krizek, a skill game critic, dramatically rewrote the House version of the bill to include tougher regulations than what the industry proposed.
Stanley said he intends to bring his “legal knowledge” to help the group create a bill that can win wide support in the General Assembly and the signature of Gov. Glenn Youngkin.
“I would vote for a bill that would stop gambling in Virginia tomorrow. But the door’s open,” Stanley said. “So what I wanted to make sure was that the local small business owner in Virginia could participate in it. That’s fairness. I don’t think I’m doing anything untoward or unethical.”
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