The company’s legal department has conducted a thorough review of the relevant Kentucky statutes, administrative codes, and established case law. Based on this analysis, it is concluded that the company’s coin-operated amusement machine software does not violate Kentucky Code 528.010 or the associated gambling laws.

The State of Kentucky generally prohibits gambling and the use of gambling devices under Kentucky Code 528. This code section was recently amended by the Kentucky Legislature and signed by the Governor. Consequently, the interpretation of this statute remains open due to the absence of court cases that could provide guidance.

In Kentucky Code 528.010 (6) (a), gambling is defined as staking or risking something of value on the outcome of a contest, game, gaming scheme, or gaming device that is based on an element of chance. This definition encompasses playing or offering any game, contest, or competition that involves a gambling device and entails the possibility of receiving something of value based on a certain outcome.

However, Kentucky Code specifically excludes certain activities and devices from the definition of gambling, such as contests or games where participation eligibility is determined by chance and the ultimate winner is determined by skill, licensed charitable gaming, E-sports competitions, skill-based contests, and the devices listed in Code 528.010 (7) (b), including French Pool, specific pinball games, charitable gaming equipment, coin-operated amusement machines, and devices used in esports competitions and skill-based contests. Similarly, the Kentucky Code excludes any coin-based amusement machine from the definition of gambling. Therefore, if the game or software falls within the definition of a coin-operated amusement machine, operating that machine would not violate Kentucky’s gambling laws.

Kentucky Code 528.010 (+) (a) defines a coin-operated amusement machine as a lawful machine that requires the direct or indirect payment of consideration, provides music or amusement through mechanical operations, and may or may not dispense merchandise.

The Legislature has consistently emphasized the requirement of an element of chance for a violation of Kentucky’s gambling code. In the current statute, the Legislature expanded the scope to include skill games. If chance and skill are absent from the operation of a coin-operated amusement machine, then the operation of that game would not contravene Kentucky’s gambling statutes.

Regarding the operation of the coin-operated amusement machine software, the legal department has reviewed it and determined that it does not incorporate an element of chance or skill. The software presents players with a predetermined outcome before they commence playing the game. These software games provide amusement through mechanical operations. Consequently, it is believed that the software satisfies the definition of a coin-operated amusement machine according to the Kentucky statutes and should not be deemed a slot machine or an illegal gaming device.