The debate surrounding so-called games of skill in Pennsylvania has been a hot topic in government circles for some time now. These untaxed and unregulated video gaming machines, which closely resemble slot machines, have sparked a range of opinions and concerns among various stakeholders in the state.
At the heart of the issue is the distinction between these skill games and traditional slot machines. While they may look similar, manufacturers and courts have determined that the outcome of these games is based on a player’s skill rather than chance. This key difference has led Pennsylvania courts to rule that skill games fall outside the state’s Gaming Act, exempting them from the same regulations and taxes imposed on slot machines.
The presence of these machines in bars, convenience stores, gas stations, and fraternal clubs has created a unique divide among supporters and detractors. Small business owners see them as a valuable source of additional income, while manufacturers argue that taxing and regulating them could generate much-needed revenue for the state. On the other hand, the casino industry opposes regulating these games, and public safety advocates fear potential increases in crime and addiction issues.
The regulatory status of skill games remains in a gray area, with court decisions like the 2023 ruling from Pennsylvania’s Commonwealth Court affirming their legality. Judge Lori A. Dumas stated that the Pennsylvania Skill-branded games developed by Pace-O-Matic are not slot machines and are therefore not illegal under state law.
Despite their legal status, skill games are not subject to the same taxation and regulation as traditional gaming machines. Proponents argue that this presents an opportunity for the state to tap into a new revenue stream, especially as budget deficits loom on the horizon.
Governor Josh Shapiro has called on lawmakers to pass legislation to regulate skill games, proposing a 42% tax on daily gross gaming revenue that could generate over $150 million in the fiscal year. With the state facing potential budget shortfalls, the regulation of skill games and the legalization of cannabis have emerged as potential solutions to address revenue needs.
While the potential financial benefits are clear, concerns about public safety have also been raised. District attorneys have highlighted an increase in crime related to these games, citing instances of theft and security vulnerabilities in establishments housing skill games. Calls for regulation to include consumer protection measures and security requirements have been made to address these concerns.
State Senator Joe Pittman has expressed concerns about the safety of mini-casino parlors hosting skill games, emphasizing the need for stringent oversight and regulation. Pace-O-Matic has voiced support for regulations that prioritize public safety and ensure that only legitimate skill games are in operation.
As discussions continue in the legislature, the path to regulating skill games remains complex. Lawmakers must navigate the intricacies of the issue while balancing the need for revenue and public safety. Despite the challenges, there is optimism that a compromise can be reached to address the concerns surrounding skill games in Pennsylvania.