Pennsylvania is ready to fight back against skill-based games in the state.
On Monday, Sen. Tommy Tomlinson, along with the Pennsylvania Lottery, the Pennsylvania State Police and senior groups, announced proposed legislation to combat these games.
Senate Bill 710 would strengthen existing law, according to a release, “by making it a criminal offense for anyone to knowingly make, assemble, maintain, lease or sell Games of Skill.”
These groups already believe these skill games are illegal, but the bill would more clearly define offering the machines as a crime because there is some uncertainty in current law because the “skill” distinction makes the machines legal in some eyes.
Details of the bill
These dubious games of skill, long a stick in the PA Lottery’s craw, have cost the lottery an estimated $138 million in sales over the past year, according to the release. As a result, funding for senior programs in Pennsylvania has been short-changed.
Enter Tomlinson and his proposed bill.
If passed, this legislation would call for a first offense to incur a first-degree misdemeanor that comes with a fine of at least $5,000 per violation upon conviction. Second offenses also draw a first-degree misdemeanor, though the fine would increase to at least $10,000 per convicted violation. More violations would carry a third-degree felony along with a fine of at least $15,000 per conviction.
The intent is to create steep-enough penalties to deter offenders from offering unregulated, untaxed, and unsanctioned gambling.
Illegal skill games abundant throughout PA
Many illegal games of skill take place in businesses that have received liquor licenses. The Pennsylvania State Police Bureau of Liquor Control Enforcement, which oversees these establishments, has confirmed that suspected illegal gambling devices operate in every county throughout the state.
“We continue to see an increase of suspected illegal gambling devices within licensed liquor establishments, but perhaps even more concerning is the illegal gambling happening in convenience stores, strip malls, and shopping centers,” Major Scott T. Miller, director of the control enforcement, said in the release.
“This bill provides clear guidelines to aid in voluntary compliance by business owners, club officers, and vending distributors, as well as enhanced penalties for those who violate the law.”
Not only that, but the bill also emphasizes that the state will not take these illegal games lightly, as shown by the penalties detailed within.
“These machines have the potential to cost the Lottery hundreds of millions of dollars in future harm,” Drew Svitko, the PA Lottery executive director, said in the release. “It’s imperative that we take action now to protect the funding that supports the programs that older Pennsylvanians rely upon each year.”
Illegal games cut into PA Lottery revenue
The 2017 gambling expansion law allowed for the PA Lottery to up the number of games it offers to Pennsylvanians while also expanding its reach with the creation of its online lottery and PA Lottery app. The lottery introduced iLottery as well as Keno and Xpress Sports last year.
Yet the illegal games of skill remain prevalent statewide, posing as a direct threat to the lottery.
Svitko estimates that 70% of annual revenue for the PA Lottery stems from scratch-off tickets. But a team of economists noted that the lottery loses some $95 million in scratch-off sales each year because of illegal games of skill.
Those games, Svitko said, “represent competition in the exact environments in which we’re trying to get our monitors.” Additionally, they produce higher rates of return for owners than what the lottery pays.
About 18% of lottery retailers host at least one illegal skill-based game machine, Svitko said earlier this year. Nearly half that percentage did so the year prior. The PA Lottery release estimated that approximately 5,050 illegal machines are spread across lottery retailers, which leads to a PA Lottery loss of about $2,284 per machine, according to the release.
“The Games of Skill machines are appearing across the state and we are deeply concerned the harm will only increase,” Svitko said. “Senator Tomlinson’s legislation will crack down on the machines and preserve hundreds of millions of dollars that help seniors afford prescriptions, transportation, meals and more.”
“I am concerned about the negative effect these unregulated, unlicensed, untaxed gambling machines have on unsuspecting players, youth and Lottery funds which support essential services for our senior citizens.”