Another Pennsylvania legislator, Sen. Dan Laughlin, is in favor of taxing and regulating skill games. However, he’s proposing revenue from the machines, as well as legalizing cannabis, go into a bucket called the Pennsylvania Legacy Fund. Laughlin’s idea is that the money in that fund would be invested for the future, rather than spent immediately.
More and more lawmakers are becoming in favor of regulating Pennsylvania skill games, and not banning them, because of the significant amount of tax dollars the machines can generate.
Gov. Shapiro proposed a 52% tax on the games back in February, with the General Fund receiving the majority of revenue. Laughlin’s idea is a little more creative, and cites another state already doing it.
Explaining Laughlin’s Pennsylvania Legacy Fund
Laughlin appears to be a believer in investing money, and not spending it immediately. He pointed to Alaska’s Permanent Fund as an example Pennsylvania could replicate.
In an op-ed in the Pittsburgh Post Gazette, Laughlin also would appoint an independent board to oversee the fund. The money would be stored away in the following manner, with a limit on withdraws:
“Revenues from cannabis taxation and gaming expansion would be placed into a carefully managed investment fund. Instead of spending the money immediately, the fund would be invested in a diversified portfolio of stocks, bonds, and real estate.”
Gov. Shapiro’s skill games proposal estimated the state could generate up to $8 billion over the next five years, if adopted. Laughlin laid out the benefits of preserving the revenue into an investment fund:
“First, economic stability — the fund would provide Pennsylvania with a reliable revenue stream, having a smoothing effect on our budget process to protect us from wild swings in funding.
“Second, fairness—why should today’s revenue be spent entirely when future Pennsylvanians could still benefit?
“Third, it’s a common-sense, bipartisan idea—conservatives can support it as a fiscally responsible, long-term financial strategy, while progressives can back it for its potential to support social programs and public investments.”
The money would also be a resource to curb illegal gambling in Pennsylvania, too.
Lawmakers are far apart on tax rates
Pennsylvania legislators are mostly on the same page about regulating skill games. However, some remain far apart on what tax rates should be.
Gov. Shapiro proposed a 52% rate in the 2025 budget, which he increased from 42% in 2024. Georgia skill-game manufacturer, Pace-O-Matic, opposes a rate that high, telling PlayPennsylvania in February:
“We are disappointed at the high tax rate on the games the governor proposes. The governor’s proposed 52% tax rate will hurt the thousands of Pennsylvania bars, restaurants, fraternal clubs, volunteer fire companies, VFWs, and American Legions that count on the supplemental income from skill games. At that high tax rate, many locations cannot afford to keep the games.”
Other lawmakers, Sen. Gene Yaw and Rep. Danilo Burgos, are spearheading efforts to make the skill games tax rate as low as 16%.
It’s still possible the Supreme Court makes the games illegal, as it is scheduled to weigh in on the case in the near future. However, there is no timeline.
While it’s likely the machines will be regulated, it’s still possible for the Supreme Court to change course and ban them outright.
