Share 
Gov. Josh Shapiro signed Pennsylvania’s $50.8 billion 2026-27 budget on July 12, officially confirming what had been expected since earlier in the month: no deal on regulating or taxing skill games made it into the final package.
For the fifth consecutive year, the budget for the fiscal year was late, and a resolution on skill games always looked like a long shot.
Exactly one month ago, the Supreme Court ruled that skill games are illegal, and gave lawmakers 120 days to come up with legislation. After that, law enforcement is able to seize machines that are found in bars, restaurants, convenience stores, gas stations, and other businesses.
What made it in vs. what didn’t
Shapiro’s office confirmed the $50.8 billion budget addresses several important topics, including:
- Education
- Pension COLAs for pre-2001 retirees
- Data center reporting requirements
- Nearly 400 more state troopers
These inclusions are obviously important to the Keystone State. However, it’s another year of excluding skill games taxes from the budget.
In Shapiro’s proposal back in February, he eyed a 52% tax on the games, which would have raised $8 billion in tax revenue over the next five years.
Lawmakers appear to be far apart on a regulation and tax framework for skill games. Here are the wide variety of ideas that have been introduced in legislation:
- Sen. Gene Yaw: Introduced SB 626, which enacts a 16% tax on the machines
- Sen. Gene Yaw: Introduced SB 1079, establishing fees
- Sen. Chris Gebhard: Introduced SB 756, which includes a 35% tax on the machines
- Rep. Kerry Benninghoff: Introduced HB 1619, which would place no additional tax on the games
- Rep. Danilo Burgos: Introduced HB 2046, establishing fees and cutting taxes for Category 4 mini-casinos
- A second proposal from Burgos that would impose a $500 monthly fee per terminal and cap the number of machines statewide at 50,000
Clock is ticking
The 120-day window the Supreme Court issued to lawmakers expires on October 13. At that point, the machines are subject to seizure from law enforcement.
Representative Kerry Benninghoff downplayed the significance of the deadline itself. He said:
“I think that 120 days is somewhat arbitrary. It’s about what’s right and doing it well and not hitting a particular deadline. I think that deadline is more for Skills, that their machines are going to be removed out of the establishments at that point.”
Removing machines from bars and clubs would be a blow to the small businesses that rely on that revenue.
The regulated industry is in favor of a tax that closely mirrors the rate Pennsylvania retail casinos pay for slots, which is 54%.
Pace-O-Matic (POM), a Georgia-based skill games manufacturer, is in favor of a lower tax rate, and told PlayPennsylvania last month:
“We are focused on supporting legislation that lifts up our small businesses and fraternal clubs with solutions that allow them to continue to operate skill games and earn this important supplemental revenue.”
The race to tax the machines is likely to come down to the wire.
