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After years of court battles over Pennsylvania skill games, the Supreme Court ruled Monday that the machines are subject to both the Pennsylvania Gaming Act and the Crimes Code, dealing a major setback to an industry that has expanded into thousands of businesses across the commonwealth.
The Pennsylvania Supreme Court overturned lower-court decisions that had allowed skill games to operate in a legal gray area for years.
However, the court also issued a 120-day stay, preventing law enforcement from taking action against operators while lawmakers continue debating regulation and taxation proposals.
Previous rulings were deeply flawed
Skill games have proliferated across the state in bars, restaurants, convenience stores, gas stations, and other businesses, with support from the lower courts. That changed Monday when the state’s highest court reversed the lower courts’ decisions.
Justice David Wecht, writing for the majority, said the lower court’s interpretation of Pennsylvania law was “deeply flawed.” He went on to write in a 66-page document:
“The Commonwealth Court was incorrect on both points. Under a plain reading of the law, ‘skill game’ devices are subject to both the Gaming Act and the Crimes Code.”
The ruling is a major setback for Pace-O-Matic, the Georgia-based manufacturer behind Pennsylvania skill machines that has been defending the games in court since 2019.
A spokesperson for Pace-O-Matic told PlayPennsylvania:
“We are disappointed with the decision by the Pennsylvania Supreme Court and strongly believe it does not accurately reflect the facts presented – notably, the same facts that led to a string of lower court rulings affirming the legality of our skill games, including a unanimous Commonwealth Court ruling.
“Sadly, this opinion will have far-reaching consequences, with more than 10,000 Pennsylvania small businesses and fraternal clubs becoming the real victims.”
120-day stay period
According to the ruling, the court acknowledged that many business owners and operators relied on previous court decisions that found skill games legal. The court issued a 120-day stay, stating:
“We are further mindful of the potential disturbance that our correction of the prevailing case law may cause to business owners and other good-faith participants in the industry.”
The stay prevents law enforcement from taking adverse action against skill game operators while lawmakers weigh potential legalization.
Legislation remains an option
Though the court ruled against skill games, it made clear the machines can be legalized through legislation. Wecht wrote:
“Determining and manifesting the ‘public policy’ of Pennsylvania is the prerogative of the legislative branch of our government, not this judicial branch.”
POM told PlayPennsylvania it agreed with that statement and would continue to work with lawmakers “toward a legislative solution for skill games.” It also is pushing for bills introduced by Rep. Danilo Burgos and Sen. Gene Yaw.
The ruling is a huge blow to the small businesses that relied on the revenue. POM noted that the companies have been put in tough decisions because of the rulings:
“They are now potentially left facing an impossible choice: cease operating these games and lose an important source of revenue, or endure a legislative solution that could bring excessive regulation and crippling taxation, which will force them to cease operating these games and lose an important source of revenue.”
Gov. Josh Shapiro has been on the record in favor of regulating and taxing the games at a 52% rate, which he included in his fiscal year budget in February.
With the new fiscal year starting July 1, talks would have to heat up quickly for a regulation plan to be put in place.
