Parx CEO Eric Hausler testified in front of the House GOP policy committee earlier this month, and provided statistics that suggest Pennsylvania skill games are impacting casinos in the Commonwealth.
Skill games have been a controversial topic in the Pennsylvania gambling industry for years. Pace-O-Matic, a Georgia-based skill games manufacturer, is seeking regulation while also claiming that its games have no impact on the industry.
Hausler’s information argues that there is an impact. Either way, skill games appear to be headed towards regulation as Gov. Josh Shapiro proposed a 42% tax in his upcoming FY budget.
Pennsylvania slot revenue increased only 4% since 2018
Skill games have not proliferated in neighboring states such as Delaware, New Jersey, Maryland, Ohio and New York, as they have in Pennsylvania.
Hausler presented a table to the policy committee that detailed the growth of slots in those neighboring states where skill games do not exist.
| Year | Delaware | Maryland | New Jersey | New York | Ohio | Pennsylvania | Total (ex. PA) |
|---|---|---|---|---|---|---|---|
| 2018 | $352.4 million | $1.09 billion | $1.8 billion | $2.43 billion | $1.60 billion | $2.37 billion | $7.27 billion |
| 2019 | $366 million | $1.14 billion | $1.77 billion | $2.54 billion | $1.67 billion | $2.36 billion | $7.48 billion |
| 2021 | $393.1 million | $1.30 billion | $1.87 billion | $2.53 billion | $2.02 billion | $2.29 billion | $8.12 billion |
| 2022 | $405.3 million | $1.33 billion | $2.04 billion | $2.66 billion | $2.03 billion | $2.39 billion | $8.46 billion |
| 2023 | $425.7 million | $1.33 billion | $2.10 billion | $2.82 billion | $2.10 billion | $2.46 billion | $8.78 billion |
| Total Growth Percentage | 21% | 22% | 16% | 16% | 31% | 4% | 21% |
Ohio and Maryland have experienced the most growth since 2018. Those five states, excluding Pennsylvania, have increased slot revenue, on average, at 21%. The Keystone State, on the other hand, displayed just 4% in aggregate growth despite the addition of several properties since 2018, including:
- Live! Casino Pittsburgh (2020)
- Live! Casino Philadelphia (2020)
- Hollywood Casino York (2021)
- Hollywood Casino Morgantown (2021)
- Parx Casino Shippensburg (2022)
Hausler made clear that skill games are a huge issue, which has been the reason for the slow growth in the Keystone State.
“Pennsylvania is the only state in the region with skill games and the impact is clear,” Hausler said. “Slot revenues at PA retail casinos are growing well below slot revenues in surrounding states because of unregulated and untaxed skill games.”
The interesting case of Virginia and skill games
Pennsylvania could draw comparisons to Virginia, too, which had skill games, before banning them entirely last November.
In the four months since the ban, slot revenue in Virginia increased 11% per day. During a Pennsylvania Gaming Control Board meeting last month, Rivers Casino’s location in Portsmouth, Virginia, increased slot revenue 39.2% in March from October.
Hausler detailed what that kind of increase could do for the Keystone State.
“In Pennsylvania, an 11% increase in slot win per day would translate to more than $150 million of additional tax revenue to the Commonwealth per year at our 54% tax rate,” he told the committee.
POM has been on the record several times stating that skill games have no impact on the casino industry. Hausler provided evidence to the contrary.
Parx eying skill games ban, but will accept ‘rigorous’ regulations
Hausler told PlayPennsylvania in February that he is not giving up his fight to ban the games altogether in the state.
“There is no guarantee that the legislature and the governor will be able to agree on a regulatory and tax framework,” Hausler said.
“We continue to believe that the games in operation today are essentially slot machines. We still believe that the old adage applies: if it looks like a duck, walks like a duck and quacks like a duck, it is a duck. We are confident the Supreme Court will take a more fulsome view of what constitutes a slot machine.”
Many in the industry have come to the realization that the games are here to stay. Along with Gov. Shapiro’s proposal, there are House and Senate bills that support skill games tax and regulation.
While there are thousands of machines across the state in establishments such as pizza shops, convenience stores and gas stations, strict regulation is a must for the games to stick around, according to Hausler.
“A rigorous regulatory and tax structure for skill games should remedy many of these concerns and put sensible limits on the location of these games,” he said in February.
Hausler echoed similar sentiments at the hearing earlier this month, saying the machines should be “very limited.”
At this point, it’s a matter of when the games will be regulated, not if.
