Senator Amanada Cappelletti and Chairwoman of the Senate Democratic Policy Committee, Senator Katie Muth, hosted a policy hearing on the status of Pennsylvania skill games last week.
Many regulators attended and spoke at the hearing, including members from the Pennsylvania Gaming Control Board (PGCB) and PA casinos.
Skill games, which are a form of unregulated gaming, operate similar to casino slot machines and have been a controversial topic over the last several years. The Pennsylvania state legislature seemingly has three options for skill games:
- Keep them unregulated
- Regulate skill games with tax structure
- Ban skill games altogether
Regulators made their pitches and requested a decision sooner rather than later.
PGCB member addresses PA skill games in front of legislation
Back in April, PGCB Chair, Denise Smyler, had trouble coming to terms with regulating Pennsylvania skill games. She said:
“I don’t see how you can regulate them if they’re not on equal footing with the VGTs and casinos.”
It doesn’t appear that skill games and casino slot machines will be on equal footing, if regulated. Pennsylvania Senator, Gene Yaw (R-23), has proposed a 16% tax rate in a framework he developed in June. Casino slot machines are taxed at 52%.
PGCB Executive Director, Kevin O’Toole, sung a different tune during last week’s policy hearing. O’Toole didn’t specify his stance on the matter. However, he did request to have the responsibility to regulate skill games should legislation pass them.
“It is also the Board’s position, should the General Assembly decide to legalize and regulate skill-based games in any context, that the regulation of this activity be put under the Board’s jurisdiction,” O’Toole said. “As it is the Board that is the only agency in the Commonwealth with the ability, the experience and the know-how to regulate slot machine activity.”
O’Toole is confident that the PGCB, should skill games become legal, can handle the regulation. He also said that there could be an uptick in staffing if skill games regulation occurs under the PGCB.
In the opinion of regulators, skill games are direct competition to casino slot machines. O’Toole put the onus on the legislature to make a decision for peace of mind.
“To resolve this uncertainty, a legislative determination one way or the other will need to be made,” O’Toole said. “As a policy matter, it’s entirely up to the General Assembly whether to legalize and tax these machines or to prohibit them.”
Pennsylvania casinos and AGA provide much stronger stance
Essentially, the PGCB does not have a position on skill games. Although, it would like a decision one way or another.
The American Gaming Association (AGA) and Pennsylvania casinos, on the other hand, wish that skill games get banned completely.
The AGA released statistics of a survey it conducted on skill games the same day as the Pennsylvania policy hearing. A total of 2,002 American registered voters over the age of 21 participated in the survey:
- 71% say “skill” machines lack the player protections that are available to players in casinos.
- 64% agree “skill” machines are too easily accessible to children.
- 56% say “skill” games increase the risk of crime and endanger employees and customers of businesses where devices are located.
AGA President and CEO, Bill Miller, said in a statement:
“Unregulated machine manufacturers have built their businesses by duping consumers and small businesses while avoiding taxes, oversight and consumer protections. These results are further evidence that Americans see these machines as a threat that should be eliminated, not regulated.”
Penn Entertainment VP of Public Affairs and Government Relations, Jeff Morris, also provided a strong testimony to ban skill games. Morris called skill games an “unregulated, unmitigated disaster,” and cited no consumer protections, increased crime in the counties that carry them and losses in casino revenue.
What’s next for Pennsylvania skill games?
The case is currently sitting in the Pennsylvania Supreme Court, where Lamb McErlane represents six PA casinos in opposition of skill games:
- Parx Casino
- Mohegan Pennsylvania
- Hollywood Casino at Penn National Race Course
- Hollywood Casino at The Meadows
- Harrah’s Philadelphia
- Wind Creek Bethlehem
The PGCB and Department of Revenue are also involved. All eight parties are in opposition to Pace-O-Matic (POM), a manufacturer of skill game machines based in Georgia.
Pennsylvania courts have ruled in favor of skill games to operate as is on three separate occasions.
The timeline of a decision to regulate or ban skill games remains unclear.