Pace-O-Matic And PA Casinos Unite Against Video Gaming Terminal Expansion

Written By Kevin Shelly on June 23, 2020
POM and PA casinos join forces against VGT expansion

The proverb “The enemy of my enemy is my friend” explains why Pace-O-Matic, the maker of Pennsylvania “skill games,” is suddenly allied with the state’s brick-and-mortar casino industry. They have united against the high-powered push to widely legalize more video gaming terminals — VGTs — throughout the Commonwealth.

For now, VGTs are allowed only at licensed truck stop locations. But a proposal would permit VGTs in bars, taverns, social clubs and other venues with liquor licenses, perhaps as many as 10,000. Each location could have as many as five of the machines — potentially meaning 50,000 new VGTs.

There are already 135 VGTs at 27 truck stops across the state.

VGTs allowed under the bill would vastly outnumber casino slots

By comparison, there are only about 25,000 slot machines in the state’s 12 casinos. Those slots are heavily taxed, licensed and regulated.

And while POM and casino forces such as Pennsylvanians Against Illegal Gambling have mostly behaved for the past year like a cobra and a mongoose locked in a death match, for the moment, they are the best of friends, according to POM spokesman Mike Barley.

Republican Senate leadership pushing the VGT proposal

Casinos and POM together oppose the latest gambling expansion bill.

The proposal is being pushed by leading Senate Republicans including Senate Majority Leader Jake Corman of Centre County and Senate President Pro Tempore Joe Scarnati of Jefferson County.

According to a report in Spotlight PA, a top lobbyist for a VGT company looking to expand hosted a fundraiser for Scarnati in Las Vegas with tickets ranging from $7,500 to $25,000. And then four top execs at Golden Entertainment combined to contribute $42,500 to a political action committee run by Scarnati and close associates.

Discussion of VGTs behind closed doors today

Their majority caucus is discussing the proposal this afternoon in Harrisburg, an unusual move at this time of year since there is already a temporary state budget in place.

At least 26 Republicans must vote to move the bill along. There are 29 Republican senators, and some have gone on record already as opposing the expansion.

“That’s a tough climb for them,” said Barley of the needed vote count.

PlayPennsylvania will update this story as more information from the caucus become available.

“This legislation will kill the skill game industry”

While some publications have called the measure a proposal to expand VGTs while also furthering skill games, that’s incorrect, according to Barley.

His company recently sent out the following letter to Republican members of the senate:

Dear Senator,

We want to address an effort taking place next week to pass VGT legalization that will:

  • Harm casinos, many of whom are not even open yet, by putting slot machines on every corner
  • Cannibalize the state lottery
  • Destroy the legal skill game industry

The legislation purports to support VGTs and skill games, but that is untrue. This legislation will kill the skill game industry. The legislation supported by VGT companies will kill thousands of Pennsylvania jobs, including over 100 manufacturing jobs in Williamsport.

As the leading manufacturer and supplier of legal skill games, we have not been contacted and have had ZERO involvement in the drafting of any of the 187 pages of this legislation. Additionally, an issue as complicated as this one deserves to have full transparency and public input from all stakeholders and Pennsylvanians.

For these reasons, we are strongly OPPOSED to the expansion of VGT legislation that is being pushed forward in the State Senate next week.

Showing the current alliance between casinos and POM, a casino lobbyist provided PlayPennsylvania with a copy of the letter.

Bill would curtail skill game locations

Barley pointed to an interview in PennLive on Monday night where Corman made plain his goal of eliminating all skill games unless located at establishments with liquor licenses. The bill would also allow a degree of local control through an opt-out process and promises tax relief, according to the interview with Corman.

For now, skill games are at bars, restaurants, pizza shops, fraternal organizations, fire halls and the like. There are perhaps as many as 20,000 such games in use currently, with maybe half of them from POM.

Skill games exist in a gray area

The skill games exist in a legal gray area.

For now, they not regulated, not licensed and not taxed — although POM has said it supports doing so.

One court ruling deemed skill games illegal, a position endorsed by the Pennsylvania Gaming Control Board (PGCB). An earlier court ruling had found POM’s machines to be games of skill, though, and not governed by state regulations.

PA AG has stopped pursuing cases

And while it has been ruled that law enforcement, for now, could seize all unlicensed games, the PA Attorney General quietly shelved taking action until there is a clear decision by a higher court or legislatively.

Senate Democrats seem for now to solidly oppose the proposal, said Barley.

And there is a schism in the Republican ranks, making passage problematic, he said.

“But it’s Pennsylvania. You never know,” he added.

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Kevin Shelly

Kevin C. Shelly is an award-winning career journalist who has spent most of his career in South Jersey. He's the former assistant city editor of The Press of Atlantic City, where he covered the casino industry and Atlantic City government as a reporter. He was also an investigative, narrative enterprise, and features reporter for Gannett’s Courier-Post.

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