Presque Isle Downs and Casino is concerned about the affect skill games are having, not only in Erie County, but across the state, too. Skill machines are not taxed and regulated, and operate similarly to casino slot machines. That has made the games a controversial topic over the last several years.
Skill games have been criticized for taking business away from business from Pennsylvania casinos, particularly slot revenue. Presque Isle general manager, Gary Hendricks, believes that skill games are getting off easy. He told Erie News Now:
“It’s competition. We’re not afraid of competition, we just want a level field. And it’s not level today.”
Hendricks discussed the challenges Presque Isle is facing in the revenue department, too. Skill games are technically legal in the Keystone State. The Commonwealth Court of Pennsylvania overturned a municipal law banning skill games in Philadelphia earlier this week.
Presque Isle gradually losing revenue in last three fiscal years
Many Pennsylvania casino operators have claimed that skill games have impacted revenue for properties across the state. However, the extent of that impact, if at all, is unknown.
Pennsylvania casinos are taxed at a 52% rate for slot machines, which goes even higher when accounting for other miscellaneous payments for the Pennsylvania Gaming Control Board (PGCB) and local share assessments. All told, according to Hendricks, the effective tax rate is 63.8% for slot machines. He said:
“We believe the proof is in the pudding. We continue to see our revenue get a little bit softer every year.”
Presque Isle’s revenue totals have dropped in each of the last three fiscal years, according to the graph (excluding FY 2020/2021, which was impacted by the pandemic):
Through four months of FY 2024/2025, the casino is on pace to produce $91.2 million, which would be an increase of 1.4% from the previous year.
Skill games legalization gaining momentum
The Pennsylvania Supreme Court is set to rule on the legality of the machines at some point in the near future. However, a timetable has not been established.
Most recently, the Commonwealth Court overturned a law that banned skill games in Philadelphia gas stations and corner stores. Those business owners are now allowed to offer the machines.
The decision had a trickle down effect to Bensalem, which is located just outside of Northeast Philadelphia. The township told PlayPennsylvania earlier this week that it is putting its own skill games ban on hold.
The same Commonwealth Court ruled skill games as legal in a decision last December. Mike Barley, spokesman for Pace-O-Matic (POM), a Georgia-based skill games manufacturer, told PlayPennsylvania:
“We are confident that we also will win the state Supreme Court challenge when it is heard, ending all unlawful skill game bans in the state, including the recently passed ban in Bensalem.”
All eyes are are going to on the Supreme Court ruling, which, hopefully, is at some point in 2025.
