Pennsylvania Senator Gene Yaw (R-23) announced last week that he has reintroduced a bill to regulate and tax skill games, with the goal of helping small businesses and raising revenue for veterans’ organizations. State legislators are divided on the issue, with some wanting to ban the devices while others, like Yaw, would prefer to see their legality formalized. Yaw wrote a memo earlier this year stating his continued intent to bring the legislation to fruition.
Yaw had also proposed a tax on skill games during the 2023-24 session. However, the bill expired without passing at the end of 2024. With more momentum mounting towards regulating skill games, 2025 could be the year a deal gets done.
Yaw sticking with similar plan
The senator has been a huge advocate for the regulation of skill games to help keep businesses and veterans’ organizations alive. One way to help these establishments pay staff, bills and donations is through skill games.
In Senate Bill 626, Yaw is keeping the same tax rate, 16%, he proposed last year. Anything higher would be a threat to small businesses, Yaw said in a statement:
“There is broad recognition of the need to regulate skill games. But if we set the tax rate too high, we’re not regulating – we’re eliminating. Other proposals are being introduced that could drive skill games out of business entirely.
“Without them, so many of the small businesses, veterans’ organizations, fraternal clubs, and taverns they support cannot, and will not, survive. I choose to support the economic backbone of Pennsylvania – our small businesses – over the corporate conglomerates.”
Yaw would also task the Pennsylvania Department of Revenue with sole regulatory authority, in terms of distribution of skill games. However, the Bureau of Liquor Control Enforcement would be in charge of enforcement.
The bill will also strengthen penalties for unlicensed and illegal operators within the state. A limit on the number of machines per establishment would also be enforced.
Yaw’s proposed bill should have bicameral effort
Representative Danilo Burgos has been in lockstep with Yaw’s plan on the House side. Burgos introduced similar legislation during the last session, which also did not pass.
However, in December, Burgos wrote a memo with an intention of bringing his skill games bill back. His ideas are extremely similar to Yaw’s, he wrote:
“My legislation would levy a 16% tax on skill video game machines, which would bring in close to $300 million in revenue in the first year. The bill would also put skill games under the Department of Revenue’s oversight.
“By doing so, it would create more stringent regulations and require testing, registration, enforcement, and accountability. Further, it would mandate the number of games allowed per location, to prevent mini casino-like environments in family establishments.”
Many powerful politicians are in favor of regulating the machines, but remain far apart on the tax structure. Gov. Josh Shapiro proposed a 52% tax in his 2025 budget address in February.
That is certainly not in the ballpark of what Yaw and Burgos were thinking. Pace-O-Matic (POM), a Georgia-based skill games manufacturer, has advocated for the 16% tax. POM was “disappointed” with the governor’s high tax rate, which would “hurt the thousands of Pennsylvania bars, restaurants, fraternal clubs, volunteer fire companies, VFWs, and American Legions that count on the supplemental income from skill games.”
