The momentum to ban Pennsylvania skill games has picked up steam. Sen. Amanda Cappelletti, D-Delaware/Montgomery, and Rep. Mark Rozzi, D-Berks, announced legislation last week to eliminate the games in the Keystone State.
Ultimately, the Pennsylvania Commonwealth Court will determine the legality of skill games. Despite some legislators wanting them banned, there are others who think the games should be regulated. However, operating in a gray area poses consumer threats and takes away business from retail casinos and PA casinos online.
PA legislators announce bill to outlaw skill games
Pennsylvania skill games have been a controversial topic of conversation over the last several years. Cappelletti and Rozzi are the latest set of representatives wishing skill games to be banned. Rozzi’s legislation, which is currently circulating for co-sponsors, is a companion bill to Cappelletti’s S.B. 969. He said in a statement:
“In addition to preying on users of the machines, skill games also steal money that should be going to Pennsylvania Lottery programs that support programs for our senior citizens. These games also divert casino patrons and negatively affect legal slot machine revenue. Given the 52% tax rate on slot machine revenue, this reduces payments to the Property Tax Relief Fund, the Race Horse Development Fund and the economic development and local share accounts that routinely help pay for important local projects and the operations of numerous non-profit agencies, including volunteer fire companies and other public safety agencies.”
The release also argued that crime has increased in counties where skill games are present. Cappelletti argued on behalf of the consumer. She said:
“These gaming machines can be found in convenience stores, restaurants, malls, gas stations and other places of business throughout Pennsylvania. Despite the illusion that the state has oversight, there are no consumer protection measures, prevention of play by minors, assistance for problem gamblers, money laundering controls, or other regulations protecting Pennsylvanians from these predatory machines.”
Why do members of the regulated Pennsylvania gambling industry want to ban skill games?
You won’t meet too many people from the regulated gaming industry, especially in the retail or online casino sector, who want to keep skill games around.
Cappelletti and Rozzi are examples of legislators who want to ban skill games, too. The two legislators, as does the regulated gaming industry, point to a lack of consumer protection as a huge reason to eliminate skill games.
During a policy hearing in August, PENN Entertainment VP of Public Affairs and Government Relations Jeff Morris called skill games an “unregulated, unmitigated disaster,” because of crime increase and lack of consumer protection.
During the East Coast Gaming Congress back in April, Pennsylvania Gaming Control Board (PGCB) Chair Denise Smyler laid out the risks of skill games:
“We are more concerned and focused about consumer protection. There are no age restrictions, anybody of any age can go in and play these machines. We have 20,000 people signed up for our self-exclusion program and any one of those 20,000 people can go into these illegal gaming establishments and spend as much time and money gambling. It cuts against them trying to fight their addiction.”
On the same day as the policy hearing, the American Gaming Association (AGA) published a survey on the negative effects skill games have on players and the regulated industry. 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.”
Another PA legislator provides case to regulate Pennsylvania skill games
The Pennsylvania state legislature seemingly has three options for skill games:
- Keep them unregulated
- Regulate skill games with tax structure
- Ban skill games altogether
As momentum has picked up on the legality of skill games, keeping them unregulated is the least likely scenario to happen. So, either skill games will remain legal in a regulated setting or become banned altogether.
While one side wants the games banned, there’s another that wants to keep them as a regulated form of gambling. Pennsylvania Senator Gene Yaw (R-23) introduced Senate Bill 706, which includes a tax framework to allow the games to operate.
Yaw claims experts have predicted that the regulation of skill games could generate approximately $300 million in immediate annual tax revenue. Here are some of the details on Yaw’s bill:
- 16% tax on legal skill games
- From the 16% tax, 50% will be deposited into the General Fund, while 22% will be proportionally distributed to both individual counties and municipalities based on their respective gross profit
- The remaining revenue will be directed to the Bureau of Liquor Control Enforcement (BLCE) for enforcement purposes
Should skill games be regulated, the PGCB requested that the machines be under its jurisdiction.
Current status of PA skill games
Right now, Pennsylvania skill games are able to operate within the Keystone State. However, a decision rests in the Pennsylvania Commonwealth Court.
The Department of Revenue (DOR), the PGCB and six PA casinos appealed a previous Supreme Court Court ruling, which has ultimately been sent back down to the Commonwealth Court.
A decision on the legality of skill games is nearing.