PA Skill Games Have Their Day In Court, Surrounded By Opposition

Posted on January 16, 2020 - Last Updated on January 17, 2020

The legal battle over whether or not “Pennsylvania Skill Games” are slot machines based on random chance – or skill games where decisions and knowledge influence the outcome – remains undecided for now.

A judge said Wednesday she will soon rule on a standing injunction preventing the PA State Police from seizing games distributed by Pace-O-Matic. While law enforcement authorities believe the machines to be illegal, the larger question of the legality and regulation of all skill games will remain unsettled for the near future.

A statement from Gov. Tom Wolf’s office made it clear where the fight will head after the injunction battle is decided.

Wolf said:

“The administration believes Pennsylvania must take a hardline on illegal gambling, including so-called ‘games of skill’ and other slot machines. These machines are illegal, unregulated and put senior programs at risk by siphoning revenue from the Lottery.”

Setting the pace – skill games proliferating

There are 24,000 slot machines in Pennsylvania’s highly regulated and heavily taxed casinos.

But there is an untold number – likely more than 15,000, and perhaps as many as 20,000 – unregulated devices labeled “skill games” in gas stations, convenience stores, fraternal organizations, pizza shops, and even strip mall arcades.

The injunction court battle pertains only to a game made by Pace-o-Matic.

Pace-O-Matic accounts for about half of the skill games, or about 10,000 of the devices in PA. The software is made in Georgia and machines are assembled in PA by Miele Manufacturing. There are also perhaps four or five rival distributors of what are also labeled skill games in PA, according to PA State Police.

Contradictory previous court rulings on skill games

Two court rulings have previously considered the legality of the machines. One in 2014 ruled Pace-O-Matic are skill games.

A ruling on skill games last November found the devices were not skill games, but rather slots.

The PA State Police, the Attorney General and a coalition of casinos and racinos organized as Pennsylvanians Against Illegal Gambling contend they are games of chance, not skill, and troopers began seizing machines following the November court ruling.

The Office of the Attorney General  provided the following comment to PlayPennsylvania:

“We maintain that POM is engaged in illegal activity under the Pennsylvania Crimes Code and the Gaming Act and we are committed to supporting law enforcement in its efforts to protect Pennsylvanians from the harms associated with illegal gambling.”

The anti-skills game coalition has hired Peter J. Shelly, a prominent Harrisburg public affair specialist, to beat the drum against skill games.

He recently wrote a long op-ed piece that ran on LancasterOnline, where he said:

“Illegal slot machines victimize young people and their families. They are easily accessible to young people. The Pennsylvania State Police has called their operation ‘ripe for corruption.’ These machines have pulled close to $200 million from the Pennsylvania Lottery, which funds senior centers, low-cost prescription drugs for seniors, and programs that allow seniors to stay in their homes.”

Injunction against enforcement at the heart of the hearing

After troopers seized some of Miele’s games late last year, his company had an injunction brought against further police enforcement on December 13.

The impact of those conflicting court rulings, as well as the injunction, created a quagmire of unanswered questions, such as:

  • Are the skills games simply unregulated gambling devices?
  • Or does their supposed skill component put them outside regulation under current PA laws?
  • Should skill games be readily accessible to those who are at least 18-years-old – and sometimes younger?
  • Or should the games be restricted only to those 21-years-old and up, as is the case with casino slots?
  • Is it fair skill games are untaxed, or should they be taxed? Casino slots pay 34%.

The hearing Wednesday only considered the injunction.

Pace-o-matic attempts to set itself apart

Adding to the stickiness, Pace-O-Matic skills games distributor Miele Manufacturing has filed a civil suit against a rival company claiming 3C Amusements’ machines are illegal gambling devices with no skill involved.

Company owner Louis Miele recently told Scranton-area TV station WNEP TV that rival machines distributed by other companies and sold as skill games actually do have predetermined outcomes and are thus illegal.

“A slot machine is a game of chance and the player of a slot machine has no determination on the outcome, unlike our machine which is a predominant game of skill and there is not an outcome unless the player interacts with our machine causing the outcome.”

A spokesman for Miele’s company told the Reading Eagle newspaper recently that state regulation and taxation are welcome.

Opposition, skill games debate far from over

Further court and legislative considerations are inevitable. There have been pushes to outlaw the games with a number of competing bills kicking around in the Legislature.

And meanwhile, Miele Manufacturing has hired prominent lobbyists and lawyers and given more than $270,000 in campaign donations according to the Associated Press.

After the inconclusive hearing Wednesday, the State Police said while they are complying with the injunction, they continue to investigate.

“Investigations into illegal gambling activities in the commonwealth are ongoing during this time. The department continues to pursue all legal avenues to combat illegal gambling in Pennsylvania. These illegal devices are siphoning off funding for programs that hundreds of thousands of seniors rely on. The Pennsylvania Lottery estimates the devices have resulted in the loss of more than $200 million in sales.”

This article was updated on Jan. 17 with a quote from the Office of the Attorney General.

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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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