Regulations and a tax structure for Pennsylvania skill games could appear in Gov. Josh Shapiro‘s FY 2025/2026 budget address on Tuesday. It wouldn’t be the first time the Governor has attempted to take the lead on the issue.
Gov. Shapiro included tax revenue in his fiscal year budget from last February. It never came to fruition, as bills on the House and Senate both stalled during the legislative season.
There seems to be added sense of urgency to get something done this time around. There have already been memos written by Senator Gene Yaw, Representative Danilo Burgos and Senate President Pro Tempore Kim Ward and Senate Majority Leader Joe Pittman.
Shapiro has supported skill game regulation in the past
The topic of skill games regulation is something Gov. Shapiro has been in favor of. Tuesday’s address is another chance for Shapiro to cement his stance.
It’s unknown what type of regulation and tax structure Gov. Shapiro chooses to employ. Last February, he proposed a 42% tax on the games, which was to be regulated by the Pennsylvania Gaming Control Board (PGCB).
Gov. Shapiro estimated that skill games would generate $150 million in the first year of regulation and $313 million by the next year. There’s no word on if those estimates will remain the same.
The money generated from the machines would benefit the state’s poorest schools.
Difference of opinion of tax structures
There’s a lot to be discussed regarding the way skill machines are taxed in Pennsylvania. Gov. Shapiro’s proposed 42% tax last year is far from Yaw’s and Burgos’ number.
Yaw and Burgos introduced identical legislation last year that taxed skill games at a 16% clip, with the Department of Revenue in charge of oversight. Though Ward and Pittman did not provide a tax percentage in their memo last month, they do want the PGCB to regulate the machines.
There are numerous lawmakers and politicians who are in favor of regulation. Pace-O-Matic (POM), a Georgia-based skill games manufacturer who operates in the Keystone State, is also pushing for regulation, too.
POM is in favor of the Yaw and Burgos plan of 16%, which helps small businesses create another source of revenue. Gov. Shapiro, on the other hand, wants to generate as much money as possible for the Commonwealth.
For the first time, there seems to be agreement that the games should be regulated. However, the tax percentage is the million dollar question. It’s likely that it falls somewhere between the 16% and 42%.
There will be a better idea of where Gov. Shapiro stands after his budget address on Tuesday.
