Pennsylvania skill games may not be going anywhere after all. Pennsylvania Senator, Gene Yaw (R-23), introduced legislation that would regulate the skill games industry.
A sound tax structure to skill games could keep them in business and end the ongoing feud with PA casinos.
However, Denise Smyler, Chair of the Pennsylvania Gaming Control Board (PGCB), brought up additional concerns about regulating skill games at the East Coast Gaming Congress (ECGC).
Pennsylvania Senator looks to regulate skill games
Sen. Gene Yaw (R-23) announced last week that he will be attempting to establish a framework and tax structure on skill games in Pennsylvania.
In a memo sent out to Senate members, Yaw pointed out:
“Skill video games, operated in a regulated environment, will significantly benefit the Commonwealth by providing substantial revenue and creating jobs. All games will be required to be connected to a terminal collection and control system that allows the Commonwealth to monitor all transactions and ensure that all taxes are accrued and paid.
“Upon passage of this legislation, experts estimate that approximately $300 million in annual tax revenue will immediately flow to the Commonwealth.”
Under Yaw’s proposed legislation, all games would be accounted for by the Commonwealth. The bill would also penalize any unlicensed and illegal skill games in the state.
Skill games manufacturer also requests additional regulation
Pennsylvania skill game manufacturers have alluded to additional regulation in recent statements.
A court order in February announced that the Commonwealth wrongfully seized four PA skill machines in raids conducted in Monroe County in 2021.
After the ruling in February, Mike Barley of Pace-O-Matic (POM), a manufacturer of skill game machines, released the following statement on regulation:
“Every time the legality of our skill games has been called into question, the legal status of our games has been upheld by the judiciary. Pace-O-Matic stands out among our competitors as the active and driving force seeking additional regulation and taxation. We remain steadfast in our commitment to working with the state General Assembly and asking for legislation providing additional regulation and increased tax money for the state.”
Up to this point, PA skill games have been victorious in every bout with the regulated gaming industry. The Commonwealth has ruled in favor of skill games two other times in May 2022.
PGCB lists concerns about skill games
Smyler spoke in front of an audience on a panel discussing regulated gaming vs. unregulated gaming at the ECGC. She raised several concerns that skill games pose to the regulated gaming industry:
“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.”
Smyler addressed if skill games can be regulated and coexist with land-based casinos. She said:
“It is upon the shoulders of the legislature to determine whether they want to regulate them. I don’t see how you can regulate them if they’re not on equal footing with the VGTs and casinos. Are they going to have the same tax structure? It’s 52% on slot machines and VGTs. Are they going to go through the same rigorous background investigations? Anybody with a criminal record would not pass the background investigation. And it’s not just them, their employees and their games. Would all of that pass? That’s what it would take to regulate them.”
Though Smyler has not seen Yaw’s plan yet, she brought up valid arguments against the regulation of skill games.
Current update on Pennsylvania skill games
Currently, the skill games decision is heading to the Pennsylvania Supreme Court. Lamb McErlane represents the six PA casinos in opposition of skill games:
- Parx Casino
- Mohegan Pennsylvania
- Hollywood Casino at Penn National Race Course
- Hollywood Casino at The Meadows
- Harrah’s Philadelphia
- Wind Creek Bethlehem
The six casinos are joining the PGCB and the Department of Revenue against POM.
Stephen Cook, Chief Counsel for the PGCB, said in an emailed statement prior to the Supreme Court announcement:
“The board believes the Gaming Act was meant to establish the law of the Commonwealth relative to all slot machine gaming, authorizing it at certain locations and on approved machines, while disallowing it everywhere, and on everything else.”
Perhaps skill game manufacturers and the regulated gaming community can find a happy medium within PA. If regulated gaming and skill games could come to an agreement, the state would benefit greatly with additional tax revenue.
