Unregulated Gaming Machines Under Fire In Pennsylvania As Opponents Unite

Posted on February 18, 2020

Two prominent gaming organizations have partnered to “combat the unchecked spread of unregulated gaming machines throughout the United States.”

The American Gaming Association (AGA) and the Association of Gaming Equipment Manufacturers (AGEM) announced the partnership Tuesday.

More than 20 professional gaming organizations have joined the partnership in opposition to the spread of unregulated gaming.

PA law enforcement and legislators target audience

While nationwide, the partnership plans specifically to distribute resource materials to Keystone State lawmakers, regulators, and law enforcement.

The partnership spotlights PA issues on page 5 of their factsheet. It includes a link to a PlayPennsylvania story in late January about a failed attempt to shield Pace-O-Matic devices from seizure by PA State Police through a court order. A judge denied the request.

Targeted for key decision-makers in PA, the factsheet lays out how to identify illegal and gray market gambling devices and their downsides.

The partnership points to a lack of testing, consumer protections, and responsible gaming measures associated with these machines.

Unregulated machines are common in PA

In PA, there are 24,000 slot machines in casinos. The state regulates and taxes them.

But an untold number – likely more than 15,000, and perhaps as many as 20,000 – of unregulated devices are scattered around the state. They are in gas stations, bars, convenience stores, fraternal organizations, pizza shops, and even strip mall arcades.

Pace-O-Matic, which says it makes skill games, not slots, accounts for about 10,000 of the wagering devices in PA. Skill games are a gray area, with one court decision declaring them legal in 2014, and another illegal in 2019.

Only a further court ruling or more likely legislation will ultimately answer the legality question once and for all. There are several competing pieces of legislation surrounding the devices kicking around Harrisburg.

Push for legislative action of unregulated devices

Bill Miller, president and CEO of the American Gaming Association, commented on the initiative:

“Stamping out the illegal market that threatens the safety of consumers will always be one of the gaming industry’s highest priorities. The AGA is encouraged that policymakers in some states such as Virginia have begun to recognize the dangers of these machines and have taken recent legislative action toward outlawing them.

“Unfortunately, other jurisdictions where these machines have become pervasive may believe their only recourse is to regulate and tax them. Rewarding bad behavior is not the answer, and we hope our education efforts will make it clear that the only real solution is to stop the spread of these devices.”

A threat to the regulated gaming industry

Marcus Prater, executive director of the Association of Gaming Equipment Manufacturers, expanded on the aim of the new partnership:

“The regulated gaming industry has rarely been more united on a singular issue and now we have a tool to address the misinformation and deception that unregulated machine companies use to confound law enforcement, the courts, and local citizens.

With a robust regulated gambling market in the state, Prater emphasizes the multiple threats posed by unregulated devices.

“The spread of these machines represents a serious threat to the overall regulated market that has invested billions in infrastructure while also creating thousands of jobs and substantial tax benefits in the communities they serve. Moreover, unregulated machines prey on confused players who see slot machine symbols and think they’re getting a fair chance when they absolutely are not.”

Doug Harbach, a spokesman for the Pennsylvania Gaming Control Board (PGCB), declined comment on the initiative as it is out of their jurisdiction. “Unregulated or illegal machines are a criminal matter, not a regulatory matter for which we are responsible.”

PA Lottery estimated to have lost $200 million to the machines

Pete Shelly, the spokesman for Pennsylvanians Against Illegal Gambling, welcomed the announcement.

“We know that here in Pennsylvania there are more than 15,000 of these machines. The PA State Police has testified on the impact that these machines are having in communities across the state, including loansharking among other problems.

According to Shelly, the devices in question have put a large dent in state lottery revenues. That in turn reduces funds for important state programs.

“The PA Lottery has lost an estimated $200 million to these machines – and that is revenue for Meals on Wheels, senior centers and other programs for seniors. We are going to keep fighting to have the state shut these machines down and for lawmakers to enact legislation to ban these machines from Pennsylvania.”

The illegal gambling group Shelly speaks for recently used a picture of a sub-teen child sitting at a Pennsylvania skill game device in an unidentified restaurant in a print advertisement about “shady gambling dens popping up everywhere.”

“Ridiculous,” wrote Shelly. He pointed out the legal age to gamble on a slot machine at a casino is 21-years-old and that POM machines advise players they must be at least 18-years-old to play.

Pace-O-Matic contends they make skill games

Mike Barley, a spokesman for Pace-O-Matic, said his company: “…Continues to work with the state legislature to pass strict regulation, an additional taxing structure and strong penalties for the skill game industry. We have been at the forefront of raising concerns about illegal gambling devices masquerading as skill games in our Commonwealth.”

Barley also maintains the legal status of POM skill games in the face of conflicting opinions regarding their legality.

“Pace-O-Matic’s Pennsylvania Skill games have been adjudicated by a court of law as legal games of predominant skill. In November, we won a Commonwealth Court case that we brought against the Commonwealth that determined our games are not regulated by the gaming code, but instead by the criminal code. The Commonwealth Court also made it clear in a subsequent ruling that our games are presumed legal.”

About five other companies also make machines found in PA, according to the PA State Police. POM has sued one such company in civil court, contending its games are not skill devices.

A PA State Police spokesman did not immediately respond to a request for comment.

Lead image courtesy of PA State Police.
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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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