PA lawmaker renews effort to legalise skill games – Uncategorized

Pennsylvania State Senator Revives Efforts to Legalize and Regulate Unlicensed Skill Games

In a significant move for the Pennsylvania gambling landscape, State Senator Gene Yaw is mobilizing renewed efforts to legalize and regulate an estimated tens of thousands of unlicensed ‘skill games’ proliferating across the state. These semi-automated gaming devices, predominantly branded as ‘Pennsylvania Skill,’ have found their way into various establishments including bars, truck stops, and private clubs, raising critical questions about legality and revenue implications.

Last week, Senator Yaw began circulating a co-sponsorship memo indicating his intention to introduce legislation aimed at defining the regulatory framework for these skill-based games. Manufactured by the Georgia-based Pace-O-Matic (POM), proponents argue that the games’ reliance on player skill differentiates them from traditional slot machines, enabling them to assert legal operation under Pennsylvania’s gaming laws.

One noteworthy feature of the skill games allows players to place a “wild” symbol dynamically on the reel grid, enhancing their potential for winning combinations and thereby increasing engagement.

Opposition from the Casino Industry

However, the proposed legislation faces significant opposition from established gaming interests, including Pennsylvania’s casino operators, the American Gaming Association (AGA), and the Association of Gaming Equipment Manufacturers (AGEM). These stakeholders assert that skill games function as unregulated slot machines, lacking essential fairness guarantees, responsible gaming protocols, and anti-money laundering measures.

Critically, they highlight the tax implications; skill games currently operate without contributing to state revenue, undermining the competitive landscape for licensed casino slots, which are subject to a staggering 54% state tax. The absence of taxation not only poses financial challenges for casinos but also raises ethical concerns regarding fairness within the gaming sector.

Pennsylvania courts have previously ruled in several cases involving POM, culminating in the seizure of skill games by state authorities. However, POM argues that these judicial decisions validate the legality of their gaming machines, citing favorable outcomes in the court system.

Skill Games: A Case of Unfair Competition?

Pace-O-Matic maintains that the record-breaking revenues reported by casinos indicate that skill games have not adversely impacted traditional gaming operations. In contrast, casino operators emphasize the rigorous licensing requirements and extensive background checks imposed on them compared to the relatively unregulated status of manufacturers like POM.

Senator Yaw, who has received substantial campaign contributions from skill game manufacturers, has previously introduced bills aimed at legalizing these games in prior legislative sessions, though none have progressed to a vote. He garners support from various stakeholders, including bar owners, private club operators, small business owners, and charities that benefit financially from the revenue generated by these games.

“Skill games represent a vital component of our state’s economy,” Yaw stated in a recent interview with The Center Square. “They play a crucial role and should not be overlooked.”

Mike Barley, Chief Public Affairs Officer at POM, argued that legalization and regulation could create approximately 15,000 jobs in small businesses and volunteer organizations statewide. “We urge lawmakers to endorse this measure, as it has been instrumental in helping many local businesses endure the challenges posed by inflation and labor shortages,” he added.

Legislative Proposals and Future Directions

Senator Yaw’s proposed legislation aims to establish a minimum age requirement for players and mandates that skill game machines connect to a centralized collection and control system to ensure accurate tax collection. The proposed tax rate is positioned at 16%, a point of contention for many casino operators who are already navigating the burdensome 54% tax imposed on their slot revenues.

Last July, in a noteworthy turn of events, casino operators initiated legal action against the state, pushing for taxation of skill games, arguing that the untaxed status of these machines renders their own slot revenue tax unconstitutional.

A panel of experts at the National Council of Legislators from Gaming States in July confirmed that the operation of these skill games is illegal. However, they acknowledged the practical challenges of enforcing a ban, given estimates suggesting that as many as 100,000 skill games are currently active in Pennsylvania.

As the landscape of Pennsylvania’s gambling industry continues to evolve, the debate regarding the legal status and regulation of skill games remains a pivotal issue, impacting various stakeholders across the spectrum from small businesses to major casino operators.