Key facts
- Pennsylvania's Supreme Court ruled that skill games are slot machines.
- The ruling mandates that skill games must comply with state gambling laws.
- A 120-day moratorium is in place before law enforcement can act.
- The legislature has four months to decide on regulation or face seizure of machines.
- An estimated 70,000 skill game machines are currently operating in Pennsylvania.
Pennsylvania's Supreme Court has ruled that skill games are slot machines and must comply with the state's gambling laws. The decision, which applies to an estimated 70,000 machines operating across the commonwealth, creates a 120-day window for the state legislature to decide whether to regulate these devices. If no legislative action is taken within this period, law enforcement will be permitted to seize the machines.
The ruling addressed two cases, consolidating them to clarify the legal status of skill games. The court found that the devices meet the definition of slot machines under state statute and ordinary English, regardless of any perceived element of skill. It also determined that the state's Gaming Act applies to these machines, not just those in licensed casinos.
Lawmakers have grappled with regulating skill games for years, with disagreements over tax rates being a major hurdle. Governor Josh Shapiro's budget proposed a 52% tax rate, aligning with casino slot machines, while Senate Republicans have favored a 35% rate, and some other Republicans suggest 16%. The skill games industry, represented by companies like Pace-O-Matic, argues that higher tax rates would be crippling. Casinos, conversely, tend to support higher taxes on skill games.
Senate Republican leaders have stated that addressing skill games is now a critical part of resolving the state's budget, citing public safety concerns. House Democrats and the Governor's office are reviewing the decision. The Independent Fiscal Office estimates that regulating and taxing skill games could generate over $1 billion annually in revenue.