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The Pennsylvania Supreme Court ruled June 15 that so-called skill games are subject to the state’s Gaming Act and Crimes Code, effectively classifying the machines as illegal gambling devices under current law.
Pennsylvania skill games face uncertain future
The decision overturns multiple lower-court rulings that had allowed the industry to operate in a legal gray area for years. Justice David Wecht, writing for the majority, called the earlier rulings “deeply flawed” and said the Commonwealth Court “was incorrect on both points.”
“Under a plain reading of the law, ‘skill game’ devices are subject to both the Gaming Act and the Crimes Code,” Wecht wrote in the court’s 66-page opinion.
The ruling affects an estimated 70,000 skill game machines operating across Pennsylvania in gas stations, convenience stores, bars, restaurants, fraternal clubs and other small businesses. By comparison, Pennsylvania casinos operate roughly 24,000 regulated slot machines.
However, the court also issued a 120-day stay on enforcement, giving lawmakers time to determine whether the machines should be legalized, regulated and taxed through legislation. During that period, law enforcement agencies cannot take adverse action against operators or business owners relying on the previous court decisions.
Supreme Court delays enforcement until October
In news reported by PlayPennsylvania, the Supreme Court acknowledged that many businesses relied on earlier rulings that permitted the machines to continue operating.
“We are further mindful of the potential disturbance that our correction of the prevailing case law may cause to business owners and other good-faith participants in the industry,” the court wrote.
The temporary stay gives Pennsylvania lawmakers until roughly mid-October to craft legislation addressing the industry. The ruling immediately intensified negotiations in Harrisburg, where lawmakers were already debating proposals to regulate and tax skill games as part of ongoing budget discussions.
Skill games industry says small businesses will suffer
Pace-O-Matic, the Georgia-based company behind Pennsylvania Skill machines, criticized the ruling and warned of major consequences for small businesses and social organizations that rely on revenue generated by the games.
A company spokesperson said the decision “does not accurately reflect the facts presented,” noting that several lower courts — including a unanimous Commonwealth Court panel — previously upheld the legality of the machines.
The company said more than 10,000 Pennsylvania businesses, fraternal organizations and clubs could be affected by the ruling.
Pace-O-Matic also warned that excessive regulation or high tax rates could make the machines financially unworkable for many operators.
Despite the setback, the company said it plans to continue pushing for legislation that would legalize and regulate the industry. Pace-O-Matic is backing proposals introduced by Sen. Gene Yaw and Rep. Danilo Burgos.
Pennsylvania considers taxing and regulating industry
The ruling increases pressure on the General Assembly to determine whether skill games should remain banned or become part of Pennsylvania’s regulated gaming industry.
Justice Wecht emphasized that future policy decisions belong to lawmakers, not the courts.
“Determining and manifesting the public policy of Pennsylvania is the prerogative of the legislative branch of our government, not this judicial branch,” he wrote.
Gov. Josh Shapiro has repeatedly called for regulating and taxing skill games. His latest budget proposal includes a 52% tax rate on the machines, similar to the tax imposed on casino slot machines.
The Independent Fiscal Office estimates that a regulated skill games market could eventually generate more than $1 billion annually in state revenue.
With the state budget deadline approaching and the court’s 120-day clock already running, lawmakers are expected to move quickly to determine the future of skill games in Pennsylvania.
