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The Pennsylvania Supreme Court will decide whether skill games are unlicensed gambling machines and should, therefore, be shut down.
State courts and lawmakers have argued about the legality of the machines for years. In December, the Commonwealth Court unanimously ruled the games legal, which eased tensions and clarified the matter. But the question of skill games’ legality is back on the table.
Key takeaways
- Skill games are cash-paying electronic game terminals that resemble slot machines. They commonly live in convenience stores, bars, and other smaller businesses.
- The PA casino industry has preserved that skill games are unlicensed, illegal gambling machines and subject to seizure by police. Machine makers and retailers opposed it, claiming the machines were legal.
- The Skill Games bill aimed to establish a regulatory framework and tax structure, but Virginia Gov. Glenn Youngkin vetoed it, pushing the issue to next year.
- Pennsylvania’s highest court’s decision on the case would make a significant development and set rules for years to come.
Significant skill games ruling could set rules for the future
As the Pennsylvania Supreme Court granted a Petition for Allowance of Appeal from the Commonwealth of Pennsylvania, the court will determine the legality of the machines.
According to a CBC news article, Pennsylvania’s highest court said it would consider an appeal by the Attorney General’s (AG) office of a lower court decision that found that skill games are based on a player’s ability—and not solely on chance, like slot machines.
The Pennsylvania Lottery and the PA casino industry oppose skill games, stating they are losing revenue. Casinos pay a nearly 54% tax on slot machine revenue and argue that it is unfair when the skilled games pay nothing.
According to a CBC news article, “thousands of substantially similar devices are cropping up in corner stores and bars throughout the state,” AG Michelle Henry‘s office told the court in a brief.
The agency’s lawyers emphasized that courts, government, and private parties expect “clear guidance on the application of the relevant Pennsylvania statutes” that only the state’s Supreme Court can provide.
While a Supreme Court hearing and addressing the issue would be a victory for the regulated gambling industry, banning skill games would threaten the state’s tax revenue. In other words, the complete ban would take away a large amount of money from the state.
While the exact number of skill game terminals remains unknown, the American Gaming Association (AGA) projected that in 2022, there were at least 67,000 in Pennsylvania, which is more than in any other state.
Gov. Youngkin vetoed legislation that would have regulated skill games
Skill games existed in a legal grey area in Pennsylvania until 2020 when the state’s skill game ban passed. That ban wasn’t in effect until July 2021 after Virginia’s government gave entities offering games one extra year due to pandemic closures.
The ban got postponed for almost two years as the skill game industry fought it in court. The Virginia Supreme Court re-established the ban in late 2023.
SB 212, sponsored by Sen. Aaron Rouse, was a bill to legalize VA skill games that passed the Senate (in a 31-9 vote) and the House of Delegates (49-43) earlier this year and awaited Youngkin’s signature.
Gov. Youngkin then sent the bill back to the General Assembly with amendments, but the Senate rejected them in a 34-6 vote. That action marked the final word on SB 212 for 2024, leaving the status quo as of the 2023 Virginia Supreme Court ruling in place.
Similar legal debates are occurring in Texas and Kentucky.
