If you set foot in a local tavern, social club, American Legion, or convenience store nowadays, you’re likely to notice players sitting at colorful video screens, and you might think “casino games” or “gambling.”
You’re probably wrong. What you’re likely looking at are video “skill games.” Proponents say they are definitely not gambling devices or games of chance, and Pennsylvania courts so far seem seem to agree.
On Friday evening, April 11, a standing-room-only crowd of people who depend one way or another on skill game revenue gathered at the Jonestown American Legion to hear club and bar owners, local dealers, and elected officials urge them to fight for sensible regulation and fair taxation of the popular devices.
The event was sponsored by Georgia-headquartered Pace-O-Matic, the nation’s largest distributor of skill games, and the main player in Pennsylvania. Lycoming County’s Miele Manufacturing builds Pace-O-Matic games in Pennsylvania under the label “Pennsylvania Skill.”
Pace-O-Matic is aggressively fighting what it sees as a campaign by casino owners to put them out of business by claiming skill games are gambling devices.
Proponents say skill games differ from casino slot machines in an important way: they do not depend on pure luck to win. Players have to be skilled to earn a payout and can, theoretically, win every time they play.
Unlike casino slots, which are considered gambling devices, skill games aren’t licensed, regulated, or taxed in Pennsylvania. This has made them a popular and dependable revenue source for clubs and taverns throughout the commonwealth.
Recently, bills have been introduced in both houses of the Pennsylvania General Assembly to regulate and tax skill games, and Governor Josh Shapiro has floated a proposal to tax their net revenue at 52 percent.
Most who benefit from skill games – from manufacturers down to end users – favor reasonable regulation and taxation, but the governor’s hefty tax proposal has caused many to worry that high tax rates will make skill games a flop in much the same way that a 65 percent tax rate has killed “small games of chance” in Pennsylvania.
Bill Shay, owner of local amusement company Shay Vending, told LebTown that the consensus among most supporters of regulated skill games was a 16 percent tax rate.
State Senator Eugene Yaw (R-Lycoming County), whose district includes Miele Manufacturing, is a sponsor of one such bill. He was a featured speaker at the rally, where the main theme was supporting small local businesses and their employees who rely on skill games revenue, and keeping it in Pennsylvania.
“We need regulation,” he told the audience. “Regulation is key. I’m sick and tired of [skill games] being called illegal.”
Yaw noted that a bill similar to his has been introduced in the Pennsylvania House by Lancaster County Republican Kerry Benninghoff.
Lebanon County’s General Assembly members were also on hand and unanimous in their support.
State Senator Chris Gebhard (R-48), who chairs the senate committee that oversees gaming, praised skill games’ “positive effect on small businesses, restaurants, taverns, and clubs,” and pointed out that COVID funding, which helped many stay in business, has ended. Apparently referring to the casino industry, he added that “people in other gaming industries want to see small skill games go away.”
State Rep. Russ Diamond (R-102), ranking minority member of the House Gaming Oversight Committee, said he supports legislation and the need to protect local small businesses. “This money stays right here,” he noted, while “casinos ship money out of Pennsylvania.”
State Rep. Tom Jones (R-98) cited the importance of “preserving this income stream,” while local state Rep. John Schlegel (R-101) told the audience that he is a co-sponsor of the Benninghoff bill.
None of the legislators said when either bill might come up for a vote.
Editor’s note: This article was updated to clarify that state Rep. Russ Diamond supports legislation in general, but is waiting for legislation to come in front of the House Gaming Oversight Committee before he supports a particular proposal.
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