The clock is ticking for Pennsylvania lawmakers to regulate skill games with a crucial deadline looming in October. The state’s Supreme Court ruled in June that these games are equivalent to slot machines putting approximately 70,000 machines in businesses across the state in legal limbo.
With the deadline of October 13 approaching, businesses are bracing for potential seizures of their skill game terminals. The Supreme Court’s ruling has sparked a flurry of legislative activity, as lawmakers scramble to find a solution before time runs out.
Supreme Court ruling and its implications
The Supreme Court’s decision in June declared that skill games are de facto slot machines, making them illegal without proper state regulation. These machines, found in corner stores, taverns, restaurants, gas stations, and even nonprofits like VFW outposts, generate significant revenue for their host businesses.
Unlike licensed casino slot machines, skill games are not currently taxed or regulated. The Supreme Court gave lawmakers a 120-day window to address this issue. If no legislation is passed by October 13 state police have warned that the machines and their revenue could be subject to seizure.
Legislative proposals and stakeholder positions
Several bills have been proposed to regulate and tax skill games. Governor Josh Shapiro has advocated for a 52% tax rate slightly below the casino slot machine rate, with revenue directed to the state’s general fund.
A bipartisan proposal, sponsored by state Rep. Danilo Burgos and state Sens. Anthony Williams and Gene Yaw suggests a $500-per-month flat fee per machine. This fee is projected to generate $300 million in the first year, with most funds going to the state and a portion reserved for municipalities.
State Rep. Russ Diamond has proposed a different approach, calling for a 20% tax on skill games and a limit of five machines per establishment. His plan aims to allocate revenue toward property tax relief, the state’s Race Horse Development Trust Fund, and gambling addiction treatment.
Business owners and community impact
Small business owners have expressed concern about the potential loss of skill game revenue. The state’s Independent Fiscal Office estimates each machine generates an average of about $47,000 a year. Many businesses and nonprofits rely on this income to cover essential expenses, including employee health insurance.
In Philadelphia, Mayor Cherelle Parker has criticized skill games, describing them as predatory and calling for tighter regulations. She has suggested that these games should be restricted to private clubs and casinos, rather than being accessible in vulnerable communities.
State police guidance and next steps
The Pennsylvania State Police have issued guidance urging businesses to remove skill game terminals. They emphasize that simply powering off or unplugging machines is not sufficient to comply with the law. Businesses are advised to coordinate with distributors and vendors for removal.
If distributors or vendors are unwilling to remove the machines, businesses are encouraged to contact state police for assistance. The outcome of this legislative race against time will significantly impact businesses across Pennsylvania and shape the future of skill games in the state.
