This week, new laws aimed at legalizing and taxing contentious skill games were introduced in the capital of Pennsylvania, Harrisburg. The primary creator of the slot-like gaming machines in the commonwealth swiftly opposed the legislation, arguing that it aims to impose an excessive tax.
Five Senate Republicans introduced Senate Bill 756, a proposal to modify Title 4 (Amusements) to establish a regulatory structure for skill games. The bill is sponsored by Senators Dan Laughlin (R-Erie), Rosemary Brown (R-Monroe), Joe Pittman (R-Indiana), Kim Ward (R-Westmoreland), and Chris Gebhard (R-Lancaster). Pittman serves as the primary floor leader.
SB756 would permit establishments with a liquor license from the Pennsylvania Liquor Control Board to operate a maximum of four skill gaming machines. Establishments with alcohol licenses could provide two machines. The law would further permit VGT truck stops to raise their slot-like machine count from five to seven.
Skill games resemble slot machines, but advocates of these devices argue they are not governed by the Gaming Act since a player's skill can influence the payout rates.
Skill Gaming Industry Opposes Legislation
Pace-O-Matic (POM), the Georgia-based firm that created the software for the widely used Pennsylvania Skill cabinet, the most prevalent skill game in Pennsylvania, has consistently advocated for the regulation and taxation of its products. Miele Manufacturing, the Pennsylvania-based company that produces the terminals, also backs a legal framework.
These companies, however, argue that the proposed 35% tax rate on gross skill gaming revenue outlined in SB756 is excessive.
"This bill falls woefully short,” opined Mike Barley, POM’s spokesperson. Barley said the bill as drafted would take critical money from small businesses that have used the supplemental income to keep people employed and offset higher costs.
POM and Miele endorse a tax rate of approximately 15%. Gov. Josh Shapiro (D), an advocate for legalizing skill games via legislation, seeks a minimum of 50% of the tax revenue from skill games.
The heavily taxed casinos in the state, which contributed tens of millions to the state for slot licenses, are against skill games, arguing that the unregulated and untaxed terminals siphon customers from their operations. Casino slot machines are liable for a gross gaming revenue tax that varies from 48% to 54%.
Regulation Approaching
An anonymous senior legal figure in the Republican Party informs Casino.org that the upcoming legalization and taxation of skill games is a reliable choice.
Shapiro is still pursuing additional funds to support his education and infrastructure expenditures, and the state will not keep missing out on any revenue from the estimated 67K skill games functioning in the commonwealth. Laughlin concurs.
"These skill games are literally everywhere. They’re taking quite a bite out of the pockets of both our consumers and our casino businesses,” Laughlin said. “Skill games are undercutting our gaming industry. I’m committed to finding a fair, enforceable solution that levels the playing field.”
SB756 pairs with Senate Bill 626 in aiming to control and impose taxes on skill games. SB626, on the other hand, suggests a significantly reduced effective skill gaming tax set at 16%.