Posted on: June 30, 2024, 09:58h.
Last updated on: June 30, 2024, 09:58h.
The company behind Pennsylvania Skill games, the slot-like machines that occupy much floor space in restaurants and bars, convenience stores, gas stations, retail shopping centers, and grocery markets, says its gaming devices do not directly compete with casino slot machines.
The state commercial gaming industry, consisting of 17 brick-and-mortar casinos, iGaming, retail and online sports betting, fantasy sports, and video gaming terminals, reported its best May ever with gross gaming revenue (GGR) of nearly $521 million. Pace-O-Matic (POM), the Georgia-based software company that developed the operating system of the Pennsylvania Skill games, issued a press release congratulating the casinos on their May to remember while defending its games.
These numbers show that there is room in the state for both casinos and small businesses that operate skill games to be successful. There is no competition between the two,” declared Mike Barley, a POM spokesperson.
The legality of skill games in Pennsylvania will soon be reviewed by the state’s Supreme Court. State Attorney General Michelle Henry is appealing the lower courts’ rulings that since the games have elements of skill, they cannot be classified as illegal gambling machines under the state’s Gaming Act.
Casino Industry Disagrees
Barley’s assertion that skill games aren’t competing for the same player certainly isn’t an opinion shared by the casinos.
Representatives with Parx, the richest casino in the state, said last week that they wouldn’t move forward with building a $100 million hotel until the skill game legal saga has played out. Parx in the meantime is acquiring an adjacent smaller hotel to offer patrons on-site lodging.
Barley says the casinos are simply being greedy.
Sadly, $521 million a month is not enough to satisfy the greedy casino industry,” Barley stated. “Instead, they want to kill small businesses, American Legions, volunteer fire companies, Moose Lodges, and other places that count on income from skill games.”
Skill games are unregulated and untaxed, though POM and other skill gaming proponents have asked state lawmakers to pass legislation to create a regulatory environment for the machines. The revenue is currently split between the host business, gaming developer, manufacturer, and route distributor.
Legislation that has stalled in the Harrisburg capital amid the skill gaming legal dispute proposed levying a 16% tax on skill games’ gross revenue. Gov. Josh Shapiro (D) has suggested a much higher rate of 42%.
Barley says a low tax is critical in allowing the machines to continue providing valuable financial resources to small businesses that have helped offset inflation.
“These locations could never afford to pay the same tax rate that wealthy casinos pay. Casinos know that but they simply don’t care,” Barley said.
Skill Game Legality
In late November, Pennsylvania’s Commonwealth Court unanimously upheld a lower court’s ruling that concluded skill games are not gambling games. The court said chance must be the predominating factor in a game’s outcome rather than skill for a game to be a gambling activity.
Simply because a machine involves a large element of chance … is insufficient to find the machine to be a gambling device,” Dauphin County Judge Andrew Dowling wrote.
Henry disagrees and is asking the state Supreme Court to reconsider and classify skill games as illegal gambling machines.
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