Pennsylvania Skill Games Legality to Be Determined by State Supreme Court

Posted on: June 21, 2024, 08:17h. 

Last updated on: June 21, 2024, 08:56h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

The legality of so-called skill games in Pennsylvania will be determined by the state’s Supreme Court.

Pennsylvania skill games Supreme Court slot machines
A skill game branded Pennsylvania Skill is seen at a convenience store in Northern Cambria. The Pennsylvania Supreme Court will determine whether skill games are slot machines. (Image: The Tribune-Democrat)

The Pennsylvania Supreme Court announced this week it will accept the petition from state Attorney General Michelle Henry (D) for the high court to review a lower court’s opinion that skill games aren’t slot machines. Last December, a Commonwealth Court upheld the Dauphin County Court of Common Pleas’ ruling that since a skill game’s outcome isn’t solely dependent on chance — as is a slot machine — the devices don’t fall under the scope of the state’s Gaming Act.

Henry and other state officials, including several district attorneys, argue the games are nothing more than cleverly designed slot machines. The skill elements are minimal, they say, often consisting of a player simply needing to identify a winning payline by tapping on the matching symbols. Skill game advocates say a player’s aptitude can significantly sway the machine’s payout rate. Players can also recoup losses by completing memory challenges.

The case the Pennsylvania Supreme Court will take up originated in Dauphin County in 2019 when state police raided the Champions Sports Bar and seized several skill games and a bag of cash containing $525. Champions sued, and state courts have since sided with the plaintiff.

The court decisions have stalled state law enforcement from further confiscating the games that Henry’s office alleges constitute illegal gambling apparatuses.

What is a Slot Machine?

The Supreme Court said it will determine whether skill games are illegal, unregulated gambling devices. The court says it will also consider how a slot machine is defined in the commonwealth.

The Pennsylvania Race Horse Development and Gaming Act, passed in 2004, authorized slot machines. The law has since been amended several times to expand the state gaming industry.

The Gaming Act defines a slot machine as “any mechanical, electrical, or computerized contrivance, terminal, machine, or other device” that operates upon the “insertion of a coin, bill, ticket, or token.” More importantly, the Gaming Act defines a slot machine as any machine that incorporates “skill or application of the element of chance, or both.”

The statute also provides definitions for “skill slot machines” where the skill of the player, rather than the element of chance, is the predominant factor in affecting the outcome of the game. A “hybrid slot machine” is defined where chance and skill are mutually responsible for the player’s outcome.

Skill Gaming Industry?

Pennsylvania is home to more unregulated skill games than any other US state. The American Gaming Association estimates there are at least 67K machines in restaurants and bars, convenience stores, gas stations, grocery markets, and shopping centers.

Revenue from the devices is split between the host business, machine developer, and route distributor. The money, proponents say, has helped offset inflationary costs and helped retain small business jobs.

The skill game lobby is seeking to be taxed and regulated to secure the games’ spot in the Pennsylvania gaming industry. But they’re asking for a tax rate considerably less than the effective 54% tax that casinos pay on their slot machine win.