The battle over skill games in Pennsylvania has been going on for years now, and you will find them all over the state. A recent Supreme Court ruling eliminated the legal gray area in which they exist, and as gambling machines, they will now have to be regulated.
The debate is ongoing over various issues, such as what tax would be fair and whether they should still operate in their present locations like grocery stores and veterans’ clubs, where they help them remain financially viable.
The Supreme Court Ruling
June 2026 saw a significant ruling in the Pennsylvania Supreme Court, where it ruled 5 to 2 that roughly 70,000 electronic skills games in the state are essentially slot machines. The Court gave the General Assembly a window of 120 days to come up with regulatory legislation before the machines became illegal. It knew that coming up with such legislation would be challenging.
All Pennsylvania online gambling is regulated by the Pennsylvania Gambling Control Board (PGCB), but these machines were unregulated as they existed in a legal gray area, with game developers claiming that they incorporated an element of skill.
Major operators, such as Parx Casino, have been lobbying lawmakers and arguing that the unregulated machines cost them market share. The CEO of Parx Casino came out in support of the Supreme Court decision, saying that these machines contribute to crime, money laundering, and underage gambling.
The regulated casinos in Pennsylvania must abide by strict rules and regulations that help to protect player interests. Skill games have not had the safeguards that regulated casinos offer, and problem gamblers and vulnerable populations are more at risk because of their accessibility.
Bensalem’s Parx Casino and Georgia-based Pace-O-Matic, a developer of software for the video game machines, are at the center of the battle with their opposing interests.
The deadline is looming
Total gross revenue from slots in traditional casinos is heavily taxed at 54%. Traditional table game revenue is taxed at 16%. Fully automated electronic gaming tables are taxed at 34% and retail sports betting at 34%. Casinos feel that they shouldn’t have to pay such high taxes when skill games aren’t taxed at all. They would like them to have to pay a similar amount.
Skill game manufacturers such as Pace-O-Matic and other small business advocates are arguing for lower tax rates or flat monthly fees on machines, so they remain profitable.
The deadline to address the issue is October 15. If a framework isn’t created by that date, skill machines will become illegal throughout the Commonwealth. The governor says that state law enforcement is prepared to prevent illegal operations.
Opponents rally at the Capitol steps
Small business owners and representatives of veteran organizations argue that the games are a financial lifeline that helps them to stay in business. They recently held a rally on the steps of the Capitol in Harrisburg to support their cause.
A high tax on games would take money away from charitable organizations and small business owners already battling to make payroll. They want lawmakers to take a reasonable approach, or the locations could be forced to close. Some opponents are in support of the legislation that seeks to establish a regulatory framework and impose a monthly fee of $500 per machine.
Millions in campaign spending
The legal and political fight over the games between those with a conflict of interest has been going on for years. Both sides have been spending millions on lobbying campaigns and political action committees. In Pennsylvania, it has become a morning ritual to check the news to see what’s happening as lawmakers try to bridge the gap and find common ground regarding taxes.
Many differing opinions at the state level
Some funding efforts have apparently been made to unseat Republican lawmakers in primary elections over the skills games debate. Lawmakers on both sides of the aisle insist the decision is more nuanced than many think and is about much more than politics in Pennsylvania and blue versus red. There are many differing opinions at the state level on how to handle the regulation and taxation. Lawmakers go back into session in September with the deadline looming.
