Five for Friday: Skill Game Summer

Pennsylvania’s highest court has signaled it will take up a case that could determine whether electronic gaming machines commonly known as skill games are legal under Pennsylvania law. 

Proponents of the machines – which are currently not regulated by the state and look similar to digital slot machines or video gaming terminals – argue that the machines not only would create a new revenue stream for the state, but already provide supplemental revenue to small businesses across the state. Critics, meanwhile, fear the machines, which have popped up in bars, convenience stores and fraternal organizations, present public safety concerns and would divert revenue away from certain state programs.

City & State has your Five for Friday, breaking down what we know about the skill games debate in Pennsylvania and what could come next.

PA Supreme Court will take up a case on skill games

In a per curiam order this week, the Pennsylvania Supreme Court granted the state attorney general office’s appeal of a 2023 Commonwealth Court decision that determined that the games are not illegal gambling machines.

The appeal asks the court two questions, including whether an electronic slot machine ceases to be an illegal “gambling device” when an element of skill is programmed into the machine. The high court’s eventual ruling could provide the most concrete guidance to date on skill games and their legality, but that’s not the only venue where this issue is being debated. 

Shapiro seeks to regulate skill games

In his 2024-25 executive budget proposal, Gov. Josh Shapiro proposed a 42% tax on daily gross gaming revenue from skill games, which would be regulated by the Pennsylvania Gaming Control Board.

Under Shapiro’s proposal, the Gaming Control Board would collect the revenue and place it into a restricted account. The executive budget proposal suggests that the 42% tax would generate more than $150 million in the first year alone. 

Top Senate Republican supports regulating skill games

On multiple occasions, Pennsylvania Senate Majority Leader Joe Pittman has expressed an openness to taxing and regulating games of skill. 

Speaking in April, Pittman said that Senate Republicans and Shapiro seem to share an area of common interest in regulating the gaming machines. “In his budget address, he indicated that it is time to regulate and tax games of skill. I actually think that that’s a source of revenue that we can explore. I think there is a universal point of view that it is time to bring that issue under regulation and under taxation,” Pittman said, suggesting that skill game revenue could be used to develop a strategy for higher education in the state. 

In comments to reporters this week, Pittman once again addressed the topic of skill games: “I am very concerned that not regulating games of skill is becoming a public safety crisis. ... We are sitting on a public safety powder keg if we don’t address them," Pittman told reporters this week, according to a post on X from PennLive reporter Jan Murphy.

Philadelphia has moved to crack down on skill games

While state legislators in Harrisburg are exploring taxing and regulating skills games, local lawmakers in Philadelphia have already approved legislation banning businesses from housing skill games unless they have a casino and liquor license – and an area for at least 30 patrons to eat or drink. 

The move prompted disappointment from both Pace-O-Matic, the manufacturer of the Pennsylvania Skill-branded gaming machines, and local shop owners in the city. At the time of the bill’s passage, Philadelphia City Councilmember Curtis Jones said he hoped the vote would spur action in Harrisburg. “We’ve been waiting for help from Harrisburg, and I believe by passing this bill, it will incentivize our colleagues at the state level to finally take this on and do something on behalf of Philadelphia,” Jones said. 

States struggle with skill game decisions

Different states have taken different approaches to skill games within their respective borders. For example, Kentucky officials banned skill machines in 2023, prompting manufacturers to disconnect their skill game software once the ban went into effect, according to reporting from Louisville Public Media. However, one manufacturer said it has created new games not covered by Kentucky’s existing ban. 

In Virginia, meanwhile, lawmakers returned to Richmond this month for a special session focused on fixing a veterans’ benefit program, as well as skill games, according to WVTF, a Virginia radio station. However, Virginia lawmakers ultimately took no action on two skill games bills, according to the outlet. 

As for Pennsylvania, regardless of how the state's high court ultimately rules, any eventual decision – and its ripple effects – will likely provide at least some direction for other states grappling with the gaming machines.