The Pennsylvania Supreme Court has agreed to hear a case that could determine the future of tens of thousands of so-called “skill games,” slot-like games that have proliferated in convenience stores, bars, gas stations, pizza parlors and other commercial locations throughout the state.
The Commonwealth of Pennsylvania appealed a lower court’s ruling that the games are not subject to regulation because results are determined, at least in part, by skill, rather than pure chance. The case stems from a lawsuit filed by Georgia-based skill-game manufacturer Pace-O-Matic after its machines were seized by state law enforcement as illegal gaming machines.
The state, supported by the regulated gaming industry and national gaming lobbying groups including the American Gaming Association and the Association of Gaming Equipment Manufacturers, has long held that the machines, which operate without regulation and without paying taxes, are illegal competition to the state’s regulated slot machines, on which casinos pay a revenue tax exceeding 50 percent.
Low estimates place the number of skill games in Pennsylvania at more than 20,000, and some have gauged the numbers much higher, with some estimating they will soon reach 100,000 units.
Late last year, the Commonwealth Court held that the games, which accept wagers and pay out in cash, are not subject to gaming laws because of an alleged skill element.
The Pennsylvania Attorney General’s office’s appeal notes that the so-called “skill” element is optional to the player, and thus, the machines are no different than regulated slot machines. The appeal specifically asks the state’s high court to consider:
- “Does an electronic slot machine cease to be an illegal ‘gambling device,’ governed predominantly by chance, if the machine’s manufacturers embed into its programming a so-called ‘skill’ element that is almost entirely hidden from view and is almost impossible to complete?
- Should gambling statutes governing ‘slot machines’ be readin pair materia to supply an appropriate definition of the term?”
The term “in pari materia” essentially means laws on similar subjects work together, so the legal definition of slot machine in the state’s gambling laws would prevail in other forms of law, such as skill games, to define what a slot machine is or is not.
The state has argued that its 2017 gaming expansion law includes a definition of “skill-based slot machines” that identifies them as gaming machines subject to state regulation.
Bills that would officially legalize and tax the skill games have been unsuccessful in the state legislature. The Supreme Court’s decision in this case could determine the future of that legislation.
