The Pennsylvania Gaming Control Board has granted Penn National Gaming permission to reduce the number of slot machines at two of the operator’s Pennsylvania casinos, Hollywood Casino at Penn National Race Course outside Harrisburg and Hollywood Casino at the Meadows near Pittsburgh.
In presenting its request to the board, Penn officials said one of the main reasons for the reductions is a loss of revenue to unregulated, untaxed so-called “skill games” that have proliferated at small businesses across the state.
Adrian King, an attorney representing Penn National, told the board at its hearing that while a number of factors led to the decision to reduce slots, the unlicensed skill games were prominent on the list.
“Penn National contends that skill machines have undoubtedly contributed to slot count reduction being necessary,” King told the board. “Skill games are a type of slot machine. This isn’t just a Penn National problem.
King said skill games contributed to a $200 million drop in revenue between 2013 and 2019.
“This should come as no surprise,” he told the board. “If you can play at a bar, tavern or convenience store and avoid a trip to the casino, they will. It comes as a real price to casino operators who have made vast investments in their properties, and to the commonwealth, which can’t collect its 52 percent tax rate on illegal casino slot machine revenue.”
King said the unregulated games undermine public confidence in the integrity of gaming, since they are placed with no regulatory oversight and are available to underage players—not to mention crimes, such as a recent incident in a Philadelphia neighborhood in which a man was shot and killed while playing one of the devices.
“It’s why the Pennsylvania General Assembly has rejected the distributed gaming concept for the commonwealth,” said King. “The best and safest place for slot machine devices to operate is in a highly regulated casino environment that has layers of monitoring and security.”
PGCB Commissioner Sean Logan commented during the meeting that while he was driving in McDonald, Pennsylvania, he saw a sign advertising a “casino” that turned out to be an unlicensed slot parlor. “I’m on the gaming board, and I wasn’t aware we had a casino in McDonald, PA,” he said.
Not all stakeholders are against the games. After the meeting, state Senator Gene Yaw and Rep. Jeff Wheeland held a press conference at which they promoted legalization of the skill games.
“If you want to know why legal skill games are important, all you have to do is walk into any market in Western Pennsylvania, family owned restaurant, VFW, or bar,” said Yaw. “They are allowing these businesses to provide health insurance for their workers, increased salaries, and in some cases, keeping the doors open.”
