‘Skill Games’ Still Live, In Defiance of Shutdown

In several states, unregulated “skill games” are still up and running, despite the nationwide coronavirus shutdown.

‘Skill Games’ Still Live, In Defiance of Shutdown

On Monday, March 16, the Pennsylvania Gaming Control Board ordered all casinos in the state to shut down, part of the larger nationwide effort to slow the spread of the deadly coronavirus. The following day, gaming boards in Missouri and Kansas followed suit, and eventually, the entire legal gaming industry was at a standstill.

Many in the industry initially thought social distancing—shutting down two or three slot machines between each active game—would allow casinos to remain open. Then the Centers for Disease Control revealed that the Covid-19 virus can survive up to two or three days on stainless steel, plastic and other nonporous surfaces—like gaming machines. An industry shutdown was unavoidable.

But as recently as last weekend, convenience stores, pizza parlors, gas stations and other retail locations in Pennsylvania, Missouri and elsewhere still had live gaming machines operating. These are the so-called “skill games” that had been cropping up in several states prior to the crisis, the subject of an effort launched in February to battle them by the Association of Gaming Equipment Manufacturers (AGEM) and the American Gaming Association (AGA).


What ‘Skill’?

The games are unregulated machines that purport to offer better results if players uses skill. However, the dubious “skill” involved is typically nothing more than receiving a winning spin on a machine that looks a lot like a slot machine, and deciding whether to wager on the next spin. In many cases, the player can opt not to even use the “skill” feature, which means the games play just like a slot.

If the skill games were a concern before the current national emergency, they are much more so now. Because they’re not subject to regulations or laws—all their manufacturers, of course, claim they’re perfectly legal—no one has ordered them to be shut down during the crisis, and many of them remain live today, in rows of machines crammed into the corners of small retail businesses.

“I was in a convenience store yesterday (March 26), and there was someone sitting there playing a skills game,” said Peter Shelly, spokesman for Pennsylvanians Against Illegal Gambling (PAIG), based in Harrisburg. “Within a five-minute walk of where I’m sitting, there were at least three machines operating as of yesterday. Casinos are shut down, and these machines are still being operated. And it’s against the law.”

Shelly spoke with GGB News a few days after his advocacy group published a press release to shine a light on the fact that the games are still live. The unregulated machines, which have proliferated in gas stations, corner stores, restaurants, clubs and bars throughout Pennsylvania, pose risk as conduits of the coronavirus.

“It’s tough to practice social distancing when you’re standing shoulder-to-shoulder with a couple of other people playing illegal slot machines packed in the corner of a convenience store,” Shelly said.

“At a time in which Pennsylvania casinos have made the difficult but appropriate decision to shut down to protect the health of their patrons, employees and the public, these machines continue to attract gamblers of all ages,” Shelly said in the PAIG press release.

“You don’t have to be a health expert to know that the extended period of times in which players interact with these machines could accelerate the spread of coronavirus to some of our most vulnerable citizens.”

“If you go to any restaurant or pizza parlor, or anywhere I’ve gone personally since Covid-19 hit Pennsylvania hard, all the chairs are turned over,” Shelly told GGB News. “Nobody’s sitting down anywhere; you’re not to congregate. But these skills games still have machines open. There’s one in a small town right across the river here from Harrisburg, and they have three machines, and people are sitting there playing what is an illegal slot machine.

“There’s no supervision, no regulation. If they were a licensed, legitimate, regulated, supervised casino, they’d be shut down. At some point, there’s going to have to be more enforcement. They’re going have to get these machines taken out, period. These folks aren’t going to regulate themselves.

“Basically, they’re thumbing their nose at the state, and they have been for the year and a half these machines have been out.”

PAIG, formed last October, is funded by the Parx Casino in Bensalem, one of the regulated casinos that have been battling the spread of the skill games.

“We are working with Pennsylvania’s licensed, regulated and supervised casinos, as opposed to the skill games operators, which are none of the above,” Shelly said. “Our goal is to shut down these illegal slot machines. So, we’ve launched the website, had some paid media, and we’re getting a lot of traction on social media, with reporters paying attention to the issue all of a sudden.”


Unchecked Growth

According to Shelly, there are more than 20,000 of the unregulated machines operating in the state. Some gas stations have built extra rooms on as gaming parlors featuring as many as 50 or 60 of the machines. Shelly says some businesses have put up tents to house the games. In addition to gas stations and convenience stores, the machines can be found in businesses as unlikely as the corner laundromat.

The organization has sent members out to take pictures at the locations, and has published a rogues gallery of photos that show the games—which pay out in cash or tickets that can be redeemed for cash—are easily accessible to children. One photo shows a man playing a slot-like device with his daughter, a toddler, in his lap, wearing pajamas.

“The Pennsylvania Gaming Control Board, the Pennsylvania State Police, the Pennsylvania Department of Revenue, the Pennsylvania State Lottery, the attorney general—everybody who’s looked at the issue has decided that these, in fact, are illegal slot machines,” Shelly said. “So the goal is to shut them down, to get them out of pizza parlors, convenience stores, gas stations, restaurants, bars, taverns, or wherever they might be.”

Before the current crisis, the Pennsylvania State Police had confiscated skill games in several raids across the state. The largest manufacturer of games in Pennsylvania, Pace-O-Matic, is currently in an ongoing legal battle against seizures of its “Pennsylvania Skill”-branded games. However, since the Covid-19 crisis began, the police obviously have had other issues to address.

Meanwhile, Shelly says PAIG has been fielding calls from across the state since the organization released its press statement. “We started a toll-free number, and we’ve gotten north of 150-200 phone calls and emails from people,” he said. “There’s a machine at the gas station around the corner, there’s a machine at the pizza parlor. There’s a convenience store across from a church and my back yard and elementary school… We’re getting some traction. People do want these machines out.”


Nationwide Problem

The problem of unregulated games operating despite the Covid-19 shutdown is by no means restricted to Pennsylvania. A few days after PAIG released its press statement, the St. Louis Post-Dispatch published results of its own research, showing that skill-game operators are defying Missouri’s shutdown order as well.

The newspaper found unregulated machines still plugged in at gas stations in the Columbia area, and estimates that around 14,000 of the games are located in gas stations, clubs and bars around the state.

The largest manufacturer of the unregulated devices in Missouri, Torch Electronics, is embroiled in its own legal battle. The company’s leaders face felony illegal gambling charges in Linn County; the first hearing in that case is scheduled for April 23.

“I don’t expect them to just voluntarily shut off” the machines during the outbreak, Illinois Senate President Pro Tem Dave Schatz told the Post-Dispatch. “They’re willing to break the law as it is.”

Both states have outright bans of the machine pending in bills that are currently stalled in committee, and neither is likely to see any movement this year as the pandemic plays out.

As the casino shutdown continues, so does the national effort by the gaming industry’s operators, regulators and manufacturers to rein in the problem of illegal, unregulated machines. In February, AGEM published a fact sheet that identifies the different types of unregulated machines out there, and a few weeks later, Gaming Laboratories International (GLI) followed up AGEM’s effort with a white paper focusing on the national problem.

“Illegal and unregulated gaming is a rapidly growing problem in the U.S.,” said the executive summary of the GLI study, available at the organization’s website, gaminglabs.com. “Sophisticated technology allows developers to circumvent vague or obsolete criminal gambling statutes, resulting in lost revenue for states and tribes. Moreover, it markedly increases risks for consumers, especially underage and problem gamblers.

“The best way to effectively protect states, tribes and consumers from the harms of unregulated and illegal gambling is through a modernized regulatory framework appropriate for this modern era.”

“We were very supportive of working with AGEM and helping GLI to get their recent white paper out,” said Bill Miller, president and CEO of the American Gaming Association, in an interview with Roger Gros published this week by GGB News. “When I spoke at NCLGS in San Diego earlier this year about the illegal market, I didn’t know why we call them ‘gray market’ machines. They’re simply illegal machines.

“Remember, these machines don’t have any responsible gambling elements. They are not regulated. While some might say they’re regulated by some local entity, they’re certainly not regulated by the states. We need to shine a spotlight on this illegal activity in the same way that we shine a spotlight on local criminal enterprises, like illegal bookmaking and the illegal offshore market.”

Skill-game manufacturers Pace-O-Matic in Pennsylvania and Torch Electronics in Missouri did not respond to requests to comment for this article.


Conduit for Crime

“It’s beyond outrageous in states like Pennsylvania and Missouri that these unregulated machines that rip off players are still powered on,” Marcus Prater, executive director of AGEM, told GGB News, “as regulated casino gaming goes dark and casino workers are losing their jobs. Local authorities need to do the right thing once and for all and shut them down for good.”

PAIG’s Shelly notes that the Pennsylvania State Police has released statements warning that the unregulated machines are ripe for corruption, money laundering, loan sharking and other crime, adding that they have led to robberies at many retail locations.

“A couple of these places have been knocked over—a laundromat, a convenience store/mini-mart,” Shelly said. “These machines are illegal, and they must go. Slot machines belong in licensed, regulated and supervised casinos. Period.”

Articles by Author: Frank Legato

Frank Legato is editor of Global Gaming Business magazine. He has been writing on gaming topics since 1984, when he launched and served as editor of Casino Gaming magazine. Legato, a nationally recognized expert on slot machines, has served as editor and reporter for a variety of gaming publications, including Public Gaming, IGWB, Casino Journal, Casino Player, Strictly Slots and Atlantic City Insider. He has an B.A. in journalism and an M.A. in communications from Duquesne University in Pittsburgh, PA. He is the author of the humor book How To Win Millions Playing Slot Machines... Or Lose Trying, and a coffee table book on Atlantic City, Atlantic City: In Living Color.