The clock has struck midnight on Pennsylvania skill games.
Legislators in Harrisburg were unable to pass a law regulating skill game machines before Oct. 13, and already, the machines have begun disappearing from taverns and gas stations across the Commonwealth.
In a June ruling, the state Supreme Court found that skill games, which supposedly test players’ hand-eye coordination and memory, are in practice nothing more than games of chance. This, legally, makes them slot machines, which are heavily regulated in Pennsylvania and can only operate in casinos and truck stops.
The Supreme Court, however, prohibited law enforcement from seizing these “illegal slot machines” for 120 days, giving the General Assembly time to pass a new law legalizing them.
That 120-day deadline expired on Oct. 13 with no action. So, in accordance with the law, businesses that operate skill games must deactivate the devices and remove them. The state Attorney General’s office and the Pennsylvania State Police are working to ensure compliance across Pennsylvania. Businesses can voluntarily surrender their machines. For those that do not, state police may forcibly remove the machines and store them in a secure holding area.
This may not be the end of the road for skill games. Leaders in both parties in both chambers of the General Assembly expressed support for legalizing and regulating the machines, as have both candidates in the upcoming gubernatorial election, Gov. Josh Shapiro and his challenger, current State Treasurer Stacy Garrity.
However, any updates on skill games may have to wait until next year. The current legislative session in Harrisburg is nearing an end, and elections are drawing the focus of most legislators, so any progress this term is unlikely.
Skill game updates next term will also likely depend on the outcome of the upcoming November elections. Polls show Shapiro leading the governor’s race by a wide margin, but control of the state House of Representatives and state Senate is still up for grabs. No skill game agreement was reached this term in large part because of partisan disagreements. Democrats controlling the state House and Republicans controlling the state Senate were unable to compromise on a tax rate for the machines.
If Democrats take back control of the state Senate and retain control of the state House and Governor’s mansion, they would have, in theory, a much easier time passing a tax rate favorable to them. However, during negotiations this month, internal disagreements splintered Democrats, showing that even with a trifecta of control, passing a skill game law may be difficult.
State Rep. Danilo Burgos (D-Philadelphia), planned to introduce a bill which would impose a $500 monthly fee on skill games, rather than a tax rate based on a percentage of its income. 104 other Representatives signed on to back this bill, which is enough support for it to pass the House.
According to reporting from Spotlight PA journalist Stephen Caruso, this Burgos bill drew the ire of House Democratic leader Matthew Bradford, who reportedly scolded all House Democrats who signed onto it, because it bypassed the efforts of Democratic leadership to negotiate a bill with Republicans.
High-ranking Democrats like Shapiro prefer a 52% tax rate on skill game machines, which is comparable to the 54% rate paid by casinos for their slot machines. Because skill games were ruled to be legally equivalent to slot machines, the powerful casino industry also favors a high tax rate like 52% for the games.
Many Republicans prefer a lower tax rate for skill games. However, if they win back control of the state Senate this November, progress towards a deal is still likely to continue. Legalizing and taxing skill games would create a major new revenue source for Pennsylvania, which both parties would likely love. Budget negotiations in recent years have been hampered by Democratic attempts to raise new revenue and Republican attempts to eliminate funding deficits. Tax money from skill games would help on both fronts.
For now, skill games are officially illegal and are disappearing across Pennsylvania. How long that lasts is anyone’s guess.
