(The Center Square) – A new Pennsylvania Supreme Court ruling that essentially found the estimated 70,000 unregulated and untaxed “skill games” in the state to be slot machines – taxable by law at 52% – had the attention of many lawmakers on Tuesday.
The long-awaited opinion covered appeals in two separate cases and arrived about two weeks before the June 30 deadline for a state budget. It is certain to be a factor in closed-door budget negotiations between Republican and Democratic leaders.
The state takes in roughly $5 billion less than it spends on an annual basis, and Democratic Gov. Josh Shapiro’s proposed budget for 2026-27 put estimated revenue from regulation of skill games at $2 billion-plus. Any budget deal must be approved by a split Legislature in which Democrats control the House of Representatives and Republicans the Senate.
“Skill games are illegal slot machines,” House Democratic leaders said in a statement issued Tuesday afternoon. “We are encouraged that Senate Republicans may now be ready to proceed on bipartisan legislation to regulate skill games. We look forward to seeing what they can pass in a bipartisan fashion in their chamber.”
Senate President Pro Tempore Kim Ward of Westmoreland County and Majority Leader Joe Pittman of Indiana County, both Republicans, said in a statement late Monday that the proliferation of skill games is a public safety matter.
“We believe gaming reform is a critical piece of resolving this year’s budget,” they said.
The court gave lawmakers some breathing room in coming up with legislation.
It put a 120-day stay on the order. During that 120-day stretch, the opinion said, “No law enforcement agency is to take adverse action against owners or operators of ‘skill game’ devices in reliance upon this opinion.”
Many small clubs and veterans organizations across the state pull in significant revenue from the unregulated machines.
On Tuesday, Democratic Rep. Joe Webster of Montgomery County – himself a veteran – said he had reservations about the addictive nature of the games and their effect on older veterans. At the same time, Webster said he also believed the play might have a calming or therapeutic effect for some.
“I have truly mixed feelings,” he said.
Various proposals to regulate the machines have included tax rates ranging from the teens to Shapiro’s proposed level of 52%. Webster said the Supreme Court basically called them slot machines, and with slot machines taxed at 52%, the figure makes sense for skill games.
In a separate interview, Republican Rep. Keith Greiner of Lancaster County said 52% was a nonstarter.
He alluded to the widely discussed belief that numerous small clubs – Veterans of Foreign Wars and American Legion posts included – might close if the tax rate on the machines is too high.
Greiner said, “I am a fair market person.”
