(The Center Square) – Calls grow on both sides of the political aisle to bring the lucrative skill games industry out of the legal shadows.
The latest proposal, soon to be introduced in the Pennsylvania House of Representatives, acknowledges that not doing so leaves hundreds of millions of taxpayer dollars on the table.
Rep. Danilo Burgos circulated a cosponsorship memo earlier this week that would charge establishments with skill game terminals – typically social clubs, gas stations and taverns – $500 per month per machine, sending $300 million back to the commonwealth each year.
Burgos and other supporters point to a state court ruling that differentiates skill games from similar-looking slot machines because winning requires strategy, not just luck. This means that regulating them the same as slot machines, which pay a 54% tax rate, doesn’t make sense. Nor does ignoring it.
“This is about more than just rules – it’s about making sure these games contribute to the state they call home,” he said.
State Sen. Gene Yaw, R-Williamsport, told TCS he appreciated the growing bipartisan support. It was his bill with Philadelphia Democratic Sen. Tony Williams that inspired Burgos’s own proposal.
“It’s encouraging to see lawmakers in both chambers, from both sides of the aisle taking the initiative to support small businesses and veterans’ organizations,” he said. “The more support around responsible regulation that doesn’t tax them out of existence, the better.”
It’s still far from what Gov. Josh Shapiro wants to see, however. Like last year and the one before, the administration supports a 52% tax on skill games revenue and a 40,000 cap on terminals – 10,000 lower than what Burgos plans.
Anything lower, he says, risks lowering income from the state lottery fund, which offers property tax relief for seniors, to the tune of $386 million in 2024, or about one-third of the its $1.2 billion in revenue. Shapiro says the figure would be higher if not for the spending diverted to skill games.
Advocates of skill games regulation say research about lottery impacts shows just the opposite: business owners say their lottery sales go up when they also operate legal skill games.
Mike Barley, chief public affairs officer for Pace-o-Matic, told TCS that the latest bill not only brings money back to the state, but addresses public safety concerns that arise from unscrupulous establishments with imposter skill games terminals.
“Although many responsible bar and restaurant owners operate within the rules, those who don’t gain an unfair competitive advantage,” he said. “The bill will mirror Senate Bill 1079, sponsored by Senators Gene Yaw and Anthony Williams. Both bills will not only help small businesses but veteran posts, volunteer fire companies and fraternal groups that have skill games as a much-needed way to supplement their revenue.”
