Commonwealth Court Rules Skill Games Legal in Pennsylvania

In a landmark decision, the Commonwealth Court of Pennsylvania upheld the legality of “skill games” played for cash prizes. The unanimous ruling by the court is a major win for the operators and manufacturers of these devices, which have become increasingly popular in gas stations, bars, and restaurants across Pennsylvania.

The 7-0 decision confirmed the ruling of the lower court, which stated that the skill games were not illegal gambling devices or slot machines. The court emphasized that the games are primarily based on skill and coordination, rather than chance. This distinction is crucial, as it sets the devices apart from traditional gambling machines.

While the state attorney general’s office hinted at a possible appeal to the Pennsylvania Supreme Court, for now, businesses and nonprofits are free to continue offering cash prizes through skill games. These games are similar to slot machines found in casinos, and many establishments, such as Mother’s Subs in Harrisburg, have seen them as a lucrative source of additional income.

Despite the popularity of skill games, they are not subject to the same gaming tax as traditional casinos. Industry leaders have expressed concerns, arguing that these unregulated and untaxed games are cutting into the revenue collected by licensed casinos. They have called on lawmakers to take action to regulate and tax the gaming income from skill games.

In response to the court’s decision, skill game machine developers have urged lawmakers to establish regulations and taxes for the devices. A proposed bill aims to create fees for manufacturers and operators, impose a 16% tax on earnings, and limit the number of devices in a single location. However, this tax rate is significantly lower than the 54% tax on casino slot machines.

While skill game manufacturers are eager to be taxed and regulated, officials with the Council on Compulsive Gambling of Pennsylvania have raised concerns. They have called on lawmakers to ensure that the devices include resources to help individuals struggling with gambling addiction. These concerns come as hundreds of individuals have reported that skill games are a particularly challenging form of gambling addiction.

The court’s decision has sparked a debate over the regulation and taxation of skill games in Pennsylvania, with industry leaders, lawmakers, and advocacy groups all weighing in on the issue. The future of these devices in the state remains uncertain as lawmakers grapple with the implications of the court’s ruling.