A Pennsylvania state lawmaker has proposed legislation to legalise and regulate skill games before a court-imposed deadline would make the machines illegal across the commonwealth.
Rep. Russ Diamond (R-Lebanon) said Tuesday that his proposal would amend Pennsylvania’s Gaming Act to bring skill games under state regulation and taxation. He said the measure could generate nearly $1 billion in additional property tax relief for homeowners.
“Pennsylvania’s gaming law was originally written for a much different era,” said Diamond. “It’s time to modernize our approach, bring skill games into a regulated system ahead of the state Supreme Court’s October 13th deadline, and make sure Pennsylvania homeowners see a greater benefit from the revenue generated by gaming.”
Skill games are video-based gambling machines that allow players to bet on game outcomes for a chance to win jackpots. Unlike casino games, supporters argue they include a skill component that gives players an opportunity to win back their wager. However, most players reportedly choose to continue betting for a chance at a larger payout.
Critics have argued that the machines are predatory, can expose children to gambling, and may contribute to crime in communities where they are widely available.
The Pennsylvania Supreme Court ruled in June that skill games are subject to the state’s gambling laws, overturning lower court decisions that had excluded the machines from regulation under the Gaming Act and Crimes Code.
Skill games have operated in Pennsylvania for more than a decade in a legal grey area and have become common in convenience stores, restaurants, gas stations, private clubs, and dedicated skill game parlours.
The Supreme Court stayed the effect of its ruling for four months, citing the impact on thousands of small businesses and organisations, including fire companies and American Legion posts, that rely on revenue from the machines. Without legislative action, skill games will become illegal on 13 October.
Gov. Josh Shapiro has supported legalising and taxing skill games in his last two budget proposals as a potential source of state revenue, but lawmakers have yet to reach an agreement on the tax structure and other provisions.
Previous legislative efforts stalled in the Senate over disagreements on the tax rate. Pennsylvania’s casino industry, which is taxed at 55%, has opposed skill games and backed a comparable rate for the machines.
Senate leaders have supported a 35% tax rate, while Sen. Gene Yaw (R-Lycoming) has proposed a 16% rate. Yaw and Sen. Anthony Williams (D-Philadelphia) have also introduced legislation proposing a $500 monthly fee per machine, a structure supported by the skill game industry.
Under Diamond’s proposal, skill games would be taxed at 20%, with a maximum of five machines allowed at clubs, restaurants, and bars holding liquor licences, as well as qualified truck stops. The proposal would also lower the tax rate on casino slot machines and online casino games to 49.9%.
The legislative package would establish a formula for distributing property tax relief, provide annual funding for the Race Horse Development Trust Fund, increase funding for gambling addiction treatment, and generate revenue for Pennsylvania’s General Fund.
Diamond also proposed replacing the current property tax relief mechanism with direct “gaming dividend” payments to the state’s 2.87 million qualified homeowners.
“Every time I talk about property taxes, people complain about not seeing the relief from casinos promised by politicians more than 20 years ago,” he said. Diamond said the proposal would increase property tax relief for 96% of Pennsylvania homeowners, with payments rising alongside growth in legal gaming revenue.
Even without growth in legal gaming or additional revenue from skill games in the next fiscal year, each qualified homeowner would receive at least $702 annually under the proposal, according to Diamond’s news release.