Pennsylvania Casinos Petition State Supreme Court to Consider Skill Games Legality

Posted on: March 27, 2023, 11:26h. 

Last updated on: March 28, 2023, 08:22h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Pennsylvania casinos contend that skill games, sometimes called gray games by their opponents, violate the state’s Race Horse Development and Gaming Act. But after numerous lower courts in the commonwealth have ruled in favor of the skill gaming manufacturers over the legal, regulated casino industry, the casinos are hoping to take the case to the highest court in the Keystone State.

Pennsylvania casinos skill gaming machines
Pennsylvania Skill gaming machines are pictured in a convenience store. Attorneys representing six Pennsylvania casinos argue that skill gaming machines run afoul of state gaming laws. The casinos have petitioned the state Supreme Court to consider the matter. (Image: Republican Herald)

Georgia-based Pace-O-Matic (POM) is a leading manufacturer of skill gaming terminals. The machines look and sound similar to Las Vegas-style slot machines, but they have a major difference in how they operate.

Instead of a spin automatically telling a gambler if their bet won or lost, a skill machine requires the player to identify a winning payline. That aptitude element constitutes the skill component.

POM officials and supporters of the controversial gaming terminals, which are not subject to state regulations nor monitored for fair play, say the skill component renders the apparatuses as skill games and not games of chance.

Since the Pennsylvania Gaming Act doesn’t regulate skill games, several judges in the state’s common pleas, commonwealth, and superior courts have sided with POM and other skill industry entities. Those rulings came as a result of numerous complaints brought by POM against state agencies, including the Pennsylvania Bureau of Liquor Control and Enforcement (BLCE) and the Pennsylvania Department of Revenue (DOR), for seizing the company’s assets.

Mom and Pop Gaming

Court judges in Dauphin County and Monroe County recently ruled that the state wrongly seized POM gaming machines and related equipment and cash from at least four businesses in 2021. The raids were carried out by the BLCE in conjunction with the Pennsylvania State Police.

Since the Gaming Act doesn’t regulate skill gaming, those courts determined that state law enforcement erred in apprehending the devices.

This ruling again reaffirms our status as legal games of skill,” declared Pace-O-Matic spokesperson Mike Barley. “This is another tremendous victory for Pennsylvania Skill games, powered by Pace-O-Matic, and our Pennsylvania small business and fraternal partners.”

Supporters of skill games say the gaming machines benefit small businesses, not large, multibillion-dollar casino empires and their investors. Host businesses typically split a skill gaming machine’s profit with the manufacturer and route distributor. None of the gaming income is taxed.

Opponents argue the machines hurt the state lottery and gaming industry, which significantly benefits the state through an array of tax-sponsored programs. And since skill games aren’t regulated, critics claim the devices provide no consumer protections.

Supreme Court Petitioned

Attorney Joel Frank of the Lamb McErlane law firm last week filed a notice of appeal of a 2019 Commonwealth Court opinion that went in POM’s favor. Frank represents six state casinos in the matter: Parx, Mohegan Pennsylvania, Hollywood Casino at Penn National Race Course, Hollywood Casino at The Meadows, Harrah’s Philadelphia, and Wind Creek Bethlehem.

Frank is requesting the Pennsylvania Supreme Court agree to review the 2019 ruling reached by Commonwealth Court Judge Patricia McCullough. That decision found POM machines are not governed by the Gaming Act, and therefore cannot be seized by law enforcement under the legal code.

Because the plain language of the Gaming Act indicates that the General Assembly did not intend for the Act to regulate unlicensed slot machines … the POM Game is not subject to the Gaming Act,” McCullough wrote in November 2019.

The casinos haven’t been able to appeal McCullough’s ruling because of an ongoing separate lawsuit filed by POM against the DOR and City of Philadelphia. In that case, POM sought to recoup its property and financial assets. POM withdrew that litigation recently, which cleared the way for the casinos, DOR, and Pennsylvania Gaming Control Board to appeal the 2019 McCullough ruling.

Finally, the Supreme Court will soon announce whether it will take up the years-long dilemma in Harrisburg.