PNA Foundation Summer Internship Program participant Ben Shapiro recently published an exclusive enterprise story for the Bucks County Courier Times examining how a recent Pennsylvania court decision could affect businesses that rely on skill games for revenue.
Shapiro’s reporting explores the potential impact on gas stations, convenience stores, taverns, restaurants and social clubs across the commonwealth, highlighting the real-world implications of the ruling for business owners and their communities.
The article is reprinted with permission from the Bucks County Courier Times. Congratulations to Ben on this outstanding work.
PA skill games are illegal. Does Court decision hurt business | Exclusive
Businesses from gas stations and convenience stores to taverns, restaurants and social clubs that have these machines may have to find new ways to make money.
Ben Shapiro | Bucks County Courier Times
Past the gas pumps outside, behind the rows of snacks and coolers, and nestled between the bathroom and two Pennsylvania lottery terminals at the Lukoil gas station in North Wales sits a machine that manager Krish Dusia says helps pay the bills.
This “skill game” — one of tens of thousands of these terminals in the state — is important to the gas station. Dusia said removing the machine from his store “would hurt business.”
“We make decent money from it,” Dusia said. “It helps for our utility bills.”
But the future of these skill games in Pennsylvania is unclear.
The Supreme Court of Pennsylvania ruled in June that skill games are actually slot machines as defined by the state’s casino gaming law. This ruling meant that these games — found at gas stations, convenience stores, taverns, restaurants, grocery stores and social clubs — are in use illegally.
In his majority opinion, Justice David Wecht wrote that the two Commonwealth Court rulings that gave the green light to the state’s skill game industry in 2019 and 2023 were “deeply flawed” as they placed the machines “outside of the reach of both the Gaming Act and the Crimes Code.”
In Pennsylvania, any machine used for gambling is classified as a slot machine, and users must be 21 years old to play. The age to play skill games is 18.
Bensalem banned skills games at businesses without liquor licenses in 2024.
How clubs may be impacted by skill game ruling
Bonnie Jeinnings, the treasurer of the Sellersville American Legion Post 255, said she’s worried that the organization won’t be able to feature the terminals going forward.
“The bar itself does not bring in enough revenue to keep the post going anymore,” Jeinnings said. “We count on this money. I don’t know what we’re going to do.”
The Sellersville American Legion has three skill games in-house. Jeinnings said they are popular among patrons because they often win money.
Jeinnings noted that the terminals bring in “a couple thousand” dollars a month, which is enough to keep the organization afloat as membership declines. Without the machines, Jeinnings said, the legion would have to close.
“We wouldn’t have a place for veterans to go and socialize. We wouldn’t have a place for veterans to come to if they need help paying a bill. We wouldn’t have the veterans having a local organization to help them out,” she said.
Possible skill game regulations
To operate a slot machine, owners must hold a valid slot machine license issued by the Pennsylvania Gaming Control Board.
There is no equivalent license for skill games.
Since 2014, these games have operated in Pennsylvania almost completely unregulated. Pace-O-Matic, the leading developer of skill games in the state, said this is because, unlike with slot machines found at casinos, the player can win up to 105% of their buy-in value every time they play a skill game.
“[Slot machines] take in a certain amount of money, and then they have a math equation that says we can put this winner out,” said Michael Barley, Pace-O-Matic’s chief public affairs officer. “Our games don’t have that.”
The Pennsylvania Supreme Court, however, found that distinction insufficient to separate skill games from slot machines.
Justices ruled that the level of skill required to play these games was too low to wholly distinguish them from electronic games and slot machines, which face a 55% tax rate and strict regulation.
“The Supreme Court decided that they look like a duck and walk like a duck, and so we’ve decided that they are actually a gambling machine similar to a slot machine, and therefore all the laws that would apply to a slot machine apply to these games,” said Stephen Schrier, the co-chair of gaming and sports practices at Blank Rome, a law firm that represents the casino industry.
The skills required in these games vary from memorization to pattern recognition to the ability to shoot a dragon in a video game-style format, Barley said.
The number of skill games across the state is unclear. Barley said the figure sits at 20,000, while Pennsylvania’s Independent Fiscal Office assumes 50,000. The Pennsylvania Gaming Control Board goes as far as to say there are closer to 70,000 terminals statewide.
The court imposed a 120-day stay from the date of the decision before it takes effect, allowing businesses time to remove skill machines while also providing time for state legislators to consider amendments to the Gaming Act and Crimes Code to potentially permit licensing of the games.
Tax on skill games?
Taxing skill games could bring in more than $1 billion annually by fiscal year 2030, according to a report by Pennsylvania’s Independent Fiscal Office. Should the legislature fail to act, the devices would be subject to seizure by law enforcement.
Pace-O-Matic supports the bipartisan Senate Bill 1079 and its companion legislation, House Bill 2213, which would regulate skill games and place a monthly $500 per terminal fee on the games.
In a press release after the court issued its ruling, the company said that more than 10,000 small businesses and fraternal clubs across Pennsylvania would become “the real victims” if skill games are no longer permitted.
The casino industry is celebrating this decision. Eric Hausler, the CEO of Parx Casino, Pennsylvania’s largest casino, said in a press release that Parx has lost significant revenues to “illegal slot machines.”
“If there is going to be a legal expansion of gaming in Pennsylvania, the skill industry needs to play by the same rules that the rest of us have been successfully playing by since 2006,” Hausler said. “If they can’t, they shouldn’t be allowed to play at all.”
Members of the state Legislature have until mid-October to decide whether skill games should be allowed, with limitations, in Pennsylvania businesses.
Gov. Josh Shapiro has called past attempts at regulating skill games “unfinished business.”
“It’s unfortunate for the people who have relied on this income, but it was pretty clear years ago that these were being challenged and that there was a risk that they would be found to be illegal,” Schrier said. “That’s exactly what I think that 120-day period is designed to address.”
Ben Shapiro is a news intern at the Bucks County Courier Times. Reach him at bshapiro@usatodayco.com.