Pennsylvania Lawmaker Proposes 20% Tax on Skill Games to Generate $1 Billion in Homeowner Relief

Rep. Russ Diamond (R-Lebanon) has proposed legislation to legalize and regulate skill games in Pennsylvania before a Supreme Court deadline renders the machines illegal statewide.

The measure would amend the state’s Gaming Act to bring the video-based machines under regulation and taxation. It could generate nearly $1 billion in additional property tax relief for homeowners, according to reporting by Yogonet International.

“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.”

The Pennsylvania Supreme Court ruled in June that skill games are subject to the state’s gambling laws. The court stayed the effect of its ruling for four months. Without action, the machines become illegal on October 13. They have operated in a legal grey area for more than a decade in convenience stores, restaurants, gas stations, private clubs, and dedicated parlors.

Critics argue the machines are predatory, expose children to gambling, and may contribute to crime. Supporters point to a skill component, though most players bet for larger payouts.

Proposal Specifics

Diamond’s plan would tax skill games at 20%, with a maximum of five machines at clubs, restaurants, bars holding liquor licences, and qualified truck stops. It would lower the tax rate on casino slot machines and online casino games to 49.9%.

The package would establish a formula for property tax relief, provide annual funding for the Race Horse Development Trust Fund, increase funding for gambling addiction treatment, and generate revenue for the General Fund. It would replace current relief with direct “gaming dividend” payments to the state’s 2.87 million qualified homeowners. Each would receive at least $702 annually, increasing relief for 96% of homeowners.

The Deadline and Legislative Path

Gov. Josh Shapiro has supported legalizing and taxing skill games in recent budget proposals. Prior efforts stalled in the Senate over tax rates. The casino industry, taxed at 55%, has opposed the machines and sought comparable rates. Senate leaders have backed 35%, while Sen. Gene Yaw (R-Lycoming) proposed 16% with a $500 monthly fee per machine.

As the October 13 deadline nears, this framework offers lawmakers a route to avert disruption for thousands of small businesses and organizations that depend on the machines while channeling revenue directly to homeowners. Agreement on rates and structure will determine whether legislation advances in time.

Reporting: Yogonet International

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