Pennsylvania Skill Games Poised for Regulatory Revival After Democratic Midterm Gains

Pennsylvania skill games were classified as illegal slot machines following a June Pennsylvania Supreme Court ruling. Last week's midterm election results could enable their regulated return in 2027, as Democrats secured a governing trifecta for the first time since 1993.

The ruling determined that adding skill elements to games of chance does not shield them from the state's Gaming Act. This upended operations for thousands of small businesses, bars, and fraternal clubs. Lawmakers could not pass regulating and taxing legislation before the 120-day safe harbor ended on Oct. 14, due to divisions in Harrisburg.

Senate Barrier Removed

Democrats will hold a 26-24 Senate majority and at least 111 seats in the 203-member House when the General Assembly convenes on Jan. 5. The prior Republican Senate majority had been blamed for blocking a unified regulatory framework, even though support for skill games crosses party lines.

Gov. Josh Shapiro has repeatedly called for legalizing and taxing the terminals at 52%, a rate his office estimates would raise almost $766 million in the first year. Skill game advocates, including the Pennsylvania Skill Alliance and Pennsylvania Taverns and Players Association, argue for a lower fair tax to sustain small businesses and employment. Licensed casinos contend the machines cannibalize their slot revenue after they paid millions in licensing fees. The Pennsylvania Lottery opposes the terminals, and local Gamblers Anonymous chapters report increased problem gambling linked to the devices.

Police Report Near-Total Compliance

On Nov. 10, the Pennsylvania State Police reported inspecting 12,202 businesses since Oct. 14, with 12,134 having removed the machines for a 99.4% compliance rate. Officials seized 14 machines and $1,913 in cash from the remaining sites. As reported by Casino.org News, authorities warned against using cashless or sweepstakes terminals to circumvent the ban, citing risks of equipment forfeiture and criminal charges for businesses and distributors.

Negotiations in the new legislative environment will determine whether a workable tax rate emerges that addresses stakeholder concerns while generating state revenue.