Pennsylvania Gaming Regulators Say Skill-Based Machines Are Illegal, Petition to Join Lawsuit
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The Pennsylvania Gaming Control Board (PGCB) is seeking to join a lawsuit against a skill-based gaming company that manufacturers what the agency believes are illegal gambling devices.
Unlicensed Pennsylvania gaming machines are being challenged in court, and the state’s casino regulatory agency wants its voice heard. (Image: Blaine Shahan/Lancaster Online)
Attorneys representing Greenwood Gaming and Entertainment, the parent company to the Parx Casino outside Philadelphia in Bensalem, has filed a lawsuit against Pace-O-Matic (POM). The casino argues the POM gaming machines commonly found in bars across the state are nothing more than unlicensed and unregulated slot machines.
The PGCB had, for months, refused to weigh in on the matter, saying that illegal machines “are a criminal matter, not a regulatory matter.” But now, the board is speaking up.
In its petition to join the lawsuit, the PGCB says the state’s gaming law passed in 2004 provides player protections, including mandating that slot machines pay out a minimum of 85 cents on each dollar wagered. The skill-based gaming terminals are not subject to such regulations, and also don’t pay the 52 percent gross gaming revenue tax that licensed casino slots do.
Escalating Problems
POM argues that its machines are not gambling devices because of their element of skill.
“Our games have been adjudicated legal as games of predominant skill. The Pennsylvania Commonwealth Court has already ruled that our games are not regulated by the gaming code,” POM said in a statement.
“We are confident our games’ legal status will be confirmed. In the meantime, we will continue to work with the legislature to regulate the legal skill game industry,” the company added.
That “skill” component isn’t exactly difficult, as it basically consists of simply identifying a winning payline. While a slot machine automatically reveals a win, a skill gaming player must tap on the winning reel result.
Tavern owners have welcomed the skill-based gaming machines, as they keep part of the revenue the terminals generate. Local businesses say they’re helping offset money that was lost due to Governor Tom Wolf (D) “freeing the six pack” to allow convenience and grocery stores to sell alcohol.
It’s estimated that there are roughly 20,000 unregulated skill gaming machines in the state.
Lost Money
Wolf is one of the opponents to the skill-based gaming devices. His administration claims the machines are reducing millions of tax dollars that would have otherwise been generated through the lottery. An organization has formed that seeks to bring awareness to the machines’ legality.
“These illegal devices are siphoning off funding for programs that hundreds of thousands of seniors rely on,” Pennsylvanians Against Illegal Gambling said. “The Pennsylvania Lottery estimates the devices have resulted in the loss of more than $200 million in sales.”
That means there is less funding for senior programs such as property tax relief, senior centers, meals on wheels, low-cost prescription drugs, and more,” the group argues.
Last month, the Pennsylvania State Police were cleared to resume their seizures of unlicensed gaming devices. Williamsport skill games distributor Miele Manufacturing had sought an injunction of such raids as the lawsuit regarding skill-based gaming plays out in court.
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