State Senator Gene Yaw last week began circulating a co-sponsorship memo in preparation for introducing a new bill to officially legalise and regulate the slot-like games. They have proliferated throughout Pennsylvania over the past several years, into bars, truck stops and other businesses. The games, branded ‘Pennsylvania Skill’, are manufactured by Georgia-based Pace-O-Matic (POM). They claim to be legal because an element of skill can improve the chances of winning.
One example of the skill factor, for instance, is a feature that permits the player to place a “wild” symbol anywhere on the reel grid within a specified time interval to complete a winning combination.
Casino, industry opposition
The bill is not without its detractors. Among them are the state’s casino operators, the American Gaming Association (AGA) and the Association of Gaming Equipment Manufacturers (AGEM). They have long battled the spread of the games, contending they are illegal, unregulated slot machines. A central arguing point is that the games operate without assurances of their fairness and with no responsible gaming or anti-money laundering protections.
They also point out that the skill games are untaxed, providing no revenue to the state. Thus, the games represent unfair competition to casino slots, for which operators pay an effective state tax of 54%.
Pennsylvania courts, meanwhile, have returned several decisions in favor of POM. In those cases, the games were seized by state authorities. The manufacturer consistently points to those decisions as evidence of the legality of the games.
Skill games = unfair competition?
POM has maintained that the fact casino slot revenues keep setting records is evidence the skill games are not harming the casino slot business. Operators and slot manufacturers, meanwhile, point to the extensive background checks and licensing fees to which they are subjected. Companies like Pace-O-Matic do not face such requirements.
Yaw, who has benefited greatly from campaign contributions from skill-game manufacturers, has submitted bills to legalise and regulate the games for the past few legislative sessions. However, none have reached a floor vote. He has the support of owners of bars, private clubs, small businesses and charitable organisations that benefit from the revenue.
“Skill games are a piece of the economy in our state,” Yaw told The Center Square. “They cannot and should not be ignored.”
Mike Barley, chief public affairs officer at POM, told the publication that legalisation and regulation would support 15,000 workers at small businesses and volunteer organisations across the state.
“We ask lawmakers to pass this measure because it has helped many of these businesses and organisations stay afloat as they deal with inflation and worker shortages,” he said.
Bill proposals
Yaw’s bill would set a minimum age to play the games and would require machines to be connected to a central collection and control system. This is to ensure accurate collection of taxes. The tax rate that has been floated by proponents is 16%.
The taxation issue has been a particular point of opposition among the state’s casino operators. Last July, operators sued the state to force a tax on skill games, stating that the fact they are untaxed means their own 54% tax on slot revenues is unconstitutional.
A panel of experts at the July conference of the National Council of Legislators from Gaming States agreed that the games are illegal. But they noted it would be difficult at this point to enforce a ban on the games, since some estimates conclude there are as many as 100,000 of them in operation across Pennsylvania.
Original article: https://igamingbusiness.com/uncategorized/pa-lawmaker-renews-effort-to-legalise-skill-games/
