A Pennsylvania legislator has introduced a bill aimed at legalizing and regulating skill games before a court-imposed deadline renders the machines illegal throughout the state.
Representative Russ Diamond (R-Lebanon) announced on Tuesday that his proposal seeks to amend Pennsylvania’s Gaming Act to include skill games under state oversight and taxation. He estimates that this initiative could yield nearly $1 billion in additional property tax relief for homeowners.
“The gaming law in Pennsylvania was crafted for a different time,” Diamond remarked. “It is essential to update our regulations, integrate skill games into a controlled framework before the state Supreme Court’s October 13 deadline, and ensure that homeowners benefit more from the gaming revenue.”
Skill games are video gambling machines that enable players to wager on game results for a chance to win jackpots. Proponents argue that these games incorporate a skill element, allowing players a better chance to recover their bets. However, many players reportedly continue to gamble for the possibility of larger winnings.
Opponents contend that these machines are exploitative, potentially exposing minors to gambling, and may escalate crime in areas where they are prevalent.
In June, the Pennsylvania Supreme Court ruled that skill games fall under the state’s gambling regulations, reversing earlier lower court rulings that had exempted them from the Gaming Act and Crimes Code.
For over a decade, skill games have existed in Pennsylvania within a legal grey area, becoming commonplace in convenience stores, restaurants, gas stations, private clubs, and specialized skill game venues.
The Supreme Court has postponed the implementation of its ruling for four months, recognizing the potential impact on thousands of small businesses and organizations, including fire departments and American Legion posts, that depend on revenue from these machines. If the legislature does not act, skill games will be prohibited starting October 13.
Governor Josh Shapiro has advocated for the legalization and taxation of skill games in his last two budget proposals, viewing them as a potential revenue source for the state. However, lawmakers have yet to agree on the tax framework and other details.
Previous attempts to legislate on this issue stalled in the Senate due to disagreements over tax rates. The state’s casino industry, which faces a 55% tax rate, has opposed skill games and has pushed for a similar tax rate for these machines.
Senate leaders have proposed a 35% tax rate, while Senator Gene Yaw (R-Lycoming) has suggested a lower 16% rate. Yaw and Senator Anthony Williams (D-Philadelphia) have also put forward legislation that would impose a $500 monthly fee per machine, a proposal endorsed by the skill game sector.
Under Diamond’s plan, skill games would be taxed at 20%, with a limit of five machines permitted at establishments such as clubs, restaurants, and bars with liquor licenses, as well as qualified truck stops. The proposal also aims to reduce the tax rate on casino slot machines and online casino games to 49.9%.
This legislative package would create a formula for distributing property tax relief, ensure annual funding for the Race Horse Development Trust Fund, enhance support for gambling addiction treatment, and generate revenue for Pennsylvania’s General Fund.
Additionally, Diamond suggested replacing the existing property tax relief system with direct “gaming dividend” payments to the state’s 2.87 million eligible homeowners.
“Whenever I discuss property taxes, people express frustration about not receiving the relief promised by politicians over 20 years ago,” he stated. Diamond believes this proposal would boost property tax relief for 96% of Pennsylvania homeowners, with payments increasing in line with the growth of legal gaming revenue.
Even without an increase in legal gaming or additional revenue from skill games in the upcoming fiscal year, each qualified homeowner would receive a minimum of $702 annually under this proposal, according to Diamond’s press release.