Pa. Sen. Gene Yaw announces plans for legislation to tax, regulate ‘skill games’

They’ve made their way into bars and convenience stores across Pennsylvania, but so-called “skill games,” which critics have labeled as unregulated and illegal, are the subject of an ongoing battle in Harrisburg.

While some want the games banned, arguing that they annually result in millions of dollars in lost revenue for the Pennsylvania Lottery and casino industry, one Republican state lawmaker — who considers them a lifesaver for businesses — wants to tax the machines.

“Skill games are an important part of the small business economy in our state and will be one way to make sure that everybody makes it beyond the pandemic,” Sen. Gene Yaw, R-Lycoming, told reporters during a Wednesday press conference.

Yaw, joined by state Reps. Jeff Wheeland, R-Lycoming, and Danilo Burgos, D-Philadelphia, announced plans for legislation, dubbed the “Skill Gaming Act,” that will tax and regulate the skill games.

“We want to do it right — not just get it done,” Yaw said, adding that work to draft the bill’s language is ongoing. “There was a question brought up by one of my colleagues from Philadelphia about enforcement in Philadelphia, so we’re working through that issue as we speak.”

Pace-O-Matic, a Georgia-based company that manufactures “Pennsylvania Skill” machines, has spent more than $1 million lobbying in Pennsylvania since 2018, according to Department of State records. The company also hosted an event for elected officials at downtown Harrisburg’s Federal Tap House, one of at least two skill game-related events.

Earlier this year, Senate President Pro Tempore Jake Corman, Senate Majority Leader Kim Ward, and House Speaker Bryan Cutler, R-Lancaster, planned to return campaign contributions from the Operators for Skill Political Action Committee, GoErie reported in June. The PAC receives funding from members of the gaming industry, including Pace-O-Matic employees.

Yaw kept contributions from the PAC, referencing a 2014 court decision made in Beaver County that deemed the machines legal.

During the same week that lawmakers announced plans to return campaign contributions from the PAC, officials from the Pennsylvania Lottery and law enforcement representatives testified before the Senate Community, Economic, and Recreational Development Committee. 

They asked the Legislature for help combating the “illegal” skill games, saying that the unregulated machines result in an estimated $145 million loss in scratch-off ticket sales each year. The Pennsylvania Lottery helps generate billions of dollars for programs that benefit senior citizens. They also noted that it’s often hard to distinguish machines that are not authorized by the state. 

Yaw said his legislation will include regulation and enforcement measures, as well as “ample taxes” the industry will pay to the state, he said.

Wheeland, who said he’s talked with lottery retailers that also host skill games, argued that lottery sales go up in locations with both offerings. He’s running a companion bill in the House of Representatives that will help law enforcement remove “illegal” games that come from outside of Pennsylvania that operate in bars, convenience stores, and restaurants. 

“The skill games, it’s entertainment,” he said. “It’s just a good thing for our clubs and our small businesses at this time.”