Pa. high court rules skill games are illegal slot machines
The Pennsylvania Supreme Court ruled Monday that "skill games" are slot machines and unlawful gambling devices under state law, but stayed enforcement for 120 days so lawmakers can decide how to respond.
The 4-2 decision reverses lower court rulings that had let the slot-machine-like terminals proliferate in a legal gray area, beyond the reach of gaming regulators and law enforcement. An estimated 70,000 machines operate statewide in taverns, gas stations, convenience stores and similar venues, according to the state attorney general's office.
What the court decided
Writing for the majority in a 66-page opinion, Justice David Wecht found that skill games are subject to both Pennsylvania's Gaming Act and its Crimes Code. The court called the contrary lower court reasoning "deeply flawed" and "incorrect on both points," as reported by Spotlight PA.
A skill game meets the statutory definition of a slot machine, the majority wrote, and whether it involves some minor element of skill is irrelevant. "Under a plain reading of the law, 'skill game' devices are subject to both the Gaming Act and the Crimes Code," Wecht wrote.
He traced the conclusion to the legislature itself, citing a 2017 enactment that added the terms "skill slot machine" and "hybrid slot machine" to the Gaming Act's definition of a slot machine. That language, he wrote, makes "abundantly clear" the skill element is not legally significant.
The opinion described how far the devices have spread. "Thriving therein, the devices now may be found not only in taverns, restaurants, and social clubs, but also in mini-marts, gas stations, grocery stores," Wecht wrote.
A 120-day window for the legislature
Recognizing the disruption the ruling could cause, the court stayed enforcement for 120 days. During that window, no law enforcement agency is to act against the owners and operators of the machines, giving the General Assembly time to legalize, regulate and tax the devices or to allow a crackdown. Should lawmakers fail to act, the machines would be subject to seizure.
Wecht stressed that the decision rested on existing statutes and carried no policy judgment. "This is, rather, a matter of straightforward application of existing statutory law," he wrote, adding that the General Assembly remains free to take whatever action it deems appropriate.
The decision resolved two consolidated cases, as detailed by the Pennsylvania Capital-Star. One was a 2019 dispute over the seizure of machines, cash and receipts from a Harrisburg-area business; the other was a declaratory action brought by Pace-O-Matic, the predominant distributor of skill game software. Lower courts, including the Commonwealth Court in 2023, had ruled the games were skill-based and not slot machines.
Reaction from officials and the industry
Attorney General Dave Sunday called the ruling a "significant victory for consumers, taxpayers and the rule of law in Pennsylvania." His office had argued that embedding an element of skill does not exempt the devices from state gambling laws.
Pace-O-Matic, the Georgia-based maker of the software in "Pennsylvania Skill" games, said it was disappointed and that the decision does not reflect the facts. The company warned of "far-reaching consequences," saying more than 10,000 small businesses and fraternal clubs that operate the machines are "now potentially left facing an impossible choice."
Republican leaders in the state Senate said the proliferation of skill games is "a matter of public safety which must be addressed" and called gaming reform a "critical piece of resolving this year's budget." State House Democrats and a spokesperson for Gov. Josh Shapiro said they were reviewing the decision.
Money and the budget
Skill games have been a sticking point in budget negotiations for years. The Independent Fiscal Office has estimated that taxing the machines as part of a regulatory scheme could eventually raise more than $1 billion annually. Shapiro has proposed taxing the terminals, with his budget this year setting the rate at 52% to align more closely with the state's existing tax on casino slot machines.
Lawmakers have long failed to agree on a tax rate, with Senate Republican leaders backing a 35% rate and other Republicans proposing 16%. The justices noted that their ruling is not necessarily the final word, leaving the next move to Harrisburg.
Frequently Asked Questions
What did the Pennsylvania Supreme Court rule about skill games?
The court ruled 4-2 that skill games are slot machines and unlawful gambling devices under the state's Gaming Act and Crimes Code, reversing lower court rulings that had treated them as skill-based and outside gambling law.
Are skill games being shut down immediately?
No. The court stayed enforcement for 120 days. During that period no law enforcement agency is to take action against owners or operators, giving the legislature time to respond before any crackdown.
How many skill game machines operate in Pennsylvania?
An estimated 70,000 machines operate statewide in taverns, gas stations, convenience stores and other venues, according to the state attorney general's office.
What happens after the 120-day window?
The General Assembly can legalize, regulate and tax the machines or allow a crackdown. If lawmakers do not act, the devices would be subject to seizure by law enforcement.
Sources
Reporting compiled from court records and the cited source outlets.