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The Skill Game Battle

Slot-like machines in Pennsylvania, currently not vetted by authorities, are subject to the state's gaming law and regulation, says the PGCB.

The Skill Game Battle

The 2004 Pennsylvania Race Horse Development and Gaming Act officially legalized slot machines. The law set out specific requirements for licensing of both manufacturers and operators of slot machines—strict requirements that prospective licensees demonstrate the background and integrity of their executives and companies.

Those rules also govern the slot machines themselves, which are only approved for sale and operation in the state after they are vetted in a lab to ensure their fairness. Other rules were established requiring slot machines, and the locations in which they operate, only be accessible by players age 21 or older.

In recent years, though, slot-like machines have spread throughout the state that have not gone through any of the requirements set out in the law. Their manufacturers and operators claim they are legal because there is a skill factor that can boost a player’s chance of winning.

Tens of thousands of these games have popped up, not only in taverns, VFWs and fraternal organizations that otherwise offer charitable gaming, but in a variety of locations where the law never intended gambling to take place.

Last month, there was a rally at the Pennsylvania Capitol in favor of a bill proposed by state Senator Gene Yaw that would legalize and tax the so-called skill games.

“Pennsylvania’s skill game terminals are manufactured right here in Lycoming County and the finished products exist in fraternal clubs, veterans’ organizations and taverns, as well as other local businesses throughout the commonwealth,” Yaw wrote on his website. “Skill games are a piece of the small business economy in our state, and it’s time we recognize the benefits of this emerging industry and offer regulatory support, so that we can ensure it flourishes—safely and responsibly.”

First of all, the skill game terminals, branded “Pennsylvania Skill,” may be assembled in Pennsylvania, but they are manufactured, leased and sold by a company called Pace-O-Matic, which is based in Georgia and sells the games in several states.

But one other thing that jumps out when reading Yaw’s statement is that the games operate in fraternal clubs, etc., “as well as other local businesses throughout the commonwealth.” Those ‘other local businesses’ include mom-and-pop convenience stores, pizza shops, laundromats and other small businesses that have no entry restrictions based on age.

Jeff Morris, the vice president of public affairs and governmental relations for Penn Entertainment, unveiled a startling slide show at the recent East Coast Gaming Congress showing children, propped up to reach the buttons, playing what just about anyone would recognize as a slot machine. (See page 46.)

These games are being played by kids.

Skill-game supporters repeatedly point to a decision by a district court judge that because there is some skill involved in play, the games are not within the jurisdiction of the Pennsylvania Gaming Control Board. However, the PGCB is appealing that ruling, on the basis of Act 42, a 2017 amendment to the gaming law that defines a slot machine as any device “which, upon insertion of a coin, bill, ticket, token or similar object therein or upon payment of any consideration whatsoever… is available to play or operate, the play or operation of which, whether by reason of skill or application of the element of chance or both, may deliver or entitle the persons playing… to receive cash,” or anything else of value.

The amendment specifically defines skill games as slot machines, identifying a “hybrid slot machine” as “a slot machine in which a combination of the skill of the player and elements of chance affect the outcome of the game,” and a “skill slot machine” as “a slot machine in which the skill of the player, rather than the element of chance, is the predominant factor in affecting the outcome of the game.”

Short version: These games, by law, are slot machines, subject to the gaming law and PGCB regulation.

Operators of regulated slot machines will be watching the Pennsylvania General Assembly closely, and hopefully, new court decisions will rid the state of these illegal slot machines. As for the VFWs, veterans groups and fraternal organizations saying they rely on the revenues the games generate, they can generate just as much revenue, probably more, with regulated slot machines.

If it’s the skill they like, try video poker. That’s the regulated skill game.

Frank Legato is editor of Global Gaming Business magazine. He has been writing on gaming topics since 1984, when he launched and served as editor of Casino Gaming magazine. Legato, a nationally recognized expert on slot machines, has served as editor and reporter for a variety of gaming publications, including Public Gaming, IGWB, Casino Journal, Casino Player, Strictly Slots and Atlantic City Insider. He has an B.A. in journalism and an M.A. in communications from Duquesne University in Pittsburgh, PA. He is the author of the books, How To Win Millions Playing Slot Machines... Or Lose Trying, and Atlantic City: In Living Color.  

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