The Supreme Court of Pennsylvania ruled Monday that Skill games found in convenience stores, bars, fire halls, and veterans organization headquarters, among other places, are illegal slot machines under state law.
That decision could have an impact on those businesses and organizations across Schuylkill County that have come to rely on the cut of revenue they get from players using them in their establishments. It will also have a major impact on municipalities that have recently jacked up so-called license fees – many as high as $1,000 per machine annually – assessed to businesses that have chosen to host Skill machines.
Monday’s ruling gives the General Assembly until mid-October to formally legalize and regulate the multi-million dollar industry. If lawmakers take no action before the 120-day safe harbor window closes, the Skill machine devices operating statewide would be subject to law enforcement seizure.
The justices’ decision ends a legal gray area that had allowed the Skill game industry to bypass state gambling regulations and taxes. The high court determined that operating these devices without a license violates both the Pennsylvania Race Horse Development and Gaming Act and the state Crimes Code.
Attorneys for game distributor POM of Pennsylvania LLC and the establishments housing the machines argued that state gaming laws were designed strictly for large-scale casinos, not neighborhood small businesses. They also maintained that because the devices require player skill, they do not meet the traditional legal definition of a game of chance.
Skill games feature a memory-test puzzle, which a traditional slot machine does not. If a player loses their initial bet on the digital slot reels, they can play this memory game to win back slightly more than they wagered. Because a skilled player could theoretically use this feature to avoid ever losing money, lower courts had previously ruled the devices were exempt from gambling laws.
However, Justice David Wecht, writing for the majority, said a 2017 update to the state’s gaming laws rendered that defense obsolete. Lawmakers explicitly added the terms “skill slot machine” and “hybrid slot machine” to the legal definition of regulated gambling devices nearly a decade ago. Because the law now covers games that blend skill and chance, the Supreme Court ruled that the presence of a skill-based mini-game no longer shields the machines from state oversight.
The justices also dismissed the defense’s argument that state licensing laws only apply to licensed facilities. The court found it illogical to interpret a regulatory law as only applying to those who actually obtain a license, declaring that the gambling statutes broadly apply to any unlicensed gambling device operating within the state.
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