On Monday afternoon, the Pennsylvania Supreme Court dropped a bombshell when it ruled that Pennsylvania Skill games were illegal under the Gaming Control Act.
The state’s highest court has ruled that games of skill are slot machines under Commonwealth law and must comply with state crime and gambling laws.
Stipulation to the ruling – enforcement cannot begin until 120 days have passed, giving the General Assembly time to decide on regulating the machines.
According to her websitePennsylvania arcade games such as Gem Master, Pirates, Shamrock Shenanigans, Sugar and Spice, Under the Mountains and Wildebeest Wild “consist of multiple elements that collectively combine skill elements such as puzzle solving, mental visualization, pattern recognition, observation and judgment, dexterity, remembering and/or recording, and timed response without error.”
In 2014, manufacturer Pace-O-Matic introduced the Pennsylvania Skill game, and the Court of Common Pleas of Beaver County ruled it a legal game. In 2023, the Commonwealth Court unanimously ruled that it was a legal game of skill throughout the Commonwealth. There are an estimated 70,000 arcade machines operating throughout Pennsylvania – a number that far exceeds the number of arcade machines in the state.
But today’s ruling changes the game.
Writing the majority opinion, Judge David Wecht stated that “the Commonwealth Court’s interpretation of the applicable statutes, on which the legal status quo entirely depends, is deeply flawed. The Commonwealth Court was wrong on both counts. Under a simple interpretation of the law, ‘gaming of skill’ devices are subject to both the Gambling Act and the Criminal Code.” We therefore reverse the orders of the Commonwealth Court in both the POM and Three Devices cases.”
Wecht also addressed the issue of the 120-day stay.
“Of course, because everything that follows is a consequence of statutory law, our General Assembly is also free to take any legislative action it deems appropriate at any time. To that end, we emphasize that our decision today is not based on, or constitutes an endorsement of, any particular political view regarding the spread of ‘skill games’ throughout the Commonwealth. Determining and implementing Pennsylvania’s “public policy” is the prerogative of our government’s legislative branch, not the judicial branch, and it is a prerogative that the General Assembly has already exercised. To put it more clearly, what one thinks about access to “games of skill” or other types of slot machines – or about the broader legalization and normalization of gambling in our society – is more a matter of uncomplicated application of existing statutory law.
Chief Justice Debra Todd AND Judge Daniel McCaffery joined the opinion. judges Sallie Mundy AND Kevin Brobson joined the opinion on the appeal for 50 MAP 2024.
Judge Christine Donohue submitted a concurring opinionagreeing in the end.
Brobson submitted a concurring and dissenting opinion in which Mundy joined in, in which he agreed that slot machines were subject to the provisions of the Criminal Code, but not the Gambling Act.
Judge Kevin Dougherty did not participate in the dispute or decision.
State decision-makers, including: Governor Josh Shapirorecognized the skill games industry as a potential source of tax revenues, proposing the legitimization and taxation of slot machine revenues at rates similar to those imposed on casinos. The details of these proposals have proven to be a sticking point in recent budget negotiations.
In its 2026 executive budget applicationShapiro suggested 52% tax on gross terminal revenues from arcade gameswhich his administration estimates will generate more than $2 billion annually.
“We appreciate the clarity the Supreme Court provided in today’s ruling,” Pennsylvania said Senate President pro tempore Kim Ward (R-Westmoreland) i Senate Majority Leader Joe Pittman (R-Indiana) in a statement. “As expressed in today’s decision: ‘On a plain interpretation of the law, ‘gaming of skill’ devices are subject to both the Gambling Act and the Criminal Code.”
“The proliferation of skill gaming is a public safety issue that must be addressed, and given the timing of this decision, we believe that gaming reform is a key component of this year’s budget solution. Additionally, given the fiscal realities facing our Commonwealth, it is clear that new revenues from gaming reform should be directed to the General Fund, as the Governor proposed in his 2026-2027 budget.”
The Attorney General’s office argued that including a so-called skill element in the games did not exempt the devices from Pennsylvania’s gambling laws.
“Today’s ruling is a significant victory for consumers, taxpayers and the rule of law in Pennsylvania.” Attorney General Dave Sunday he said. “The Supreme Court recognized what our office has argued all along – these machines operate as gaming devices and cannot legally exist without the same oversight, regulation and accountability as other forms of legalized gambling in the commonwealth. Pennsylvanians deserve protections that ensure gaming is fair, transparent and operated within the bounds of the law.”
House Republican Party Leader Jesse Topper (R-Bedford/Fulton) was encouraged that the Supreme Court’s decision would force the legislature to act.
“Today’s decision will hopefully force us to address an unregulated sector of the gaming industry that has helped both mom and pop and local veterans’ clubs and organizations while negatively impacting classic gaming operations in Pennsylvania.
“It is long past time to implement significant reforms to strengthen the industry as a whole and provide our local businesses with the tools to remain viable in today’s marketplace while protecting our most vulnerable populations from falling into addiction.”
Not surprisingly, Pace-O-Matic opposed this decision.
“We are disappointed in the Pennsylvania Supreme Court’s decision and strongly believe that it does not accurately reflect the facts presented – in particular, the same facts that led to a number of lower court decisions upholding the legality of our skill games, including a unanimous ruling by the Commonwealth Court,” the company said in a statement.
“Unfortunately, this opinion will have far-reaching consequences, and the real victims will be over 10,000 small businesses and affiliated clubs in Pennsylvania. They potentially face an impossible choice: stop operating these games and lose an important source of revenue, or strike down a legislative solution that could result in over-regulation and crippling taxes, which will force them to stop operating these games and lose an important source of revenue. A better solution is for the legislature to support a common-sense approach.” legislation that would tax and fairly regulate skill games, such as bipartisan bills sponsored by Senator (Gene) Excuse me (SB 1079) I Representative Danilo Burgos (HB2213).”
No comments were forthcoming from state Democrats.
