Published: August 20, 2022

Lawmakers need to address the growing threat posed by illegal skill games

Pennsylvania’s casino industry is a major driver of our statewide economy that benefits every single taxpayer, whether they happen to enjoy gaming or not.

The PA Gaming Control Board (PGCB) reports that annual gaming revenue exceeded $5 billion for the first time ever in FY 2021-22 (which ended June 30).

Perhaps more importantly to Pennsylvanians is the fact that the state’s casinos generated more than $2 billion in tax revenues in FY 21-22. This, too, is a record. In fact, Pennsylvania collects more gaming tax revenue than any state in the nation.

Casinos also deliver more than $150 million in annual local share grants to first responders and nonprofits in their local communities and invest more than $500 million annually with Pennsylvania businesses. This industry supports more than 30,000 jobs across the state for a total of $2 billion in annual wages, benefits and tips. That is an enormous and positive impact.

It is imperative that lawmakers consider these workers, and the industry’s contribution to every taxpayer as they debate proposals to expand gaming, specifically legislation sponsored by state Sen. Gene Yaw that would regulate what leading law enforcement agencies have said repeatedly are illegal skill games.

Skill games – video slot machines - have exploded in bars and taverns, gas stations and convenience stores, laundromats, corner stores and thrift shops, even though the Office of Attorney General and the Pennsylvania State Police believe these machines are illegal.

These machines do not generate a penny in gaming taxes. They also are bringing crime to communities across the state, and they drain revenue from programs for seniors that the Pennsylvania Lottery funds.

PA State Police leadership, in testimony provided to lawmakers in June 2021, said that the operation of these machines is “ripe for corruption” and that “…there are no active safeguards to prevent minors from gambling, unlike the safeguards instituted within licensed casinos.”

The State Police also testified that, “PSP, along with other law enforcement agencies throughout the Commonwealth, continue to see increased criminal activity associated with the use and operation of these devices.”

The State Police are not alone:

Office of Governor Tom Wolf: (PlayPA article dated June 3rd, 2020) “The administration believes Pennsylvania must take a hardline on illegal gambling, including so-called ‘games of skill’ and other slot machines. These machines are illegal, unregulated and put senior programs at risk by siphoning revenue from the Lottery.”

PA Office of Attorney General: (PlayPA article dated June 3rd, 2020) “The question of whether ‘skill games’ are legal is currently pending before the Commonwealth Court and OAG is representing State Police and the Department of Revenue in that litigation. While we continue to maintain that ‘skill games’ are illegal, as an agency, we have elected not to actively seize machines until the Commonwealth Court provides guidance on the issue.”

PA Gaming Control Board Chief Counsel Doug Sherman: (Senate Community, Economic and Recreational Development Committee Public Hearing on June 7th, 2021) “It is the Board’s position that we support the position of the Pennsylvania State Police that those machines [skill game machines] are not authorized by the Gaming Act.”

PA Department of Revenue: (PlayPA article dated March 19th, 2019) “Our opinion is that those so-called games of skill are not legal under current law,” Secretary of Revenue Dan Hassell said. “That is the opinion of the state police, that they have been talking about. And we support their position on this. There are a couple of cases that are working their way through the courts to seek a ruling on that specifically.”

Lottery executive director Drew Svitko has testified that these machines drain more than $200 million annually from the Lottery. Every dollar pumped into an illegal machine comes at the expense of seniors who rely on meals on wheels and other lifesaving programs the lottery funds.

Pennsylvania got it right in 2004, when gaming was first introduced, and then in 2017 when gaming was expanded to include online gaming and ten new casinos. Rather than regulate illegal gaming devices, lawmakers should tighten current state law to remove these machines and the threat they pose to communities, seniors and 30,000 workers.

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