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Skill-games distributors in Pennsylvania recorded another legal victory on December 6 after a Commonwealth court overturned a Philadelphia ordinance that prohibited the use of skill-games in most businesses.
The ban was overturned after a legal challenge was filed by Harry Sandhu, a gas station owner, and G&B Amusements, one of the top skill games distributors in the city. These skill-based games offer entertainment similar to traditional slot games but require an element of skill in order to win cash prizes. Due to their unique nature, they have operated largely without regulation or taxation, raising concerns among lawmakers, casino operators, and responsible gaming advocates.
A ban on these games was passed in March by the Philadelphia City Council and signed by Cherelle Parker, the mayor. However, the Commonwealth Court judge, Patricia A McCullough, overturned the municipal law this December, citing a court decision that ruled that skill games are not illegal gambling machines under the state’s gaming laws. McCullough wrote, “As the law stands today, POM games that are located outside of regulated facilities are neither illegal nor regulated.”
The court ruling McCullough cited has already been appealed by the state, with the Pennsylvania Supreme Court agreeing to hear the case. If the city decides to appeal the Commonwealth Court’s decision, it would also land before the Supreme Court.
Pace-O-Matic Pleased by Court’s Decision
Pace-O-Matic, one of the leading providers of skill-based games in the US, wasted no time releasing a statement in support of McCullough’s ruling. Mike Barley, the company’s spokesperson, said, “Pace-O-Matic is pleased, and not surprised, that Commonwealth Court agrees the ban passed by Philadelphia city council is unlawful. Lifting it is a victory for Philadelphia small businesses that count on the supplemental income they receive when patrons play the Pennsylvania Skill games they operate in their establishments.’
“This ban did nothing more than harm businesses that are already struggling because of the economy,” he added.
This overturn could also affect a similar ban in Bensalem, a Philadephia suburb, which houses the state’s top-grossing casino, Parx. Reports say that the ordinance is now on hold pending decisions on other appeals.
Meanwhile, stakeholders in the gaming industry have continued their campaign against skill-based games, believing they pose a significant threat to regulated gaming operations. They argue that these unregulated games undermine the integrity of the gaming market, provide no protection to problem gamblers, and divert revenue away from state-sanctioned casinos, which are subject to taxes and strict oversight.
Earlier in May, Parx Casino’s CEO, Eric Hausler, argued the impact of skill games on state revenues by comparing Pennsylvania’s performance to that of neighboring states where skill games are not a factor.
While Pennsylvania’s slots revenue has increased only 4% since 2018, states like Delaware, Maryland, New Jersey, New York, and Ohio have seen substantial growth, with increases of 21%, 22%, 16%, 16%, and 31%, respectively. He pointed out that Virginia, which recently banned skill games, experienced a rise in slot gaming revenue and concluded by saying that these games will not be an issue with proper regulation.
Additionally, Parx and other casino operators continue to challenge the 50% taxation rate in the state, which they deem unfair, as skill-based games are not taxed despite generating significant revenues.
Pace-O-Matic (POM) has stated that it is not against regulation, and with Governor Josh Shapiro and state lawmakers already considering legislation that would impose a hefty 42% tax on these skill games, we can only wait to see what the future holds.
Source: YogoNet
