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Several Pennsylvania courts have found that “skill games” — played on as many as 70,000 video terminals statewide in convenience stores, civic clubs, bars, and so on — are not games of chance.
Unless the state Supreme Court overturns those decisions, the state Gaming Control Board may not regulate skill games as gambling.
U.S. District Judge Michael Baylson of Philadelphia, meanwhile, ruled May 9 that a skill games lawsuit brought by Parx Casino of Bucks County may proceed.
So the legal question of whether skill game terminals are gambling devices is not fully settled. But according to Republican state Sen. Gene Yaw of Lycoming County, the state government should regulate the enterprise in either case.
The principal difference between video slot machines and video skill game terminals is that slots require no player input other than money, whereas skill games are interactive.
Regarding state regulation, it’s a distinction without a difference. Yaw has introduced a bill to regulate the enterprise through the Department of Revenue, with enforcement assigned to the Bureau of Liquor Control Enforcement.
The proposal would limit the number of machines per establishment, much as state regulations determine the number of slots per casino.
Yaw proposes a $1 million application fee for skill game distributors, a $25,000 fee for operators and a $250 fee for host establishments. The bill also would establish a 16% tax on proceeds, the same rate that applies to casino-based online poker and table games. Casinos pay a 54% rate on slots revenue.
Yaw claims the regime would produce about $300 million a year. The state would assign 50% to the general fund, distribute 22% to county and municipal governments, and use the rest for enforcement.
Yaw, citing a study showing that Pennsylvania’s lottery proceeds have grown at a rate greater than that in other Northeast states that don’t have skill games, contends that skill games do not diminish other forms of gambling — all the more so because they can’t be played online.
Whatever the final numbers, Yaw’s approach is reasonable. It would recognize the games as a valid business, ensure continuing revenue for civic organizations and small businesses, and assuage casinos’ concerns about unregulated competition.
— Wilkes-Barre Citizens’ Voice
