IRS seizes former Pace-O-Matic executive Rick Goodling's cash, accounts

The Internal Revenue Service’s Criminal Investigation branch posted a notice of forfeiture on Sunday listing $443,052 in cash and accounts seized from Rick Goodling, who worked as national director of compliance for Georgia-based Pace-O-Matic Inc.

According to the notice, on November 14 and 15, IRS Criminal Investigations seized from Goodling $152,862 in cash and froze Goodling’s bank accounts at PESCU Credit Union for $81,871, at PNC Bank for $194,413, and Bogowe Consulting in the amount of $13,906.

A spokesman for Pace-O-Matic said Goodling resigned from his position with the company more than a month ago after company officials became aware of the IRS investigation regarding his tax filing.

"We have and will continue to cooperate fully with the IRS investigation and will continue to cooperate with law enforcement regarding this issue," said POM’s Chief Public Affairs Officer Mike Barley in a statement provided to the Capital-Star.

Pace-O-Matic is the parent company of the skill-game brand Queen of Virginia. The games are "skill-based" slot machine-like devices that allow players to pay to play a game to win a jackpot.

The company has been at the center of controversy in Pennsylvania and Virginia over whether the games are gambling or involve actual skill. The company contends that the machines are distinguishable from slot machines because players must use skill to win, rather than rely on chance. A state court in Pennsylvania has agreed.

However, the Supreme Court of Virginia has reinstated a ban on the machines. The Pennsylvania Attorney General’s Office has filed a petition in the state Supreme Court to appeal a Commonwealth Court decision that skill games are not gambling devices and therefore are not illegal.

Goodling testified in a Pennsylvania Senate Community, Economic, and Recreational Development Committee hearing on skill games in October that he retired from the Pennsylvania State Police in 2019 after 27 years. During his service, Goodling said he became recognized as a national expert in illegal video gaming devices and led the state police gambling unit for more than 15 years.

In a 2019 Pennsylvania House Gaming Committee hearing, Goodling testified that Pace-O-Matic has a team of former state troopers and liquor enforcement officers tasked with visiting the company’s clients “to weed out illegal gaming machines that should not be in the marketplace.” The team reports illegal machines to state police and encourages organizations such as fire companies and VFW halls to replace illegal gambling machines with skill games, according to Goodling.

In a press release, the company argued that skill games provide critical revenue to restaurants, bars, taverns, VFW halls, and American Legion posts throughout the country. 

Pace-O-Matic does not disclose how many machines it has in operation or publish revenue figures except in the District of Columbia and Wyoming where it is required by law to do so. According to the Wyoming Gaming Commission’s annual report, distributors of Pace-O-Matic’s game Cowboy Skill reported a combined $74.5 million in revenue in 2022.

While litigating the legality of its devices in Pennsylvania, Pace-O-Matic has also pushed to have the machines regulated and taxed, which lawmakers who support the idea say would raise millions in new revenue for the state.

Pace-O-Matic faces opposition from the gaming industry and from lawmakers who say the games have been a scourge in their communities, bringing crime and enticing minors to use the devices.

"We take no issue with the casinos, and the evidence shows that we can coexist with them in a regulated market," Barley argued last year. "But it seems that the casino industry will rest at nothing until they stamp out any perceived competition. Studies have shown that skill games have no impact on casinos, and their own financial reports back that up."

The company has been politically active in Virginia and Pennsylvania, donating more than $930,000 to Virginia politicians since 2018, and contributing more than $1.8 million to Pennsylvania campaign committees since 2017, including $43,500 to state Sen. Gene Yaw (R-Lycoming) who is the prime sponsor of legislation to regulate and tax skill games.

Miele Manufacturing, which builds Pennsylvania Skill Game units for Pace-O-Matic, is in Yaw’s district. Yaw’s law firm has also filed lawsuits on behalf of Pace-O-Matic against lobbyists it accuses of intentionally spreading false information to damage its business.