Pennsylvania Senate eyes 35% tax, stricter rules on skill games

The Pennsylvania Senate is considering legislation that would impose new taxes and restrictions on skill games, a category of gaming machines that has operated for nearly a decade without state oversight.

Senate Bill 756 would levy a 35% tax on skill game machines, limit the number of machines per establishment to seven, and prohibit anyone under 21 from playing. The proposal comes amid growing concern over the spread of unregulated gaming devices in gas stations, convenience stores, laundromats, and fraternal clubs across the state.

“These ‘skill games’, they’re literally everywhere now and they’re taking quite a bite out of the pockets of both our consumers and our casino businesses,” said Senator Dan Laughlin, who supports the bill. While acknowledging their role in the business models of veterans’ organizations and bars, Laughlin described the machines as “mini-casinos” that need to be brought under control.

The proposed regulation has drawn sharp criticism from industry stakeholders, including Pace-O-Matic, a leading developer of skill games. Mike Barley, the company’s Chief Public Affairs Officer, warned that the bill could undermine vital revenue for community organizations.

“This was always trying to find a balance between protecting the revenue that small businesses and fraternal clubs make while providing some benefit to the state, and unfortunately, this bill falls woefully short,” Barley said.

Skill games have helped fund purchases such as volunteer firefighter equipment and supported community initiatives run by American Legions and Veterans of Foreign Wars posts, he noted.

An alternative proposal under discussion would align the tax rate for skill games with the rate applied to casino table games, indicating that lawmakers may yet adjust the bill to ease concerns from affected groups.

The debate over Senate Bill 756 underscores the broader challenge Pennsylvania faces in regulating a lucrative but loosely governed sector while preserving revenue streams relied upon by local organizations.