Pennsylvania lawmakers clash over skill game tax rates ahead of budget deadline

Pennsylvania lawmakers remain divided over how to regulate and tax skill games, with competing proposals stalling progress as a key budget deadline looms.

Sen. Chris Gebhard introduced legislation last month proposing a 35% tax on skill games. He said the figure is a compromise between Gov. Josh Shapiro’s proposed 52% rate and Sen. Gene Yaw’s 16% alternative. Slot machines in casinos are taxed at 54%.

“I’ve thought for a long time that the sweet spot can certainly land somewhere between the mid- to upper 20s, maybe 30%,” Gebhard told Lebtown last week, noting that it is not an absolute figure.

“We are basically in the first three innings of the game, and we have a tremendously long way to go before we get to wherever we’re going to settle,” he said. “For people to turn the conversation as negatively as they have, I think, is doing nothing to help us achieve a positive outcome.”

Shapiro included the 52% rate in his 2025 budget proposal. Yaw, whose bill was introduced in April, argues a lower rate will support small businesses and local groups that depend on skill game revenue.

Manufacturers like Pace-O-Matic (POM) back Yaw’s bill and oppose Gebhard’s.

“Senator Gebhard is not listening to business owners and fraternal groups suffering financially from an unstable economy and the skyrocketing cost of food and other goods,” said Mike Barley, POM’s Chief of Public Affairs, in a statement to PlayPennsylvania.

“Local fire departments in the senator’s own district say skill game revenue is essential to their community protection efforts, and they can’t do enough fundraising to keep up with financial demands,” he added. “They are grateful to have skill games to help with ever-increasing costs.”

Lawmakers must reach an agreement by June 30 to start collecting tax revenue for the 2025–2026 fiscal year.