Lawmakers Circulate Memo on Investing in Pennsylvania through the Regulation of Skill Games

Lawmakers in Pennsylvania are scrambling to try to avert the urgent regulatory crisis around the ban of skill game machines, which will go into effect on October 13, 2026. Various lawmakers recently released two matching co-sponsorship memoranda, House Memo 49310 and Senate Memo 49312, to establish the regulatory framework needed to keep these machines in operation. 

The looming crisis 

Small businesses across Pennsylvania are on notice to remove skill game machines from their premises by the end of October 13, 2026. This comes following a ruling by the Supreme Court of Virginia on June 15, 2026, declaring skill game machines as slot machines under the state’s Gaming Act. 

When issuing its ruling, the Supreme Court granted a 120-day grace period for lawmakers to pass a regulatory framework for the skill machines. However, the October 13 deadline is approaching fast without a solution. 

Notably, thousands of small businesses across Pennsylvania rely on the supplemental income from skill game machines to keep operations afloat. To this end, many businesses see the ruling as a death sentence. Unfortunately, any businesses found still housing these machines after October 14 will face law enforcement seizure and criminal charges. 

Notably, thousands of small businesses across Pennsylvania rely on the supplemental income from skill game machines to keep operations afloat, especially as regulated gaming options expand rapidly through land-based venues and online casinos. To this end, many businesses see the ruling as a death sentence. Unfortunately, any businesses found still housing these machines after October 14 will face law enforcement seizure and criminal charges.

Striking a compromise: regulating and taxing skill game machines to generate tax revenue 

While the 120-day grace period offered by the Supreme Court is almost over, lawmakers are scrambling to establish a regulatory framework to keep skill game machines – and the businesses that rely on them – operational. The two memos by Rep. Danilo Burgos (D-Philadelphia) and Sen. Gene Yaw (R-Bradford/Lycoming/Sullivan/Tioga/Union) are the latest efforts by lawmakers to avert the looming crisis. 

The memos acknowledge that skill game machines are integral to small businesses’ operations throughout the state. Moreover, they highlight Pennsylvania’s transportation and infrastructure challenges, noting that roads, bridges, public transit systems, and first responders require substantial, ongoing investment. 

The memos propose establishing a regulatory framework that would expand Video Gaming Terminals at truck stops and tax the skill game machines. The memos propose setting a $500 monthly fee per terminal, with tax revenues estimated at hundreds of millions of dollars. 

The tax revenue generated through these machines would be allocated as follows: 

• 84% for roads, bridges, and public transportation. 
• 15% for Fire & EMS. 
• 1% for administrative costs. 

In addition to the $500 monthly fee, the memos also propose the following regulations for skill game machines: 

• Statewide licensing, testing, monitoring, and enforcement. 
• Central monitoring with auditable records. 
• Independent audits and tools for removing illegal machines. 
• Video surveillance and employee visibility requirements. 
• Age verification, with a minimum age of 21, alongside a self-exclusion program. 

The timeline for passing this proposal is quite tight. The deadline is close, and lawmakers have only three session days left before then. Notably, while there is bipartisan agreement that a solution is essential, there is still a severe lack of consensus on issues like tax rates and machine limits. To this end, it remains to be seen whether the proposal will be enacted in time to avert the crisis.