Pace-o-Matic Skill Games Case Headed to Pennsylvania Supreme Court

Photo by Ivan Soto Cobos/Shutterstock

Pennsylvania lawmakers still haven’t clarified the legality of skill game machines, but the state’s highest court may soon make that decision for them. The Supreme Court of Pennsylvania has granted state authorities’ request to appeal the December decision by the Commonwealth Court that the machines don’t meet the definition of illegal gambling devices.

Pace-o-Matic and similar companies manufacture amusement devices that bear a superficial resemblance to slot machines but include meaningful—though typically simple—decisions for the player to make. For instance, some versions of these machines allow the player to choose where to place a Wild symbol in order to complete a winning combination.

According to their manufacturers, this makes them games of skill and, therefore, “not gambling” under most legal definitions, which typically use the phrase “games of chance.”

The Pennsylvania Gaming Control Board and state law enforcement disagree. However, the judicial system has generally sided with the manufacturers’ interpretation of the law.

The Supreme Court may or may not concur. However, it has decided that the issues of the case are, at minimum, worthy of a closer look. It will consider these questions raised by the state:

(1) Does an electronic slot machine cease to be an illegal “gambling device,” governed predominantly by chance, if the machine’s manufacturers embed into its programming a so-called “skill” element that is almost entirely hidden from view and is almost impossible to complete?
(2) Should gambling statutes governing “slot machines” be read in pari materia to supply an appropriate definition of the term?

Skill Machines Offer Pros and Cons for Pennsylvania

Although Pennsylvania courts have repeatedly ruled that the machines are not illegal, they aren’t regulated either. That means they don’t have the same oversight as legal slots and video gaming terminals (VGTs). It also means they don’t contribute tax revenue in the same way or to the same extent.

Pennsylvania municipalities have reaped some revenue from skill machines by taxing them the same way they do toy cranes, arcade cabinets, and other such amusement devices. However, the sums in question are paltry compared to the taxes paid by real-money gambling operators. Collecting the taxes has also proven to be logistically complicated. That’s mainly because there are so many of them, and they crop up in unexpected places.

Lawmakers have attempted to address the issue. Unfortunately, there are two camps of thought on the issue, and these have remained deadlocked. On one side are lawmakers advocating for small business interests, arguing that the machines should be regulated and taxed. On the other are those who’ve taken the side of casinos and VGT operators. They say the machines’ ubiquity poses a problem gambling risk, and their legalization would hurt the state’s revenue from existing gambling options.

John Adams, District Attorney for Berks County, is in the former camp. He told PlayPennsylvania:

State legislation needs to act and it needs to act now to bring regulation and taxation to the state. Every day we don’t do something, we’re losing millions in tax revenue.

Neither potential decision by the Supreme Court would restrict lawmakers’ options. Even if the games aren’t gambling, lawmakers could ban them explicitly. On the other hand, they could choose to legalize and regulate them even if the court determines that they are, in fact, illegal under current law.

However, the deadlock in the legislature means a strong bias toward the status quo. Whatever decision the Supreme Court justices arrive at is likely to stand for quite a while unless the opposing camps in the legislature can come to terms.

About the Author

Alex Weldon

Alex Weldon

Alex Weldon is an online gambling industry analyst with nearly ten years of experience. He currently serves as Casino News Managing Editor for Bonus.com, part of the Catena Media Network. Other gambling news sites he has contributed to include PlayUSA and Online Poker Report, and his writing has been cited in The Atlantic.
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