Pennsylvania Skill Game Manufacturers and Operators Fight Philadelphia City Council Ban

G&B Amusements, a distributor of Pace-O-Matic (POM) gaming machines, and Philly-based 7-Eleven franchise owner Tariq Jalil are suing the city of Philadelphia to keep the machines operating in spite of a municipal ban. The lawsuit is an attempt to block legislation passed by Philadelphia City Council last week banning skill machines inside convenience stores and gas stations.

The Council passed the bill prohibiting the devices from any establishment without a liquor license and a minimum of 30 seats last Thursday. The move comes two days after the state’s Supreme Court upheld a lower court ruling permitting the machines. Under the bill, exempted locations, like taverns, bars, and clubs, must have fewer than five machines.

The same day the legislation passed, the plaintiffs filed a lawsuit against the city on behalf of Philly business owners.

In a statement provided to Bonus, Mike Barley, spokesman for Pennsylvania Skill powered by Pace-O-Matic, said the action is a response to the council’s vote.

Because City Council passed the ordinance, we have been forced to take legal action against the city to protect the interests of hardworking Philadelphia business owners. On Thursday, we filed a lawsuit in the Philadelphia Court of Common Pleas. The lawsuit is premised on the multiple ways the ordinance would violate the state and federal constitutions.

Courts Uphold Skill Game Legality

Notably, Pennsylvania, which regulates several types of gambling already, has been struggling to stamp out the gray market. However, after authorities raided skill game businesses and confiscated proceeds, the business owners sued, arguing for the devices’ legality and the return of their property.

Unfortunately for the state, the Commonwealth Court ruled for the plaintiffs in both cases, agreeing that POM and Banilla Games (another manufacturer) had shown their products to be “games of skill.”

Last Tuesday, the Supreme Court denied the state’s appeal in the Banilla matter, upholding the lower court’s decision to allow the machines to continue operating. While still undecided, the second matter involving POM will likely reach a comparable conclusion due to the similarities between cases.

Regardless, two days after the Banilla decision, the Philadelphia City Council voted unanimously to pass Councilman Curtis Jones’ bill.

According to the council’s weekly report, banning skill games in convenience stores and gas stations is a public safety issue.

Philadelphia Police and community advocates supported the regulation, while game manufacturers and business owners pushed back against what they say is an unfair prohibition.

Proponents Advocate for Regulation, Not Bans

While Barley acknowledged illegal gambling is a concern, he said banning legal machines is unwarranted.

We take the welfare of the city seriously and agree with council members that the number of illegal gambling machines cropping up in Philadelphia locations is a problem. A ban that includes legal skill games is not the answer. It will only jeopardize the livelihoods of many city small businesses.

Instead, skill games proponents are advocating for regulation, which Gov. Josh Shapiro has proposed (at a 42% tax rate) as part of his upcoming budget.

Said, Barley:

On behalf of those businesses, we had hoped City Council would wait until pending state legislation is passed. Gov. Josh Shapiro and Democratic and Republican lawmakers support a bill that will regulate and tax legal skill games. The state, including Philadelphia, will benefit greatly from the measure because it will provide an estimated $300 million in tax revenue annually. It also calls for shutting down illegal gaming machines. Some of the tax funding, in fact, will be used to help law enforcement crackdown on those games.

He added that several courts have determined that Pennsylvania Skill games are legal, and banning them would harm area businesses.

We advocate for state lawmakers to pass skill game regulation and taxation legislation, and Philadelphia can focus on ridding locations of illegal gambling machines, especially mini-casinos, without harming law-abiding business owners. City council’s action negatively impacts hundreds of city businesses.

About the Author

Robyn McNeil

Robyn McNeil

Robyn McNeil (she/they) is a Nova Scotia-based writer and editor, and a lead writer at Bonus. Here she focuses on news relevant to online casinos, while specializing in responsible gambling coverage, legislative developments, gambling regulations, and industry-related legal fights.
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