Pennsylvania Supreme Court Declines Appeal in Banilla Skill Games Case, Pace-o-Matic Still Pending

The Supreme Court of Pennsylvania has declined to hear an appeal by state authorities defending their seizure of gray market “skill game” machines from Banilla Games. That means the Commonwealth Court’s order that the machines be returned to their original owners will stand, and the machines can continue to operate.

That case was one of two appeals before the Supreme Court regarding skill machines. The other, involving Banilla’s competitor Pace-o-Matic, is still awaiting a decision. However, Pace-o-Matic will welcome the news of Banilla’s victory because the cases are so similar.

Both cases were filed by the owners of businesses that hosted the machines. The devices in question bear a visual resemblance to slot machines but incorporate strategic decision-making that their manufacturers say exempts them from being considered gambling devices. Pennsylvania’s gambling laws—like most states’—contain the phrase “games of chance” in their formal definition of gambling.

The state, which already has numerous forms of regulated gambling, has been trying to stamp out the gray market. Authorities raided the businesses in question and seized the machines and proceeds from their operations. The business owners sued for the return of their property, arguing for the devices’ legality in the process.

The Commonwealth Court agreed with the plaintiffs both times. It ruled that Banilla and Pace-o-Matic had adequately demonstrated that their products qualify as “games of skill,” not illegal slot machines.

The Supreme Court didn’t elaborate on its reasons for denying the appeal. Its order states simply:

AND NOW, this 19th day of March, 2024, the Petition for Allowance of Appeal is DENIED.

PA Lawmakers Stuck in Status Quo Paralysis on Skill Games

Banilla was quick to trumpet that the Supreme Court’s decision amounted to a declaration of the legality of its games. All it really means, however, is that the state’s gambling laws failed to anticipate this type of game. Gray market products are those that fit this category of “not illegal” by virtue of falling outside the scope of the law.

Gray market status means such products lack oversight and don’t pay the same privilege taxes as legal gambling products. That pushes the state to try to clarify their legality one way or the other.

However, gray markets can persist if policymakers can’t choose between those options.

Small business lobbies will tend to support regulation and oppose a ban. The machines are big money-makers for the stores they operate in. Politicians in the pro-regulation camp usually express worry about the potential loss of jobs if the machines were removed while promising new tax revenue under regulation.

Conversely, existing gambling interests will do anything they can to keep out additional competition. The Pennsylvania market is already crowded, with retail and online casinos, sports betting, an iLottery, racetracks, and video lottery terminals (VLTs) at truck stops. The VLTs, in particular, overlap quite heavily with skill machines in terms of their target market. The politicians in the prohibition camp tend to focus on the problem gambling issues that widespread availability can cause.

Last year, Pennsylvania lawmakers tried and failed to pass a bill banning the devices. This year, Gov. Josh Shapiro hopes to put regulation for the machines into his budget.

It remains to be seen whether anyone can break the deadlock. However, Virginia recently provided evidence that it can be done, with its pro-regulation camp successfully pushing a bill through earlier this month.

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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