The developer behind a range of popular skill game machines in Pennsylvania claims it does not directly compete with slot machines. [Image: Shutterstock.com]

Pointedly applauding the results

A long-running issue in Pennsylvania is the availability of so-called skill game machines at many convenience stores, bars, restaurants, and shopping malls that many people liken to slot machines.

not in direct competition with traditional slot machines

A company that creates these games has issued a press release defending its products, saying that they are not in direct competition with traditional slot machines found at casinos.

Georgia-based Pace-O-Matic, which created the software for the skill games started its statement by commending Pennsylvania’s 8.7% year-on-year increase in May regulated gambling revenue, a total which reached almost $521m.

A controversial matter

Pace-O-Matic went on to highlight how much benefit “small businesses, veterans groups, volunteer fire companies, and other fraternal clubs” get from the money that comes from offering skill game machines.

claiming that casinos are “greedy” and “want to kill small businesses”

Company spokesperson Mike Barley believes that the Pennsylvania Gaming Control Board numbers show that skill game companies and land-based casinos can operate in unison without competing. He used strong language, claiming that casinos are “greedy” and “want to kill small businesses.”

The state’s commercial gambling sector is trying to outlaw skill games. A Supreme Court case is in the cards, with State Attorney General Michelle Henry appealing a ruling last year that said these games don’t violate the Gaming Act as they have elements of skill and therefore are not illegal gambling machines.

Changes on the horizon

Skill games are currently untaxed and unregulated; the revenue they make is divided between the businesses hosting machines, the manufacturer, developer, and distributor of the terminals. Barley claims that the small businesses offering skill games can’t afford to pay the same level of tax that casinos do.

Pennsylvania is currently home to 17 land-based casinos, as well as sportsbooks, iGaming platforms, video gaming terminals, and daily fantasy sports.

Pace-O-Matic supports legislation that would regulate skill games and tax them at an appropriate level. The bill claims that the tax revenue from skill games would reach $250m in the first year and Governor Josh Shapiro is on record saying that he wants this income to be a part of the 2024-2025 budget. He wants a hefty 42% tax rate versus the 16% tax that the legislation proposes. Casinos in the state currently pay an effective tax rate of 54% on their slot machine revenue.