New Skill Games Legislation draws criticism of PA Lottery, PGCB

Pennsylvania is scuffling with how to get a handle on largely unregulated skill games widening across the Commonwealth. With several court cases unsettled in several jurisdictions, these games of skill are drawing the attention of multiple lawmakers. A PA senate bill stuck in committee since July had proposed simply outlawing the games.

A House bill backed by Rep. Dan Moul seeks to legalize, regulate, and tax the games. The House Gaming Oversight Committee heard testimony on Moul’s bill on Wednesday. Both the PA Lottery and the PA Gaming Control Board(PGCB) expressed serious reservations about Moul’s current iteration of the bill.

Lottery claims serious losses to skills games

The PA Lottery says 23% of its roughly 9,800 retailers also have skills games in their locations, puts its loss to the skills machines in annual sales. Those losses will only exacerbate under Moul’s proposal according to the lottery. Drew Svitko, executive director of the PA Lottery claimed, “Our initial calculations indicate the legislation could result in nearly $368 million to approximately $600 million annual sales losses to the lottery.”

PGCB claims the bill has no funding for regulation

The bill in its present form would put the responsibility on the PGCB to regulate and oversee the skills games. But PGCB Executive Director Kevin O’ Toole testified overseeing skills games is not among the duties of the gaming board as the law is now written. He also asserted the proposed legislation does not provide a stream of new revenue to fund investigations and licensing in a new area of responsibility. O’Toole also pointed the complexity in assessing the fairness of a skill-based game. Fairness cannot be objectively tested because everyone’s skill level differs.

PA State Police say skills game wagering illegal

The leader of the PA State Police Bureau of Liquor Control Enforcement Major Scott Miller, said skills games are seen as illegal gambling within his organization. A 2014 court ruling in Beaver County had ruled the games legal but the opinion has not guided most jurisdictions.

Most enforcement has de facto fallen to the State Police. He called the current unregulated play “ripe for corruption” because the machines generate millions with no public accounting and no public benefit for the machines in bars. Miller claimed he is also worried about under the table side-deals and loansharking.

The state has taken court action against two manufacturers in the past, and two additional cases are pending, said Miller. Police have cited 13 host locations.

In some instances, illegal gambling parlors filled with dozens of the machines have operated in the state, said Miller. Demolishing seized machines can take two years and paying for legal experts to make a case has hit as much as $12,000 in one case.

Miller asked for “prompt clarity” from legislators on the legal definition of what constitutes a skills game. With clarity, Miller said he would expect more voluntary compliance.