More oversight for the gambling industry could be coming to Pennsylvania, this time focused on skill games.
A proposed regulation would centralize a monitoring and control system and create a tax structure that could bring in hundreds of millions of dollars to state coffers, advocates say.
Skill games look like slot machines, but are games of skill where gamblers can affect the outcome, as opposed to games of chance like slot machines. They aren’t subject to the commonwealth’s gambling law nor taxes.
“There’s obviously a demand for this type of entertainment,” Sen. Gene Yaw, R-Williamsport, said in a statement. “There’s a lot of these machines out there, somewhere between 20,000 to 70,000, and they're not being taxed. Why not tax them?”
Yaw’s proposed legislation, as described in a legislative memo that doesn’t yet have draft legislation available, “will regulate and establish an additional tax on skill video games in the Commonwealth.”
“This bill will address both the need to clean up the market to rid us of illegal gambling, provide the state with tax revenue, and support small businesses by giving them access to an additional revenue stream,” Yaw wrote. “Skill video games, operated in a regulated environment, will significantly benefit the Commonwealth by providing substantial revenue and creating jobs. All games will be required to be connected to a terminal collection and control system that allows the Commonwealth to monitor all transactions and ensure that all taxes are accrued and paid.”
The potential taxes, Yaw argued, could be big.
“By taxing them, the state can probably generate in excess of $300 million a year in tax revenue. It’s like we have a winning way, or a winning lottery ticket, here – why not cash it in and take advantage of it?” he said.
Yaw has previously cited the $300 million figure when questioned about accepting political donations from the industry. A number of Democrats and Republicans who accepted political donations pledged to return them in the past, though Yaw and the House Republican Campaign Committee declined to do so.
With skill games operating outside the gambling law, seizures of the games and lawsuits crop up; in May 2022, two county courts ruled that police wrongfully seized skill games and were ordered to return them.
