Games of skill

Games of skill are shown inside as gas station in Strasburg.

The fight around "games of skill" has reached the national stage -- with Pennsylvania as one of the battlegrounds -- as states grapple with how to handle the legally ambiguous slot-machine lookalikes cropping up in bars, gas stations and fraternal organizations throughout Lancaster County and across the nation.

National casino industry organizations, including tribal casino operators, are jumping into the fray surrounding unregulated games that they say fall into gray legal area because of "some cleverly exploited legal loophole," according to literature provided to lawmakers across the country last week by the American Gaming Association and the Association of Gaming Equipment Manufacturers.

And legislators are taking notice of the issue.

“Games of skill” are popping up "all over," said Sen. Scott Martin, R-Martic Township, in a Pennsylvania Lottery budget hearing last week.

Games of skill are slot-machine like games that are currently unregulated by the state. The games are distinct from video gaming terminals — dubbed VGTs by industry insiders — that were legalized as part of a 2017 expanded gambling law. (Almost all municipalities in Lancaster County have banned video gaming terminals).

"It behooves all of us under this dome, in this building, that we have to get a handle on some sort of solution when it comes to [games of skill]," Martin added.

National gaming industry

As one of the most regulated industries in the United States, the casino and gambling industry represented by the AGA and AGEM want states to crack down on these unregulated machines and for lawmakers to decide whether these skill machines should be legal and thus, regulated.

Until then, the national organizations say the "best practice" is for states to allow law enforcement to discipline venues with liquor or business licenses and operating unregulated machines by taking action against their licenses. They also suggest states allow law enforcement to seize unregistered machines, which Pennsylvania has done as the machines' legality is probed in court.

"We don't really want to reward this behavior," said Jess Feil, the senior director of government relations for the American Gaming Association. "We don't want to say, 'Just because you've been doing it without proper protections, doesn't mean it should continue.'"

In Pennsylvania, the machines often operate under the name "Pennsylvania Skill," with about 15,000 machines out on the market from that company alone and an unknown number of copy-cats, a spokesman for operator Pace-O-Matic previously told LNP | LancasterOnline. Pace-O-Matic has skill machines in about a dozen states, including states like Wyoming, Virginia and Texas, its spokesman Mike Barley said.

Pace-O-Matic and its Williamsport-based manufacturer Miele Amusements have been asking the state to regulate their machines -- at a rate about half of that of slot machines because they say their machines pay more to winners.

"We understand that there are groups that don't want to see competition and they're mostly from out of state," said Barley.

He said Pace-O-Matic operators are small businesses, who the gaming machine company wants to support.

“We have gone to the legislature and asked to be taxed,” Barley said. “They're not too many industries that do that."

Feil said the American Gaming Association and the Association of Gaming Equipment Manufacturers have teamed up in the past, and decided to do so this time around once their industries realized how much unregulated gaming devices were proliferating across the United States.

Pace-O-Matic insists their machines are not in a "gray area" that they are legal under Pennsylvania law, citing a 2014 Beaver County court decision.

But a challenge to games of skill is playing out in Commonwealth Court and the Pennsylvania Gaming Control Board is attempting to join the case. The agency wants to assert its control over the games of skill -- which they believe are illegal, according to court filings.

The Gaming Control Board has long kept itself out of the conversations around games of skill. However, a November ruling by the state’s Commonwealth Court prompted action by the agency, its director of communications Doug Harbach said.

In court filings last week, the Gaming Control Board said it was the most appropriate agency to  “regulate the entire field of slot machines in Pennsylvania and to eliminate opportunities for two classes of slot machines: those with player protections and fairness and those without.”