Supreme Court reverses previous ruling, 70,000 machines banned

By Kate Northrop

After a lengthy legal decision, the Pennsylvania Supreme Court has ruled that skill games are no different than slot machines and are therefore outlawed.

Skill game machines are on their way out in Pennsylvania with the Supreme Court ruling determining they are illegal and unregulated machines under the state law.

For several years now, the presence of skill games in local establishments across Pennsylvania has been a topic of hot debate. They are physical games with the look and feel of slot machines housed in regulated casinos, except, manufacturers say, it requires an element of human input and skill to operate them.

It's that argument that has had legislators going back and forth with skill game manufacturers in a dispute over whether skill games are just unregulated gambling machines in disguise.

It then makes sense that state legislators, casino operators, and the Pennsylvania Lottery would rally against the proliferation of such machines in local businesses, especially since they have caused the Lottery to lose $200 million in revenue over the past five years, Governor Josh Shapiro said. Not only are they placed in prime retailer spots such as bars, restaurants, and convenience stores that make them prime competitors for lottery products, they operate untaxed.

If skill game machines were taxed, the Independent Fiscal Office estimates that they could generate more than $420 million in tax revenue by 2028 or 2029.

Casinos were removing their own slot machines from their floors as a result of skill games eating into their would-be profits. The attorney general's office estimates that there are approximately 70,000 skill game machines operating in Pennsylvania — far more than double the 24,800 slot machines in operation across all state-regulated casinos, according to the Pennsylvania Gaming Control Board.

In 2023, the Pennsylvania Commonwealth Court had decided that skill games were legal in the state of Pennsylvania, much to the disappointment of online and retail casinos. The decision came down to a matter of definition, which was that skill games are technically not the same as slot machines and are therefore not considered illegal, per se.

When the case escalated to the Pennsylvania Supreme Court, the decision was turned on its head.

In his ruling, Justice David Wecht said that the legal reasoning used in the earlier ruling was "deeply flawed," and that skill games do, in fact, meet the legal definition of slot machines.

The distinction had to do with the interpretation of real skill versus chance. Embedding an element of "so-called skill" into the games is not enough to exempt them from state law, he explained.

"Today's ruling is a significant victory for consumers, taxpayers and the rule of law in Pennsylvania," Attorney General Sunday said in a press release. "The Supreme Court recognized what our office has argued from the beginning — these machines operate as gambling devices and cannot legally exist without the same oversight, regulation and accountability as other forms of legalized gaming in the Commonwealth. Pennsylvanians deserve protections that ensure games are fair, transparent and operated within the bounds of the law."

The court issued a 120-day stay for its ruling, which means that the decision is final and will take legal effect after 120 days. Police and regulators cannot seize machines, cite businesses, or act on the ruling until that window closes.