Unregulated Skill Machine Battle Moves to Pennsylvania

It's not something that's impacting our best sports betting sites or our best real money online casinos, but there's a real battle raging nationwide concerning what providers are calling "skill games." 

The newest battleground: Pennsylvania. 

Residents of the Keystone State have had access to brick-and-mortar casinos and PA online casinos for a number of years. But unregulated "skill games" are becoming more commonplace, and those contests are an issue for individual states and the American Gaming Association (AGA). 

Skill games? 

Calling them skill games is a bit misleading, really. 

The Michigan Gaming Control Board has recently defended its enforcement of the machines, stating "...that the machines in question have been played and/or examined by investigators and determined to be casino-style slot machines for which winning depends on chance.”

There are reportedly more than 600,000 of the machines operating in the nation, and it's believed those units account for 40% of all legal and illegal gambling machines. 

While the units usually resemble slot machines, players are required to do things like solving puzzles. Winners are often paid out with gift cards or items in an effort to circumvent gambling laws. 

The machines are frequently found in places like gas stations and bars as opposed to formal casino grounds, where they would be regulated. Proponents say the machines help drive business, and major supplier Pennsylvania Skill says that it's not a gambling entity. 

Opposition

Naturally, any non-regulated entity that generates a reported $27 billion in revenue will face some opponents. 

Gambling stakeholders, including some of the Pennsylvania sports betting scene that also operate mobile casino apps, and the AGA, have been making an effort to battle the unregulated machines in the state.   

Covers reports that there are concerns from an NCLGS panel of regulated gaming stakeholders, who say that unfair odds and bad gameplay experiences dissuade would-be customers from the regulated market.

A number of years ago, AGA president Bill Miller was already drawing attention to the issue.

"Keeping America’s gaming industry strong, safe, and responsible can only be done through the robust infrastructure of the well-established legal market, not by rewarding bad actors with half-measures that fail to address the dangers of unregulated gambling,” he said.

What's next?

A case before the Pennsylvania courts could help settle some of the issues at hand. A lower court ruled previously that the games were indeed games of skill, but the state's attorney general's office is appealing that ruling. In June, the Pennsylvania Supreme Court agreed to hear the arguments. 

The outcome could have major implications within the state, where regulated casinos pay 50% taxes on slot revenues. Should skill game operators become regulated, they have been pushing for a 20% rate.

Casinos, naturally, do not want to see these machines legalized and regulated. As Penn Entertainment's Jeff Morris stated, the states should “rely on the industry that has reliably generated millions of dollars here for the Commonwealth, and work with companies that want to actually work within the law and not outside the law.”