Slot-like games found all over Pennsylvania may soon be legal, but do they do more harm or good?

Pennsylvania Politics

HARRISBURG, Pa. (WHTM) — Those slot machine-like games that have popped up in bars, restaurants, and convenience stores may soon be legal.

Pa. skills games have operated in legal limbo for years. But on Wednesday, abc 27 has learned Senator Gene Yaw of Williamsport will introduce a bill to legalize and tax them. On Tuesday, the company behind the machines threw a party at the Federal Tap House in Harrisburg.

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Critics say if this happens, it will take revenue away from the lottery and casinos which paid a lot of money for their licenses. Somebody put a sign outside the party that called the games illegal, untaxed, unregulated, and dangerous.

Ryan Sprankle of Sprankle’s Markets in western Pa. says Pennsylvania Skill Games have helped his family, his employees, and his community. “Our charitable donations? Low-margin business, so it was tough to give a lot to people who needed it,” Sprankle said.

He also says they’ve tripled their charitable donations since getting the machines. So what’s not to like? Plenty, says State Senator Tommy Tomlinson of Bucks County. “They’ve been running an illegal operation for years. And now, to say forgive me, we want to be legal is, I think, hypocritical. It’s almost an insult,” Tomlinson said.

Tomlinson is talking about the proposal by Senator Yaw. Yaw assures that these games will be above board. “I want to make sure there’s accountability for these legal skill games. Along with, guess what? Ample taxes,” Yaw said.

How ample? An unfinalized draft we saw of the plan suggests a tax rate of 16% similar to table games but much less than the 54% tax on slots. The Pa. lottery tells us the skill machines have siphoned $500 million in sales, and thus lots of services for Pa. Senators.

Penn National Gaming tells us Senator Yaw’s proposal would “reward bad actors.” Senator Tomlinson says putting the machines in place before a law isn’t the right way to do things. “You spend time convincing people. You work with Democrats, Republicans,” Tomlinson said.

Penn National released the following statement in response to skill games:

Penn National continues to oppose the proliferation of slot machines on every Main Street throughout the Commonwealth.  This includes legislation that would reward bad actors who have been operating illegally for many years, attracting serious criminal acts and other negative activity that is not welcome near schools, community centers, and houses of worship.  The General Assembly has rejected this type of careless gaming expansion in the past and we urge them to continue their cautious and pragmatic approach to protect consumers and keep slot machines in highly regulated environments that maintain multiple layers of security and responsible gaming safeguards.

Jeff Morris, Vice President, Public Affairs & Government Relations Penn National Gaming Inc.

The Pennsylvania Lottery also released a statement in response:

The illegal gambling machines that are marketed as so-called “skill machines” continue to cause significant harm to the Pennsylvania Lottery and the older Pennsylvanians who rely upon the critical programs the Lottery funds. Since the fall of 2017, we estimate these machines have cost the Lottery more than $500 million in lost sales, which means that there has been less money available to provide our seniors with rebates on property taxes and rent, low-cost prescription assistance, free and reduced-fare rides, and other important services. As of today, these illegal machines are in more than 30 percent of the Lottery’s network of roughly 9,900 retailers. For context, at this time three years ago, that number was approximately eight percent. Because of this growth, we know there is the potential for hundreds of millions of dollars in additional future harm if these machines are legalized and remain a competitor to the Lottery in the retail environment. These illegal gambling machines also drain revenue available for local school property tax relief that is generated from the state’s 55 percent tax on slots at the state’s licensed casino. This creates the risk that homeowners could see their property taxes increase due to this bill. Finally, it’s important to understand it was only roughly four years ago in 2017 when the General Assembly authorized the most recent gambling expansion bill. Because many of the new gaming options authorized by this legislation are very new or are still being rolled out, we don’t yet know how all of this additional gaming has impacted the funding available for all of the seniors, economic development and community improvement programs it helps to fund. As a result, it would be irresponsible and reckless to approve any additional gaming before we understand the impact of the prior expansion. Doing so may very well hurt the Lottery and other gaming options, including the legal and licensed slot machines that play an integral role in funding property tax relief for Pennsylvanians.

Ewa Swope, Press Secretary, Pennsylvania Lottery

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