Governor Josh Shapiro proposed taxing skill games as a new source of state revenue in his budget address. Recently though, Senate Republicans said the policy is probably off the table for budget negotiations.

Over the past few years, ‘skill games’ have taken communities by storm.The gambling devices are similar to slot machines, but in addition to trying to match spinning icons— random games that require skill will pop up. These in turn can increase a players chances at winning.

Right now, skill games are unregulated and untaxed.

In 2023, the Commonwealth Court ruled in two separate cases that the games did reward skill, compared to slot machines that rely solely on chance. Because of the skill factor, the Court said the games were legal and did not have to abide by slot machine regulations.

In March, the Pennsylvania Supreme Court dismissed an appeal to the Commonwealth Court ruling on the company Banilla in March. However, they accepted an appeal to the ruling on the company Pace-O-Matic in the end of June.

This has left the new gambling fad in a legally grey area; while it continues to operate in communities with no restrictions.

Advocates for skill games say they give small businesses another revenue source— including groups like VFWs, American Legions and volunteer fire companies. Mike Barley, chief information officer for Pace-O-Matic estimates that a machine can average $20,000 in revenue for a business; as they keep around 40% of the profits.

But the machines are also in places like gas stations and convenience stores. State police say they have seen spikes of crimes in locations with skill games. Critics say the locations have lead to kids playing due to easy access.

This public safety component has lead to some law makers wanting to completely ban the games; similar to at least 5 other states.

However, both critics and advocates agree the games can be regulated into safety and harnessed as a revenue source: In contrast, they remain at odds on how far the regulations should go to return the public to peace.

“There is no reporting, there's no surveillance, no state police footprint there. Nobody has any idea of the number of crimes that have been driven by skill games,” said Pete Shelly, spokesperson for Parks Casino. The casino industry, which operates slot machines under heavy regulation and taxation, want skill games to be held to a similar standard. “They should not be allowed in any other location other than age restricted, I think.”

Parks Casino is also advocating the games be regulated under the authority of the Gaming Control Board.

Skill game businesses have lobbied to be under the authority of the Department of Revenue— maintaining that while restrictions are needed, they do not have to be heavy handed.

"I think, to act as if convenience stores aren't really selling restricted products— they have lottery, they have alcohol in many of them now. They have cigarettes; things that we've deemed very dangerous,” said Barley. "And we control them and make sure that people are being carded. Similar with skill games. To say that small businesses cannot handle that, to me is disrespectful."

Past disagreements on safety regulations and who should govern those regulations— there is indecisiveness on how much skill games should be taxed. Slot machines have a 54% tax. Skill game advocates want the tax to be 16%, matching the tax on other games of skill like cards.