May 19 – WILKES-BARRE – State Representative. Eddie Day Pashinski this week said there was a time when Pennsylvania restricted casinos and gambling and the state lost billions of Pennsylvania dollars to New Jersey.
“Gambling, drinking, smoking are part of our lives whether we like it or not,” said Pashinski, D-Wilkes-Barre. “So let’s regulate it fairly. Make sure this industry gives the players a fair chance to win and create a fair return on the people’s investments – back to the people in property tax cuts and improvement grants for countless needs. “
The issue of legalizing, regulating and taxing games of skill is certainly a hot topic. Area lawmakers — those willing to comment — outlined their thoughts on how to approach the issue.
Commenters included: Pashinski, D-Wilkes-Barre; Rep. Jim Schelvis, D-Pittston Township; Rep. Mike Cabell, R-Butler County; Rep. Aaron Kaufer, R-Kingston; and Sen. Marty Flynn, D-Scranton.
Sen. Lisa Baker, R-Lehman Township, declined comment, saying she expects the issue to be part of the overall budget negotiations. Rep. Alec Ryncavage, R-Plymouth, also did not respond.
In Governor Shapiro’s proposed budget
According to City & State Pennsylvania, a multimedia news organization that devotes its coverage to Pennsylvania state and local government, including all things political and public policy:
—Shapiro’s budget proposal takes into account estimated revenues from the potential legalization of so-called skill games, which are video gaming machines that currently fall into a legal gray area as courts have ruled that the games are currently outside the jurisdiction of the Pennsylvania Gaming Control Board. .
– Revenue estimates from the Shapiro administration suggest that a 42% tax on daily skill gaming revenues could generate $150 million in revenue in the 2024-2025 fiscal year. The estimate assumes that the new framework and tax will come into effect on July 1, 2024.
– The legalization of skill games is an issue that has generated bipartisan support in the General Assembly, and there could be a willingness in the legislature to regulate the games.
The legislators
Rep. Haddock said there are many makers of skill games, or very similar games. He said at least two majority manufacturers have been taken to court to say they are currently legal.
“However, many other manufacturers have machines that are not legal,” Haddock said. “These games are flooding our state. This problem is growing exponentially every day – by some estimates we have between 60,000 and 300,000 machines in the state.”
This issue of regulation is not new to the state. He said Pennsylvania history shows there were “one-armed bandits and joker poker” type machines.
“Ultimately the state regulated these machines,” Haddock said. “Modern games of skill are different: they are just a different type of gambling device. Paying out for paying out is gambling.”
Regarding taxes, Haddock said all other forms of gambling are taxed and regulated in Pennsylvania. He said some of this money is then used for gambling education and treatment.
“The money from gambling regulation has been used for a host of other good programs and issues for people of the state – from tax credits, senior programs to economic development grants for cities, towns, townships and a host of nonprofits. Haddock said. “Unregulated gaming machines and the associated issues need to be addressed.”
Haddock said some people in Harrisburg would like to see games of skill banned.
“I know that the cut to skill games helps support VFWs, American Legions, volunteer fire companies and other fraternal groups and as such I will not vote to eliminate them,” he said.
Rep. Pashinski said he always looks for balance and fairness to guide his decisions whenever possible.
“I believe that games of skill play a role in our social structure, but I expect that the operation of those machines should be regulated to give players a fair chance to win and that those machines contribute in a similar way to our casino operations ,” Pashinski said. .
He also said the amount to be taxed is subject to negotiation and a decision can be made once all the figures are verified.
“I also believe that the Gaming Board should monitor these machines,” Pashinski said. “They are the experts, they understand the operation, the system, the process and they have over 20 years of experience managing this highly successful business, making the Gaming Council an obvious choice to put the right regulations and procedures in place evaluate and incorporate to provide a profitable business.” system for the benefit of business, the state and the people.”
Pashinski said skill games do not contribute money to property tax credits as casinos do, they do not contribute to compulsive gambling programs and they do not pay local stock taxes as casinos do.
“These dollars have improved the lives of millions of Pennsylvanians and taxing and regulating our games of skill will generate new dollars for mental health care, compulsive gambling, property tax reductions and countless other needs in our commonwealth,” he said.
Rep. Cabell said games of skill remain a complex topic, including how they impact other gaming revenues and the determination of a tax structure.
“Lawmakers must take a balanced approach as they debate and determine the legislative solution to this issue,” Cabell said.
In 2023, Cabell said the Commonwealth Court of Pennsylvania ruled that games of skill do not constitute illegal gambling – in line with a lower court ruling. He said the Pennsylvania Supreme Court declined to review a decision allowing games of skill.
“Should they be regulated? Should they be taxed? These are both questions that members of the General Assembly can introduce and pass legislation to determine,” Cabell said.
Cabell said his colleagues have introduced several legislative proposals to address this problem, including:
—SB 706 (Yaw) would regulate and establish an additional tax on skill video games in Pennsylvania. The bill is before the Senate Committee on Community, Economic and Recreational Development (May 26, 2023).
—SB 969 (Cappelletti) would add “skill games” to the list of illegal gambling devices, banning their use throughout the Commonwealth. The bill is before the Senate Judiciary Committee (November 16, 2023).
—HB 2075 would impose a 16% tax on skill video games and place skill games under the supervision of the Treasury Department. The bill is before the House Gaming Oversight Committee (February 28, 2024).
—HB 2042 (Dunbar) would regulate and establish an additional tax on skill video games in Pennsylvania, mirroring the tax imposed on VGTs. The bill is before the House Gaming Oversight Committee (February 20, 2024).
—SB 1142 would create a gaming license for establishments that serve alcohol and allow casino slot machines, VGTs or games of skill to be placed in these establishments. The bill will also license, regulate and tax games of skill. . The bill is before the Senate Committee on Community, Economic and Recreational Development (April 5, 2024).
Meanwhile, Cabell said during the unveiling of his budget proposal that Governor Shapiro proposed a 42% tax on skilled gaming.
Cabell said oversight is also a complex issue.
“At this point, the answer is unknown: some want the Department of Revenue to provide oversight, while others want to give that authority to the PA Gaming Control Board,” Cabell said. “This is once again an issue that will be debated and deliberated upon by lawmakers.”
Cabell said there is no uniform or agreed upon way to oversee, regulate or tax the skill gaming industry.
“I look forward to having the opportunity to debate this complex issue in the coming weeks and months,” Cabell said.
Senator Flynn said he believes games of skill should be subject to taxation, regulation and oversight to ensure responsible business operations and protect consumers.
“Especially given the current scenario where this industry operates as an untaxed black market, estimated at approximately $1 billion per year,” Flynn said. “While they may remain legal, their impact on society must be carefully considered. Regulation is essential to maintain fairness and transparency, while taxation can raise revenue and deter harmful behavior.”
Flynn said the oversight should involve government agencies and industry stakeholders working together to address evolving challenges and promote responsible gaming.
Representative Kaufer said the issues surrounding games of skill are very complex and nuanced.
“These games have been discussed for many years while still being available in our community,” Kaufer said. “This discussion requires a lot of thought, including the regulating entity, what the tax rate will be, where they might be located, who will enforce the law and what can be done to improve destination gambling, along with such a package of legislation.
“There are different levels of legislation that require much more consensus building.”
Reach Bill O’Boyle at 570-991-6118 or on Twitter @TLBillOBoyle.
