Pennsylvania Governor Wants to Tax Skill Games at 52%
Pennsylvania Governor Josh Shapiro has unveiled a state budget proposal that includes a 52% tax on skill-based gaming devices.
LISTEN TO THIS ARTICLE:According to the governor, there are 70,000 unregulated skill game terminals across Pennsylvania, and he aims to regulate and tax these terminals to generate revenue for the state. The tax is expected to rake in $360 million in revenue, which will help fund the governor’s $48.3 billion budget proposal.
In his FY 2025/2026 budget address on Tuesday, Governor Shapiro also proposed giving the Pennsylvania Gaming Control Board (PGCB) full authority to decide which businesses can operate skill-based gaming devices.
Resistance from State Lawmakers
However, the governor's proposal has sparked backlash from fellow state officials. One of them is Senator Gene Yaw, who dismissed the plan with amusement, stating he “almost laughed” at the idea. He also announced plans to introduce a competing bill with a lower tax rate of 16% on skill gaming devices.
He also argued that skill-based games are essential to the livelihood of small businesses in Pennsylvania and should not be subjected to similar tax rates as PA online casinos.
Senator Yaw also opposed the governor’s plan to make the PGCB the regulator of skill game machines, arguing that the Department of Revenue should be responsible for determining where the gaming devices are installed.
The senator expressed concerns that the PGCB is overly friendly with casinos, leading to a biased stance against skill-based games.
More Regulation News
Regulatory Gray Area for Skill Games
While skill games look like video slot machines, manufacturers and the courts have consistently ruled that player winnings are based on skill rather than chance. Due to this key difference, Pennsylvania courts have ruled that skill games are exempt from the state's Gaming Act, and are not bound by the same regulatory and tax requirements as traditional slot machines.
The machines, which can be found in various venues such as bars, gas stations, convenience stores, and fraternal bars, continue to be a highly contested topic among state lawmakers.
While small business owners praise skill games as a vital source of extra income, the casino industry strongly opposes its regulation, and public safety advocates warn that the unregulated games may fuel crime and exacerbate addiction problems across Pennsylvania.
Manufacturers of the games support the taxation and regulation of the machines as it could deliver a welcome revenue boost to Pennsylvania. However, they seek a lower tax rate to ease the financial strain on small businesses in the state.
RELATED TOPICS: Regulation
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