The Pennsylvania Supreme Court has ruled, in a 5-2 decision, that “skill games” are legally considered slot machines and must comply with the commonwealth’s gambling and crime statutes. The decision ends a multi-year legal battle over the devices, which have spread by the tens of thousands across gas stations, convenience stores, and neighborhood taverns. The court issued a 120-day stay on enforcement, giving the General Assembly a four-month window to formally regulate and tax the industry. Writing for the majority in a 66-page opinion, Justice David Wecht found that lower appellate courts had relied on “deeply flawed” interpretations of state law when they previously categorized the machines as legal.
The devices visually resemble digital slot machines but feature a secondary memory or matching puzzle. Manufacturers including Pace-O-Matic had argued that because a patient or highly skilled player could technically win every time, the machines qualified as games of skill rather than chance. The Supreme Court rejected that reasoning, with Justice Wecht pointing to a 2017 update to the state’s Gaming Act that integrated terms such as “skill slot machine” and “hybrid slot machine” into its definitions. “Our General Assembly already has spoken clearly on this subject… making abundantly clear that the ‘skill’ element of the subject devices is not legally significant,” Wecht wrote. “It is not this Court that declares ‘skill games’ to be unlawful. Rather, it is the General Assembly that did so nearly a decade ago.”
The Office of Attorney General had argued that embedding an element of so-called skill into the games does not exempt the devices from Pennsylvania gambling laws. “Today’s ruling is a significant victory for consumers, taxpayers and the rule of law in Pennsylvania,” Attorney General Sunday said. Sunday added that the Supreme Court recognized what his office had argued from the beginning, that the machines operate as gambling devices and cannot legally exist without the same oversight, regulation, and accountability as other forms of legalized gaming in the commonwealth. He also said Pennsylvanians deserve protections that ensure games are fair, transparent, and operated within the bounds of the law. The ruling benefits Pennsylvania’s heavily regulated and taxed casino industry, which faces a roughly 54% tax rate on traditional slot machine revenue, alongside the Pennsylvania Lottery.
Lawmakers in Harrisburg have previously floated proposals to tax and regulate the estimated 70,000 to 80,000 skill games scattered across the commonwealth. The Supreme Court’s stay gives the General Assembly 120 days to enact a regulatory and tax framework. If lawmakers fail to pass a regulatory framework within the four-month window, law enforcement will have full legal authority to begin seizing the machines statewide.