By Peter Hall | Pennsylvania Capital-Star
If a slot machine gives skillful players the ability to win every time, is it illegal under Pennsylvania’s Crimes Code and Gaming Law?
That was the question the state Supreme Court set out to answer Thursday in a pair of appeals by the commonwealth’s attorney general’s office and Department of Revenue.
“This court has been very clear,” Senior Deputy Attorney General Susan Affronti told the justices. “Gambling is the hope of gaining something beyond the amount played, and that’s what creates the dangers associated with gambling.”
The court has said in the past that a single feature, such as the memory game included in leading maker Pace-O-Matic’s Pennsylvania Skill games, can’t change the fundamental nature of a gambling device, Affronti, who argued for the attorney general’s office, added.
Rather, a game’s maker must show that skill is a predominant aspect of the game, and in Pennsylvania Skill Games, the skill element is difficult, tedious and completely optional. Many players, Affronti claimed, skip it to continue betting in hopes of winning a jackpot.
But how people play the game isn’t a workable way to determine whether it’s illegal, attorney Matthew Haverstick argued. He represented Capital Vending Co., that was charged after a 2019 state police raid on Champion Sports Bar in Highspire, Dauphin County, where it had provided skill games.
Haverstick said both his clients and the commonwealth agree the correct standard, established by the court more than 40 years ago, is whether skill is the predominant factor in whether a player wins or loses.
And Pace-O-Matic’s games allow players who lose the slot machine-style bet to win back their money plus 5%, Haverstick said. They just have to be good enough at remembering and repeating an increasingly complicated pattern of colors that one attorney involved in the case compared to the 1980s electronic game Simon.
Haverstick also argued Pace-O-Matic’s games fall outside of the definition of slot machines set by the state Gaming Control Board.
“When you look at the regs the Gaming Control Board sets what a slot machine … has to pay out,” he said, noting that the requirement is a return of between 85% and 100%. Pennsylvania Skill games allow players to win back up to 105%. “It can never be a game or slot machine rather, as defined under that statute.”
The state agencies are challenging lower court rulings that neither the Gaming Law or the Criminal Code apply to skill games. The devices, which look like casino video slot machines, have become fixtures in corner stores, gas stations and social clubs in a billion dollar industry that developed since a Beaver County judge first ruled they’re not illegal in 2014.
The commonwealth never appealed that decision and every court that has examined Pace-O-Matic’s devices, has determined they are legally games of skill, according to the Georgia-based company.
In recent years, however, state lawmakers have undertaken efforts to pass legislation that would regulate and tax the skill game industry or ban the machines completely. Proposals during budget negotiations this year devolved into infighting among state Senate Republicans over the rate. Proposals ranged from Gov. Josh Shapiro’s call for 52%, which is the rate casinos pay, to 16%, favored by Sen. Gene Yaw (R-Lycoming), whose district is home to the company that builds Pennsylvania Skill machines.
Jason Levine, who filed an amicus brief on behalf of a majority of the state’s 17 casinos, said the skill game question is important to casino owners, who say they lose business because of the devices. But he said it’s a crucially important question for the commonwealth and Pennsylvanians who benefit from the taxes casinos pay on slot machine revenue.
Under the Gaming Law, in addition to supporting the horse racing industry and the state property tax relief fund, gaming revenue goes toward state government and local governments.
“The thing that all of the parties can hopefully agree on is that clarity is needed from the Supreme Court as to what is a slot machine and what is a gambling device.”
The justices on Thursday questioned how often players use the skill element to attempt to recoup their money. Affronti said the machines deliver a win 8% of the time and the rest of the time players have the ability to go on to the skill section, but only if they touch a button marked “follow me.”
“It’s not explained,” Affronti said. “It’s not telling you ‘press this button to use skill.’ … There’s no suggestion that’s a way to win your money back. The only way you discover that is if you, for some reason, touch there and then, and only then is the skill game explained.”
Justice Christine Donohue asked Affronti whether it’s legal to give people the opportunity to gamble.
“They can walk into an establishment and never intend to play ‘follow me.’ Just continue to put money into the machine and pull it and pull it and pull it … with the hope that their gamble will pay off and they will get the jackpot,” Donohue said.
Affronti agreed, adding that is why the court must identify the predominant aspect of the game.
“What is the game really about?” Affronti asked “This isn’t a game of Whac-a-Mole. This isn’t a game of Skee-Ball. This is a slot machine.”
Pennsylvania Capital-Star is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Pennsylvania Capital-Star maintains editorial independence. Contact Editor Tim Lambert for questions: info@penncapital-star.com.
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