The Pennsylvania Supreme Court ruled that skill games are gambling devices subject to the state’s Gaming Act and Crimes Code, and it started a 120-day clock for lawmakers to pass a regulatory framework.
During that 120-day period, City & State PA reported that law enforcement was prohibited from taking action against skill game operators, but the end of the clock raised the prospect of a crackdown on an estimated 70,000 machines.
The policy debate quickly narrowed to taxes. Governor Josh Shapiro backed a 52% tax on gross terminal revenue from skill games, and his administration estimated the proposal would generate more than $2 billion annually.
Shapiro’s budget proposal for 2026-27 was $53.3 billion, with $4.5 billion drawn from the state’s Rainy Day Fund, according to Gaming America.
Other tax rates have been put forward as alternatives. Gaming America reported that Senate Republicans had previously backed a 35%–36% tax, while a senator with a district that includes a Pace-O-Matic facility sponsored a competing bill at a 16% tax rate.
City & State PA and Penn Capital-Star also described proposals that were not simply percentage-based. City & State PA said Senate Bill 1079 would create a $500 monthly fee per skill game terminal, limit terminals to 50,000, and generate an estimated $300 million in annual revenue.
In arguments opposing higher taxes, the casino industry has emphasized what it says it has lost. City & State PA quoted Parx Casino CEO Eric L. Hausler saying casinos pay more than 50% of their gross slot machine revenues in taxes, 34% of which funds property tax relief programs, and it said he argued skill games had drained more than $250 million in total casino gaming taxes from the state.
Others involved in skill games raised concerns that the 52% figure would be destabilizing. In reporting by Sun-Gazette, Nicole Miele said the 52% tax rate would “kill the industry” and harm small businesses and fraternal clubs the games support, while Mike Barley said the 52% was “not a rate to allow us to sustain our model” because operators share revenue.
Public pressure also sharpened the moment. Penn Capital-Star reported that hundreds of veterans, volunteer firefighters, and small business owners rallied on the Pennsylvania Capitol steps in Harrisburg on Tuesday opposing taxing skill games like casino slot machines, while City & State PA reported that about 350 people rallied on Wednesday urging a skill games solution that included regulating and taxing the machines.
Support for regulation and taxation also showed up in polling. As Armchair Lehigh Valley reported, a Franklin & Marshall College poll found 71% of Pennsylvania voters favored regulating and taxing skill games, based on a survey of 546 registered voters conducted June 8–14.
Lawmakers will now be pressing to meet the 120-day deadline created by the court ruling to pass a regulatory framework.
