By Sen. Gene Yaw (R-23)
For the past five years, I have worked closely with Pennsylvania’s small businesses, veterans’ organizations and the skill game industry to craft a fair and balanced solution for the regulation and taxation of legal skill games. The result is Senate Bill 626 – a proposal that protects organizations that rely on skill games from crushing taxes, ensures proper regulation by the commonwealth and provides law enforcement with tools to combat illegal gambling.
Senate Bill 626 has incredibly broad support, as taverns, convenience stores, social clubs and veterans’ organizations all recognize the importance of these games. Skill games provide crucial supplemental income to these establishments. They are not slot machines.
Eleven court decisions, including a unanimous decision by the Commonwealth Court, have confirmed that skill games are legal and fall outside the jurisdiction of the Pennsylvania Gaming Control Board. The difference is clear. In a skill game, the player’s decisions and mental acuity determine the outcome. Slot machines, on the other hand, are controlled entirely by chance through preprogrammed algorithms.
Despite this well-established legal precedent, other proposals are advancing in the Senate. Backed by the powerful casino industry, these proposals would effectively kill the skill game industry with a three-part strategy.
The first is excessive taxation. Senate Bill 626 proposes a 16% tax rate, consistent with that of table games. The other proposals call for tax rates as high as 35% or 52%. While these higher rates may sound attractive from a revenue perspective, they ignore the structure of the industry.
Hundreds of small businesses, manufacturers, operators and distributors make up the supply chain. If nearly all the revenue is taken through taxes, there will be nothing left for those businesses to survive. The projected windfall in tax revenue will never materialize because the industry itself will disappear. For more than a century, the warning has rung true: the power to tax is the power to destroy. The other leading Senate proposal is a dangerous example.
The second issue is overregulation. Other proposals misclassify skill games as gambling devices and impose burdensome operational requirements. For example, they would require businesses to isolate the games and manage them as separate operations. This approach completely ignores the role skill games play in helping small businesses remain open. Senate Bill 626 recognizes that these games are meant to provide supplemental income and are part of the local community. They are not part of the corporate casino conglomerate.
If the first two strategies don’t succeed in eliminating skill games, the third likely will. The other proposals place regulatory authority in the hands of the Pennsylvania Gaming Control Board. This agency has openly opposed skill games for more than a decade. It has even attempted to block license applications from businesses that previously housed skill games, until the Pennsylvania Supreme Court ruled such practices illegal. With this record, the Gaming Control Board cannot be trusted to be an impartial regulator.
These efforts to eliminate skill games would have far-reaching consequences. Veterans’ posts, local clubs and small businesses across the state rely on this income to stay open and serve their communities. Without it, many will struggle, and some won’t survive at all.
Some lawmakers have expressed frustration at the number of constituents reaching out in support of skill games. This is exactly how our system is supposed to work. When citizens raise their voices and engage with their elected officials, it is a sign that democracy is alive and well.
Ignoring court rulings, overburdening small businesses and handing control over to a biased regulator is not responsible governance. It is a coordinated effort to kill an industry that helps veterans’ posts keep their doors open and allows small businesses to survive. If the goal is killing skill, this is certainly the way. But make no mistake, Pennsylvania communities will pay the price.
Sen. Gene Yaw was elected to represent the 23rd Senatorial District consisting of Bradford, Lycoming, Sullivan, Tioga and Union counties.
CONTACT:
Elizabeth Weitzel
717-787-3280