Pennsylvania Supreme Court Declines To Consider Skill-Games Appeal

March 27, 2024
The Pennsylvania Supreme Court has decided not to hear an appeal from state officials contesting the legality of so-called skill-game devices, leaving in place one of several lower court rulings that have found the controversial machines are not illegal gambling.

The Pennsylvania Supreme Court has decided not to hear an appeal from state officials contesting the legality of so-called skill-game devices, leaving in place one of several lower court rulings that have found the controversial machines are not illegal gambling.

The decision allows Banilla Games terminals to remain in operation in Pennsylvania.

In 2019 and 2020, the state's Bureau of Liquor Control Enforcement (BCLE) raided several licensed stores and seized 11 electronic skill games, ten of which were owned by Pinnacle Amusement and manufactured by Banilla Games.

Pinnacle Amusement filed motions for the return of its skill-game machines in the Luzerne County Court of Common Pleas and in other local courts where its machines had been seized. In 2022, the county court ruled that the skill-game machines did not constitute gambling devices and ordered the return of all of Pinnacle Amusement's machines.

The BCLE appealed that decision to the Commonwealth Court, which affirmed the trial court's decision. The BCLE, which is a division of the state police, then appealed again to the state's Supreme Court, which denied that petition in a two-page order dated March 19 without elaborating on its reasons for doing so.

Currently, there are an estimated 80,000 skill-game devices operating in convenience stores, bars and other non-casino locations in Pennsylvania.

Pace-O-Matic is arguably the most prominent manufacturer of so-called Pennsylvania Skill machines that are distributed throughout the state, and Mike Barley, a company spokesman, said that the machines “have been deemed legal by several courts, including a unanimous Commonwealth Court last November.”

In that decision, the court deemed the Pace-O-Matic's machines to be a game of predominant skill, not a game of chance. 

“The POM machines at issue in this case are not slot machines as commonly defined,” wrote Commonwealth Court Judge Lori Dumas. “Accordingly, these electronic games are not illegal per se.”

Dumas also said that “POM machines are not gambling devices and, therefore, do not constitute derivative contraband.” She wrote that the court's judges “discern no legal error in the trial court’s determination that the POM machines are primarily games of skill, and thus, not gambling devices.”

The closely watched Pace-O-Matic case stems from agents with the Pennsylvania State Police and BCLE in 2019 seizing three POM machines, a green bag containing $525, and seven receipts from a sports bar in Dauphin County.

An appeal in that case is still pending with the state's Supreme Court and is separate to that of the Banilla Games machines.

Lawsuit Seeks To Block Philadelphia Ban

In a separate legal development regarding skill-game machines in Pennsylvania, a skill-games distributor and a convenience store owner have sued to block new legislation approved by the Philadelphia City Council banning so-called skill games from most businesses within the state's largest city.

A Pace-O-Matic spokesman confirmed the appeal's filing on Monday (March 25).

The Philadelphia City Council unanimously approved legislation on Thursday to ban businesses from having the machines unless they also have a casino or liquor license. Any business would also have an area for at least 30 people to eat or drink.

Exempted locations, such as bars and taverns, would be limited to no more than five machines.

“It is not a perfect bill, and we are open to continued conversations with people to make it a better bill,” councilmember Curtis Jones Jr. said following passage of the legislation on Thursday.

“What I will note is that in 2017 the door got opened for these machines to be dropped into our neighborhoods and we have been waiting for help from Harrisburg,” Jones said. “And I believe that by passing this bill it will incentivize our colleagues at the state level to finally take this on and do something on behalf of Philadelphia.”

Shortly after the council vote, G&B Amusements, a Pennsylvania distributor for Pace-O-Matic, and Tariq Jahil, a 7-Eleven franchisee based in South Philadelphia, filed a lawsuit with the Court of Common Pleas arguing the council overstepped its authority by approving the ban.

According to media reports, the lawsuit also contends the ordinance unfairly targets skill games and disrupts a legal contract. Pace-O-Matic expects more businesses to join the lawsuit soon. 

Barring a court injunction, the law will go into effect immediately if and when Mayor Cherelle Parker signs the ordinance. Messages left with the mayor’s office Tuesday (March 26) were not returned.

“We are alarmed that the Philadelphia City Council would pass a measure that will only hurt small family-owned businesses while doing nothing to curb crime,” Barley of Pace-O-Matic said in a statement emailed to Vixio GamblingCompliance.

“We urge Mayor Parker not to sign this dangerous ban and instead to wait for pending state legislation, supported by the governor and bipartisan members of the legislature, to pass.”

Barley said because of this ordinance, the company had no choice but to take legal action to protect the interests of Philadelphia business owners.

The issue of whether to regulate and tax skill-game machines remains under consideration by state lawmakers in Harrisburg.

Democratic Governor Josh Shapiro has tried to lobby lawmakers to pass a measure by proposing a 42 percent tax on the machines in his fiscal year 2024-2025 budget proposal released last month.

Currently, Senate Bill 706 and House Bill 2075 have been introduced to regulate and tax skill games, while Senate Bill 969, sponsored by Senator Amanda Cappelletti, a Democrat, would affirmatively ban the machines.

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