Over the past decade, skill games have become an increasingly popular form of entertainment.
The interactive machines can be found at convenient stores, restaurants, bars, American Legions and even volunteer fire companies all over the commonwealth, where they provide supplemental income to small businesses and organizations.
At first glance, these digital gaming devices might look an awful lot like slot machines you’d find at a casino, but there is one key difference: Skill games require, well, skill.
Unlike slot machines or lottery tickets, in which a player’s ability to win relies solely on chance, skill games require the player to make strategic decisions based on talent and technique that ultimately determine the outcome of the game.
Because of this, skill games are not considered gambling and are not subject to regulations under the state Gaming Control Board.
The age requirements are different, too — you only have to be 18 to play a skill game.
Pace-O-Matic, a prominent software designer of skill games in Pennsylvania, has defended the legality of its product in court several times beginning in 2014, when the company introduced the games into the state, and the Court of Common Pleas of Beaver County ruled that the game was considered legal under Pennsylvania law.
The legality of skill games was reaffirmed again last year, when Pennsylvania’s Commonwealth Court unanimously ruled that Pace-O-Matic’s Pennsylvania Skill game is a legal game of skill in the state.
Even so, the debate over skill games has continued, with some local and state officials expressing concern that if the games continue to be unregulated, it will make it easier for businesses to operate illegal slot machines masquerading as skill games.
Several cities in the state such as Old Forge and Philadelphia have even instituted a ban against games of skill that Pace-O-Matic is currently fighting in court.
In this joint project between the Times Leader and Eyewitness News (WBRE/WYOU), reporters from both news organizations spoke to players and business owners around Luzerne County, as well as state officials, for this deep dive into games of skill to learn what they are, how they impact businesses, and what future regulation might look like.
Find the Eyewitness News story here.
Learn what local legislators had to say here.
What are skill games?
Most people we caught up with on the street seemed to have a general understanding of what makes a game of skill different than similar-looking gambling device.
“A slot machine is the luck of the chance — pull the handle and hope for the best,” Suzanne Kwaitaoski, of Wilkes-Barre, said. “A skill game would be like poker, where you kind of have to know what you’re looking at in order to win.”
Bob Rossi, 68, of Wilkes-Barre, said he wasn’t “really familiar” with games of skill, but still offered a spot-on assessment.
“Slot machines are pretty much luck. Games of skill, like the name implies, you have to actually do something [to win], like make a decision,” Rossi said.
While this is all true, Michael Barley, chief public affairs officer for Pace-O-Matic, explained in a Zoom interview that skill games also have a much bigger chance of paying out as opposed to a gambling device.
“With a slot machine, you press a button and hope that you win or lose based on some math equation or algorithm that’s in the game. Our games don’t have that. Every single time, you can win more than what you used to play the game,” Barely said. “You can win up to 105% every time. It all depends on the way you play it.”
In spite of the fact that skill games are not legally considered gambling, some residents called them gambling all the same, merely because players still had to commit financially in order to collect a monetary prize.
“Anything where you put your money in and you’re not guaranteed it back is gambling,” said Jacob Dobrowski, a local college student.
Regardless of what people think does or does not constitute gambling, skill-based games do have a certain level of risk associated with them, and according to Josh Ercole, executive director of the Counsel of Compulsive Gambling of Pennsylvania, it’s important for people to know what those risks are so they can protect themselves.
“It’s obviously something people are going to participate in. It’s enjoyable; they have fun with it; it’s entertaining for whatever reason. But at some point, if someone takes things a little bit further than they should and starts to feel problems, that’s when we want to make sure we’re doing everything we can do make sure those resources are included,” Ercole explained.
Ercole said the organization’s gambling helpline averages around 100 calls a year from people who say they have a problem compulsively playing skill games.
“Our concern is that there are folks out there who are struggling and there are thousands and thousands of these machines that are basically being run without no oversight at all,” he said.
The executive director stated that possible future regulations on skill games, as well as the creation of resources, will go a long way in making sure people have the tools available to play safely.
Impact on small businesses
According to Louis Sewell, first vice commander of the Larksville American Legion Post 655 and president of the home association, revenue from skill-based gaming terminals have helped the organization afford general maintenance and upgrades to its building.
“We just put a roof on about three years ago. We needed it. Now, we have to upgrade all of our electrical boxes and update our air conditioning systems,” he said.
Since installing the games roughly a decade ago, Sewell said that they have brought in a revenue of about $7,000 every six months.
As skill games have become more popular, the process of players receiving their winnings has also been streamlined. Businesses now have payment terminals, where players must scan their ID and insert their receipt in order to get their prize.
Wilkes-Barre Gold owner David Zongaro, who recently installed skill games in his business about a month ago, said the terminal created a “perfect system.”
“The business owner doesn’t have to use his own cash so this way, that makes their reputation a lot better,” Zongaro said.
He added that installing the games in his store has increased traffic and has given customers a way to kill time if there’s a long line.
“A lot of them are already players, but I’ve also seen a lot of new players coming in. They like the fact that they actually have to think and it’s not just a game of chance like the slot machines,” he said.
The importance of regulations
It’s clear that skill games are not going anywhere and with the increase in popularity, many at the state and local level have called for legislation to regulate and tax the machines.
Recently, Pennsylvania Gov. Josh Shapiro included a 42% tax on daily revenue from games of skill in his proposed budget for the 2024-2025 fiscal year.
Times Leader Reporter Bill O’Boyle discussed other proposed legislation with several government officials in his accompanying article.
Tony Carlucci, president and general manager of Mohegan Pennsylvania, also offered a statement in support of the possible taxation of the games.
“Skill-based, slot-like gaming machines are certainly having a business impact to the PA Lottery, Mohegan Pennsylvania and the rest of the licensed casino industry in the Commonwealth. We feel that regulatory and taxation parity are essential, especially as Pennsylvania casinos contribute some of the highest gaming taxes in the nation, in addition to employing over 30,000 casino workers. Something must change, and we’re encouraged by Governor Shapiro’s proposal to tax and regulate skill games as part of his 2024/25 budget,” the statement read.
Barley said Pace-O-Matic fully supports regulating its machines and that the company “understands there needs to be guard rails” in place regarding where the games are and how many are installed in one location.
“No one thinks it’s a great idea that there should be 30 games in a trip mall location or even a convenient store where there’s 10 to 15 games,” Barley said. “There’s gotta be limits about where they can go and there should be literature and other services provided for folks who are having an issue with problem gambling.”
In its contract with businesses, Pace-O-Matic does have rules and regulations put in place that the company enforces and they do currently limit the numbers of machines that can be in placed in a particular establishment.
Barely said the company hopes similar provisions will be adopted into state law to further protect the public and help eliminate some of the illegal machines made by other companies that have emerged in the market.
“There are terminals out there that are slot machines. They’re used casino games. So, those would come off the street, you’d see the mini casino-type establishments go away and you’d see a cleaner atmosphere in the market,” Barley explained.
For example, Barely said that a test, based on certain requirements, to make sure a device is actually a game a skill and not a slot machine, is a good place to start and getting that seal of approval might help ease player’s fears.
“They’ll know that game is exactly what it’s supposed to be and the public will have that assurance as well.”
