In a speech at the Capitol Rotunda in Harrisburg, Governor Josh Shapiro announced plans to regulate skill games in Pennsylvania starting in July of this year. The decision to implement skill games as a taxed form of gambling has caused controversy, as it goes against the wishes of PA online and retail casinos, which had been pushing for a complete ban on skill games.
The proposed budget, presented by Shapiro, includes a tax of 42 percent on the daily gross gaming revenue from electronic gaming machines that involve an element of skill and are regulated by the Pennsylvania Gaming Control Board (PGCB). The revenue collected from this tax will be deposited into a restricted account and transferred to the General Fund. The governor estimates that this regulation will generate over $150 million in tax revenue for the state in the coming fiscal year, with potential tax profits reaching over $313 million by 2025-2026.
The decision to regulate skill games creates a new gambling vertical, which is expected to coexist alongside online and retail casinos in the state. Mike Barley, Chief Public Affairs Officer at Pace-O-Matic (POM), a skill games manufacturer based in Georgia, has advocated for the regulation of skill games, arguing that they have no impact on the casinos’ bottom line and that regulation would support small businesses.
The regulation of skill games is expected to have minimal impact on the thriving gambling industry in Pennsylvania, with retail casinos generating $2.5 billion in slot income in 2023 and online casinos bringing in $2.1 billion in the same year. The tax revenue collected from skill games will provide benefits for the residents of Pennsylvania.
The decision to regulate skill games has been met with both support and opposition, but Governor Shapiro remains committed to moving forward with the implementation of taxed skill games in Pennsylvania.