A key Pennsylvania lawmaker leading legislative discussions concerning “gray market” skill games in the state says there’s no consensus on the issue yet — and not to expect any action on the topic in Harrisburg this year.
Sen. John Yudichak, a Republican who is chairman of the Senate Community, Economic, and Recreational Development Committee, told Penn Bets that the 14 meeting days of the fall legislative session will be consumed by other priorities, most notably legislative redistricting.
“I suspect there’s not going to be much oxygen to do a comprehensive gaming bill,” said Yudichak, whose committee is responsible for gambling legislation in the Senate. “Gaming is an issue that’s very hard to build consensus on, and there are many legislators opposed to gaming, period. Getting votes to pass a bill becomes very challenging.”
His committee held a series of hearings in June to hear from various gaming stakeholders — although, notably, not the skill games industry itself — about the impact of the proliferation of unregulated gaming devices in taverns, clubs, convenience stores, and other outlets around Pennsylvania. Yudichak is backing no specific legislation yet as a result of those hearings, but said that could happen in 2022, the second year of the current legislative session.
Representatives of casinos, law enforcement, and the Pennsylvania Lottery have been among those calling for legislation clarifying that the unsanctioned games are illegal, while associations advocating for taverns and clubs have called them a critical source of revenue that should be allowed. The Pennsylvania Gaming Control Board, which has no jurisdiction over the skill games, recently raised the issue of their spread being responsible for casinos’ petitioning the board to reduce the number of slots within their venues.
The skill games’ current legal status, meanwhile, is awaiting a Commonwealth Court ruling, with no definite timeline for a decision.
Senator wants casinos involved in expansion
Through a series of hearings and bills proposed in recent years, the legislature has been divided on whether to explicitly outlaw the skill games or to regulate and tax them similar to the 25,000 or so slot machines within casinos. Without any action either way, the murky status quo has continued.
Proposals have also been circulated to make other types of gambling machines more commonly available in the state, such as when Senate leaders brought a proposed VGT expansion to their members behind closed doors a year ago without gaining any traction. In addition, a Democratic senator recently introduced legislation suggesting sports betting kiosks should be permitted inside licensed taverns, although there’s no indication it will see any action.
“There are a lot of unanswered questions at the moment” about how the legislature should proceed on any gaming issues, Yudichak said, with the timing of the Commonwealth Court’s skill games decision and uncertainty over which way it will fall being among those.
Yudichak is of the opinion that a broad 2017 gaming expansion law that allowed online casino games and sports betting also clarified that skill games were illegal, but that viewpoint has yet to be confirmed in the courts.
The senator represents part of Luzerne County, where Mohegan Sun Pocono is located, and said he is a supporter of the casino industry. He understands their resistance to seeing any broader gaming expansion when they have already invested hundreds of millions of dollars in their brick-and-mortar properties and slot machines, but he believes a possible solution to the stymied debate over expansion sought by clubs and taverns would be having the casinos supply the machines to them.
“A way to potentially thread the needle is to have the casinos at the table, maybe providing 25,000 machines that could be taxed and regulated, and see if you can put them in a different location” than the casinos themselves, Yudichak said.
He noted that the state’s original law legalizing casinos allowed them to have many more slot machines than are currently in use. Due to the economics of supply and demand, no casino has ever maxed out at the 5,000 machines that most are allowed to contain.
“They need to be part of any modernization of the gaming market” in the state, considering the investments they’ve already made, Yudichak said of casino operators.
Skill games reps were deliberately excluded
While the Senate committee heard from numerous parties interested in the gaming expansion issue in June, notably missing were representatives of Georgia-based Pace-O-Matic, the developer of Pennsylvania Skill Games, or Miele Manufacturing, the Williamsport-based distributor of them. Yudichak said their omission was deliberate, based on legal advice from the Senate Republicans’ counsel.
“The decision was it would not be wise to have them testify” due to the pending Commonwealth Court case, the senator said. “We continue to have conversations and meet with all sides on the issue. They have access to my office and committee, but counsel felt it was wise not to have them testify.”
While the Senate’s Republican leadership has shown some interest in the gaming expansion issue, they have made it known to Yudichak that other matters are more pressing this fall, including the redistricting task that comes up every 10 years. Yudichak said the committee may hold another hearing this fall to further explore the issue of skill games or other expansion, as part of his goal of balancing the interests of communities, casinos, small businesses involved, and others — though he recognizes finding common ground is challenging.
“Without clear consensus, it’s difficult to get a bill done,” Yudichak repeated. “I think [the Republican Senate leaders] recognize that, and they’ve empowered me to continue looking to build that consensus.”