Lawmakers seek to crack down on video skill games

John Finnerty/CNHI News Service Pennsylvania Lottery Executive Director Drew Svitko speaks at a press conference about legislation that would make skill-based video games illegal. The Lottery officials claim that competition from the skill-based video games are costing the Lottery $138 million in lost revenue a year.

HARRISBURG — Video-based skill games found increasingly in convenience stores and similar locations statewide would be banned under legislation announced last week.

The Pennsylvania Lottery estimates that games cost the Lottery $138 million in lost revenue and they confuse players who think they are playing Lottery-run games, said Lottery Executive Director Drew Svitko.

In a statement, former U.S. Rep. Tom Marino, vice president of government affairs/public relations for Pennsylvania Skill, the company operating the skill-based video games, called it “ludicrous” for the Lottery to say the games are costing the state money.

“We believe Pennsylvania Skill complements the offering of both the Lottery and casino industries,” said Marino, who stepped down from his seat in Congress in January. The state’s Lottery and casinos “are coming off record-breaking revenue-generating months and that is at the same time there are over 12,000 legal Pennsylvania Skill amusement devices in the commonwealth,” he said.

As of today, there are approximately 5,000 Games of Skill machines in Pennsylvania Lottery retailers. The Lottery estimates that for every Games of Skill machine placed in a Lottery retailer, the Lottery loses approximately $2,284 per machine per month. That’s money that would otherwise be directed toward programs and services for older Pennsylvanians.

But unlike the Lottery, the state doesn’t tax the games and there is no state regulation mandating how often the games must award prizes, said Maj. Scott T. Miller, director of the Pennsylvania State Police Bureau of Liquor Control Enforcement.

Unlike most gambling devices, these games operate due to legal ambiguity over whether they are permissible as games of skill instead of games of chance, Miller said.

Legislation authored by state Sen. Robert “Tommy” Tomlinson, a Bucks County Republican, would eliminate the ambiguity by explicitly barring the devices.

“I drafted this legislation after learning the impact these machines have on the Pennsylvania Lottery,” Tomlinson said. “I am concerned about the negative effect these unregulated, unlicensed, untaxed gambling machines have on unsuspecting players, youth and Lottery funds which support essential services for our senior citizens.”

Under Tomlinson’s bill, a first offense would be a first-degree misdemeanor that carries a fine of at least $5,000 per violation upon conviction. A second offense is also a first-degree misdemeanor that carries a fine of at least $10,000 per violation upon conviction. A third or subsequent offense would be a third-degree felony that carries a fine of at least $15,000 per violation upon conviction. These penalties create a deterrent that helps law enforcement address unsanctioned gambling.

Republican state Sen. Scott Martin of Lancaster County said the skill games have been installed even in communities that had otherwise opted-out of allowing other state-sanctioned gambling activity.

John Finnerty reports from the Harrisburg Bureau for The Meadville Tribune and other Pennsylvania newspapers owned by CNHI. Email him at jfinnerty@cnhi.com and follow him on Twitter @cnhipa.

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