PA Governor Proposes 42% Tax on Skill Games

Pennsylvania’s 2024/25 Budget Address came with a surprise that is likely to attract mixed reactions from PA online casino operators. State governor Josh Shapiro is proposing to slap a 42% tax on skill games.

Shapiro indicated during his budget speech that this tax could be implemented across the Keystone State as early as July, although the decision is yet to be finalized. 

Why Have Skill-Based Machines Attracted Controversy?

Skill games have been the subject of controversy across the state and, up until now, they remain unregulated. Many casino operators have even lobbied to have them banned. 

The main bone of contention? Operators claim that this is a case of two weights and two measures, as all forms of remote and land-based gambling are very heavily regulated and taxed, while these machines have been enjoying a tax-free ride for the past years.

More uproar came when the Commonwealth Court ruled that skill-based games like Pace-O-Matic were not a form of gambling because they incorporate a memory game that requires you to focus. Today, the machines have mushroomed across a wide variety of retail stores within Pennsylvania. 

The Impact on The PA Online Gambling Landscape

If the tax goes through, this could potentially see skill games rise as a new gambling vertical, killing animosity between PA’s casino operators and companies like Pennsylvania Skill. The latter is the organisation behind Pace-O-Matic, one of the most popular skill games that’s played across the state, which had already called upon casinos to “stop lobbing attacks against skill games’.