Pennsylvania lawmakers debate tax rate for skill game machines

Pennsylvania lawmakers are considering a tax on skill game machines, with business owners advocating for a lower rate than the governor's proposal.

Pennsylvania lawmakers are considering a tax on skill game machines, with business owners advocating for a lower rate than the governor's proposal.

Pennsylvania lawmakers are considering a tax on skill game machines, with business owners advocating for a lower rate than the governor's proposal.

Amid efforts to balance the budget for the upcoming fiscal year, Pennsylvania lawmakers are poised to impose a tax on skill game machines as business owners and social club operators push for a framework of regulation and taxation following a number of legal challenges over the years.

Revenue from "skill game" devices, which often resemble slot machines but have not been deemed illegal gambling devices by courts, is not currently taxed. Lawmakers have estimated hundreds of millions of dollars in revenue could come in from the devices.

On Tuesday, a group of business owners and operators of social clubs that get a share of the profit from the devices held an event at the Capitol, rallying for passage of regulations and taxes on the devices — a move that many believe would legitimize the devices beyond legal challenge.

"Thanks to those games, we've been able to pay our bills, hire help and give back," said one business owner.

Some business owners and lawmakers are pushing for a 16% tax on skill game revenue, significantly lower than the 52% tax rate proposed by Gov. Shapiro, which is closer to the rate slot machine operators pay.

Many lawmakers believe a compromise could be reached somewhere between these figures.

"Let's be realistic. When the casinos came in, we told them you have to tax your slot machines at 54%. We're like stakeholders for half of the slot machines. And now you're gonna come in at 16%? Not doable," said Rep. Neilson.

With the state Supreme Court potentially weighing in on the legality of skill games, some lawmakers argue it's time to clarify the future of these devices.

"We could have passed this bill two years ago. We would have had $500 million, but we didn't. Are we going to do that again because a couple people don't want to go along with it?" said Sen. Gene Yaw.