As of Wednesday, the status of tens of thousands of skill gaming machines throughout Pennsylvania has changed dramatically. Following a 120-day legislative window that ended on Tuesday without any action, these machines are now considered illegal.
In June, the Pennsylvania Supreme Court ruled that skill games are classified as illegal slot machines rather than games of skill that fall outside state gambling regulations. This ruling overturned multiple lower court decisions that had favored these games.
The legal decision marks a significant turn in the ongoing conflict between skill game manufacturers and Pennsylvania’s casino industry, which has argued that these machines negatively impact both consumers and the state’s gambling tax revenue. The state's casinos are taxed at a rate of 54%, while skill games previously operated untaxed and without regulation.
The court provided a 120-day stay on enforcement to allow lawmakers time to introduce a regulatory framework, but with that period expired, state police have cautioned that any businesses still operating skill games face potential seizures and criminal charges. A statement from the state emphasizes that under the Gaming Act, only licensed casinos and certain licensed truck stops can legally possess and operate slot machines or video gaming terminals. Furthermore, only machines inspected and approved by the Pennsylvania Gaming Control Board (PGCB) may operate at these licensed establishments.
Despite their similarities to casino slots, skill games include a skill-based component meant to allow players to recover lost wagers. As of now, Pennsylvania has become one of the largest markets for skill games prior to the ruling. Estimates suggest there are between 50,000 to over 70,000 of these machines in circulation across the state, compared to about 25,000 regulated casino slots.
Over the first two months of the 2026-27 fiscal year, casinos in Pennsylvania have generated $427 million in gross revenue from slots and contributed $145 million in state taxes. Additionally, video gaming terminals at truck stops provided $6.7 million in revenue and $2.8 million in taxes.
While some local reports indicated the possibility of casino operators maintaining or installing skill games if they passed inspection, a PGCB spokesman clarified to iGB that this is inaccurate; all skill games are now deemed illegal.
This outcome has surprised many observers who anticipated some form of legislative agreement following the ruling. Prior to the court's decision, there was a belief that legislators would eventually reach a compromise. Two proposed bills (HB 2213 and SB 1079) aimed to regulate skill games by implementing a monthly fee of $500 per terminal and capping the total number at 50,000 units, with projections suggesting the potential for $300 million in annual tax revenue. However, neither bill has made significant progress, as the Pennsylvania legislative session is scheduled to conclude on November 30.
Susan Hensel, a gaming attorney and former director of licensing at the PGCB, expressed in July that discussions surrounding skill game regulation had been ongoing, though manufacturers lacked motivation to alter the situation. Hensel observed that representatives were likely receiving calls from local businesses impacted by the ruling, seeking solutions to maintain revenue streams necessary for their viability.
"There are very few parts of Pennsylvania that don’t have these games, so we anticipate that state representatives are hearing from establishments in their districts asking, 'What can you do to keep the money flowing?'" she stated.
