Pennsylvania Casino GM Says Skill Games Could Lead to Property’s Closure

Posted on: April 29, 2025, 12:21h. 

Last updated on: April 29, 2025, 12:49h.

Devin O'Connor @CasinoorgDevinO Read More

Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

• Presque Isle Downs & Casino says unregulated skill games have hurt its gaming business
• The casino near Lake Erie is owned by Churchill Downs
• Gov. Josh Shapiro wants to legalize skill games

One of the oldest casinos in Pennsylvania says its future is at risk because of controversial skill games.

Presque Isle Downs & Casino in Erie opened its gaming space in September 2007. Almost two decades later, officials at the property owned and operated by Churchill Downs say business has slowed in recent years. They blame the proliferation of skill games, slot-like gaming machines that have flooded many small businesses, including restaurants and bars, convenience stores, and gas stations.

Pennsylvania’s regulated and highly taxed commercial casinos oppose skill games on the claim that the unregulated, untaxed gaming terminals poach slot play from their properties. Speaking with YourErie.com, Presque Isle General Manager Gary Hendricks says gray games have cast a dark cloud over the casino’s economic forecast.

New Year’s Eve, the busiest day of the year for us, I still have 500 games that won’t get played,” Hendricks explained. “That’s how far the demand has dropped off with all of these other games on the market. And, of course, they’re not paying a gaming tax.”

Gov. Josh Shapiro (D) is supportive of solidifying a legal framework for skill games, which are commonly branded Pennsylvania Skill in the commonwealth. Shapiro says that regulating and taxing the terminals can help offset federal funding losses and help support increased spending.

Skill Game Impact

Last July, a coalition of 12 Pennsylvania casinos filed a lawsuit against the state demanding that it force skill game operators to pay the same 54% tax rate levied on their slot machines.

There is no basis for requiring licensed entities to pay about half of their slot machine revenue to the Commonwealth while allowing unlicensed entities to pay no tax on such revenue,” the lawsuit argued.

The Pennsylvania Supreme Court is reviewing whether skill games constitute illegal gambling devices or whether the skill component renders them immune from the Pennsylvania Gaming Act, as alleged by their proponents. Along with reduced casino slot revenue, officials at the Pennsylvania Lottery say it has “lost an estimated $200 million over the last five years” because of unregulated skill games.

In his February budget address, Shapiro suggested that lawmakers pass legislation to regulate and tax skill games. The governor proposed a levy of 42% on gross revenue retained by the machines.

Skill Game Regulation Imminent 

A senior official in the Pennsylvania House of Representatives tells Casino.org that it’s only a matter of time until skill games become legal amusement or gaming devices through state legislation. With budget gaps ballooning, the legal advisor, who requested anonymity, said the odds of skill games, as well as recreational cannabis, being legalized are good.

Hendricks says that will further hurt Presque Isle’s gaming business.

We’re going to get to a point where it’s the straw that’s going to break the camel’s back,” Hendricks said. “We’re concerned today about the long-term sustainability of the property.”

Presque Isle slots generated gross gaming revenue of $87.5 million in 2024. In 2023, the slot win totaled $91.7 million. Before the COVID-19 pandemic and the spread of skill games, Presque Isle reported slot machine win in the 2018/19 fiscal year of almost $114.9 million.