Pennsylvania Gov. Seeks Skill Games and Adult-Use Cannabis Legislation to Fund Higher Spending
Posted on: February 10, 2026, 07:27h.
Last updated on: February 10, 2026, 07:27h.
- Pennsylvania Gov. Josh Shapiro wants to regulate and tax skill games
- Along with recreational marijuana, Shapiro thinks skill game taxes can help fund higher K-12 education spending
For a second year in a row, Pennsylvania Gov. Josh Shapiro (D) is calling on the General Assembly to send him a bill to legalize and tax skill games.
Shapiro’s 2026-27 Budget Address to the legislature included a request that state lawmakers in Harrisburg find a way to regulate and tax skill games.
Commonly branded Pennsylvania Skill, the unregulated gaming machines are found in restaurants and bars, grocery stores, gas stations, nonprofit organizations, and small businesses like vape shops. Many such small businesses are Pennsylvania Lottery retailers. Lottery officials say skill games cut into their operation.
Shapiro wants to spend $53.2 billion during the fiscal year, a 5.4% increase from 2025-26. The rising Democratic Star, considered a front-runner for the party’s ticket come 2028, plans to dip into the state’s rainy day fund to avoid raising taxes. Shapiro also thinks legalizing skill games and adult-use cannabis will help ease the revenue burden. The governor is seeking a more than 8% funding increase to K-12 education spending to $20.65 billion.
Skill games look, sound, and largely operate like a casino slot machine, but they differ in that a player must try to assemble winning paylines by tapping on the screen. The player can also impact their payout rate by completing a skill-based game that’s similar to Simon Says called “Follow Me.”
Skill Games Regulation
Shapiro thinks it’s long past due that Pennsylvania legalizes the estimated 70,000 unregulated skill games operating across the commonwealth to protect consumers and generate a tax benefit.
“What this budget does do is finally regulate and tax skill games and pass comprehensive cannabis reform. District Attorneys from across the Commonwealth are calling on us to regulate skill games and finally provide law enforcement with clear guidance,” Shapiro said.
We’re putting our communities at risk and losing out on billions of dollars in revenue by doing nothing on both. Everyone knows we need to get this done. So, let’s come together and finally get it over the finish line,” Shapiro appealed.
The governor’s budget estimates that skill games, along with recreational marijuana, could generate approximately $2 billion a year in tax revenue. Shapiro has proposed that the General Assembly pass rules for how skill games operate and demand a 52% state cut on the machines’ gross revenue.
The first $1 million in skill gaming taxes would be set aside for the Compulsive and Problem Gambling Treatment Fund. After 10% of the skill tax would be returned to the host counties and municipalities where the skill games operate, the rest of the money would go to the General Fund.
Skill Gaming Opposition
The companies behind skill games in Pennsylvania, primarily Pace-O-Matic and Miele Manufacturing, want to be regulated and taxed in the commonwealth. The Pennsylvania Tavern and Players Association, a group promoting the benefits skill games provide to host establishments, does, too.
However, the skill gaming interests say a much lower tax than the one suggested by Shapiro is needed to ensure that the games continue to support small businesses, protect jobs, and keep costs down for consumers.
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