Pennsylvania Lawmaker Wants to Legalize Skill Games and Put More Gaming Tax Money in Homeowners’ Pockets

A Pennsylvania lawmaker wants to give controversial slot-like skill games a regulatory framework while overhauling the state’s tax structure to direct more gambling revenue to homeowners.

Pennsylvania Rep. Russ Diamond (R-Lebanon) says he will soon introduce legislation to legalize skill games in social clubs, restaurants, bars, and truck stops that hold licenses from the Pennsylvania Liquor Control Board.

“It’s been over 20 years since limited slot machine casinos were authorized to operate in Pennsylvania for the purpose of supporting the race horse industry and providing property tax relief to homeowners. Much has changed since the Race Horse Development and Gaming Act was first imagined by our predecessors,” Diamond wrote in a memo to his colleagues in Harrisburg.

Diamond proposes allowing each qualified location up to five skill games, and taxing terminal gross gaming revenue (GGR) at 20%.

Gaming Tax Redirect

Along with regulating and taxing skill games, Diamond says it’s time to overhaul how the state uses its gaming taxes. Because of its high tax rates, Pennsylvania collects more gaming tax revenue than any other state.

Diamond recommends eliminating local share programs in favor of directing those funds to residential property tax relief. Under his forthcoming legislation, tax revenue from all forms of gaming would be deposited into the State Gaming Fund and distributed as follows:

• 6.75% to the Race Horse Development Trust Fund
• 1% to the Compulsive and Problem Gambling Treatment Fund
• 79% to the Property Tax Relief Fund
• 13.25% to the General Fund

Local governments, under the current tax structure, collected $545.6 million in 2025. Diamond wants to cancel those allocations and generate additional gaming tax money through skill games.

Diamond says the proposal would generate almost $1 billion in additional money for the Property Tax Relief Fund. Had skill games been regulated and Diamond’s tax overhaul been in place in 2025, 2.87 million qualified homeowners would have received a property tax rebate of $702.

Bill Future

Diamond is the minority leader of the House Gaming Oversight Committee. He plans to file his skill games bill “in the near future,” asking state lawmakers in the interim to join him in cosponsoring the legislation.

County and municipal governments will push back on Diamond’s bill, especially those that have casinos in their backyards and rely heavily on local share disbursements. Localities have welcomed casinos in exchange for approximately 2-4% of the gaming venue’s monthly GGR proceeds.

If Diamond’s bill isn’t adopted, the Pennsylvania Supreme Court has ordered that skill games be turned off when its stay expires on Oct. 13, 2026.