Pennsylvania Skill Games Face Uncertain Future After Budget Omission

The future of slot-like skill games in Pennsylvania is uncertain after state lawmakers opted not to include language in the 2026-27 budget to create a regulatory and tax framework for the controversial gambling machines.

Last month, Pennsylvania’s Supreme Court ruled that skill games are illegal slot machines. The state’s highest court rejected the skill gaming industry’s argument that the machines fall outside the Gaming Act because they incorporate memory-based bonus rounds that allow players to influence their payout rate, making the outcomes not solely dependent on chance.

For skill games to continue operating past the Supreme Court’s 120-day stay deadline on Oct. 27, 2026, the legislature must act. Otherwise, beginning Oct. 28, small businesses must power down the machines.

Skill Game Legislation

The Pennsylvania General Assembly approved the 2026-27 budget without a provision to legalize and regulate skill games. By leaving the machines out of the spending package, lawmakers kept the critical revenue sources that many small businesses claim skill games provide in jeopardy.

Skill games have operated in Pennsylvania for nearly a decade in a gray legal manner.

Commonly branded Pennsylvania Skill, the leading title from Georgia-based gaming software developer Pace-O-Matic, assembled by Pennsylvania-based Miele Manufacturing, proponents say the machines have helped countless small businesses navigate the COVID-19 pandemic and years of inflation and rising costs.

Many lawmakers in Harrisburg have sided with the skill gaming lobby because the games have helped businesses stay in business and keep Pennsylvanians employed. They also dismiss arguments from the legal and highly taxed casino industry that skill games poach play from slot machines.

House Bill 2557 and Senate Bill 1079 seek to legalize and regulate skill games, though neither has yet cleared a committee assignment. With the budget bypassing the matter, the measures could gain steam, as state lawmakers hear from their small business constituents.

Pennsylvania’s 2026 legislative session runs through Nov. 30.

Casino Pushback

Pennsylvania is home to the second-richest gaming industry in the nation, with gross revenue topping $7 billion in the latest fiscal year.

The industry has advised lawmakers to dismiss skill gaming legislation on claims that gambling machines should only operate within their highly regulated and secure environments, not in corner stores and gas stations.

Skill game critics say the machines are prone to minors gambling, become magnets for crime, and allow self-excluded problem gamblers to get their fix.

Another reason for the casinos’ opposition is that they claim skill games hurt their operations, resulting in reduced state tax revenue (Pennsylvania imposes one of the highest taxes on gross slot revenue at 55%).

Retail casino slot revenue was lower in 2025 than it was in 2024, down 0.6% to $2.43 billion. Casino slots generated about $15.2 million less than in 2024, though online slots may also be to blame for the decline.