Pennsylvania Skill Industry Claims iGaming, Not Skill Games, Hurting Brick-and-Mortar
Posted on: January 27, 2026, 09:12h.
Last updated on: January 27, 2026, 09:22h.
- Proponents of Pennsylvania skill games claim they don’t compete with casino slot machines
- The skill gaming advocates say iGaming is the main reason for in-person casino declines in the commonwealth
The Pennsylvania skill gaming industry cites the state’s 2025 gaming revenue report as evidence that iGaming — not its gaming terminals found in small businesses — is poaching customers from brick-and-mortar casinos.
Last week, the Pennsylvania Gaming Control Board (PGCB) revealed that the state’s gaming industry reached a new annual record for a fifth consecutive year.
Players in the commonwealth lost almost $6.8 billion across the many legal gaming verticals, including commercial casinos, iGaming, sports betting, truck stop video gaming terminals, and fantasy sports. The gross gaming revenue (GGR) figure is separate from other forms of gambling, including the state-run lottery, charitable gaming, and skill games.
iGaming GGR surged 27% to $2.77 billion, and sports betting win climbed 18% to $602.5 million. Meanwhile, in-person casino revenue was down 0.8% to $3.35 billion, with slot revenue down 0.6% to $2.43 billion.
The data makes one thing abundantly clear: brick-and-mortar casinos are losing customers to online gambling, not skill games,” said Mike Barley, Pace-O-Matic’s chief public affairs officer.
Pace-O-Matic, or POM, is a Georgia-based gaming software developer. It manufactures its skill games, branded Pennsylvania Skill, with Pennsylvania-based Miele Manufacturing.
iGaming Hurting Retail Casinos
For years, the casino lobby in Pennsylvania has argued in state courts that skill games are slot machines operating in an unregulated environment across the commonwealth. The state gaming regulatory board agrees.
Courts have issued various opinions on the legality of skill games. However, a December 2023 opinion from the Commonwealth Court ruled that skill games aren’t slot machines and are, therefore, not subject to the state Gaming Act.
The casinos say skill games, found in restaurants and bars, gas stations, convenience stores, and retail spaces dedicated to their operation, are poaching play from their heavily regulated and taxed slots. POM says the 2025 revenue report once again shows that iGaming is a bigger culprit for the slowing of in-person revenues.
“Here we are again, congratulating the casino industry on record profits while some casino operators continue to misdirect blame toward skill games. Industry leaders know the market is changing — their own research proves it — but blaming skill games is easier than confronting the real shift happening online,” Barley added.
It’s worth noting that gross gaming revenue does not constitute casino “profits.”
Gov. Josh Shapiro (D) is supportive of creating a regulatory framework for skill games, so long as Harrisburg gets a big take of the proceeds. POM and the many small businesses that house the games support a low state tax to allow the grey games to continue to offset higher costs for goods, services, and employees.
The Pennsylvania Supreme Court is expected to hand down the final say on skill games this year.
Apples to Oranges?
iGaming indeed continues to expand in Pennsylvania. Online casino revenue has grown each year since internet slots and interactive table games went live in 2018.
Online gaming platforms reach consumers of legal gaming age in all parts and corners of the commonwealth, providing easy, convenient access. Skill games and slots require physical movement, which could be a more accurate representation of the impact of skill games on casino slots.
Gary Hendricks, the general manager of Presque Isle Downs & Casino, says skill games have unquestionably negatively impacted slot play.
New Year’s Eve, the busiest day of the year for us, I still have 500 games that won’t get played,” Hendricks said. “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.”
The Pennsylvania Lottery says it, too, has been damaged by unregulated skill games. The lottery estimates that it’s lost more than $200 million over the last five years because of skill games.
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