Las Vegas Review-Journal (Sunday)
Pa. seeks to ban cash-paying video terminals
Supporters say games based on skill, not luck
HARRISBURG, Pa. — Just across the mall lobby from the glass-door entrance to the Pennsylvania attorney general’s office sits a cash-paying electronic game terminal that the office is fighting to outlaw, along with thousands of other devices like it around the state.
In an unfolding court battle, the state’s top law enforcement office is representing Gov. Tom Wolf ’s administration, which accuses the proliferating machines of siphoning more than $200 million in revenue last year from the Pennsylvania Lottery.
An ally is Pennsylvania’s competition-wary casino industry in the nation’s No. 2 commercial casino state.
The court fight comes down to whether Pennsylvania law prohibits the machines as unlicensed slot machines, even if a player’s success is supposedly based on skill, rather than chance.
Arguments are scheduled for Wednesday before the state’s Commonwealth Court in a case given momentum by recent police seizures of the machines. The court, on Dec. 13, ordered a halt to police seizures of the Pennsylvania Skill brand of game terminals and it will decide whether to maintain that injunction while it considers the legal fate of the machines.
How the courts rule could have ramifications for those profiting from the games: coin-operated machine distributors, bars, pizza parlors, groceries, corner stores, bowling alleys, tobacco shops and even the greeting card store steps away from the attorney general’s office.
Nonprofit clubs, such as the Rescue Firemen’s Home Association in Middletown, near Harrisburg, say the games are allowing them to make far bigger charitable contributions to the community.
Meanwhile, storefronts have popped up with nothing but machines inside, sometimes 10 or more. Some, including ones in Monaca and Ambridge, about 15 or 20 miles outside Pittsburgh, have prominent window advertisements saying “WIN CASH.” Lawmakers are paying attention. “The fact that these machines are everywhere has been the biggest concern,” said House Gaming Oversight Committee Chairman Jim Marshall, R-Beaver.
The machines have spurred friction in other states, too, but the stakes might be higher in Pennsylvania, where the lottery and casinos are big revenue producers, at more than $2.5 billion a year.
Legal limbo has surrounded the machines since they began arriving in earnest in Pennsylvania a few years ago, now numbering upward of 20,000, according to a state police estimate. Operators estimate that the machines take in hundreds of millions of dollars a year, divvied up among the host, the distributor, the manufacturer and the software-maker.
The most common machine is the Pace-O-Matic, from a Georgia-based software-maker. In Pennsylvania, those machines are branded as Pennsylvania Skill and assembled by a Williamsport-based coin-op machine distributor, Miele Manufacturing.
Miele Manufacturing points to a Beaver County judge’s ruling in 2014 that the state did not prove that the games on a seized machine — a tictac-toe game, a shooting game and a memory game — were based on chance and, as a result, should not have been seized by police. The state did not appeal.
Miele Manufacturing has hired prominent lobbyists and lawyers, including a former congressman, and assembled more than $270,000 for campaign donations to make its case. One booster is Bob Asher, Pennsylvania’s Republican national committeeman, who has told lawmakers he would like to see VFWs and American Legion halls use the machines to help them keep their doors open.
In the Legislature, lawmakers are eyeing competing proposals to ban the machines or regulate them in some fashion.