In two decisions issued in the last few months, the Commonwealth Court of Pennsylvania has established conclusively that the state’s Gaming Act is inapplicable to so-called “skill-based” video game machines that are ubiquitous in taverns, restaurants, and other liquor-licensed establishments in the Commonwealth. After a comprehensive discussion of the rules of statutory construction and the Gaming Act’s legislative history, the Court reasoned that the Gaming Act applies only to legal gambling devices operated in licensed establishments, and not to unlicensed or illegal slot machines, which remain governed by the Crimes Code. Therefore, the Court also held, the games and those who manufacture, distribute and operate them are not subject to regulation by the Pennsylvania Gaming Control Board.
In a January 22, 2020 article, the Delco Times declared the decision a “decisive win” for the game’s proponents. But was it? Continue reading PA Court Rules that Pennsylvania Skill Games are Neither Governed by the Gaming Act nor Regulated by the Pennsylvania Gaming Control Board. So What?
On June 22, 2016 the Pennsylvania General Assembly passed a sweeping expansion of gambling . The bill, which must be passed by the state’s Senate and signed by the Governor, would allow for internet based gambling, daily fantasy sports, slot machines at off-track betting parlors (“OTBs”), slot machines at airports and even paves the way for legalized sports betting, if, and when that is allowed under federal law.
- Pennsylvania would be the fourth state to allow legal internet gambling (Internet gambling is currently legal in New Jersey, Delaware and Nevada);
- Internet gambling would be offered through the Commonwealth’s current, licensed casinos with each casino paying an $8 million license fee to offer internet gaming;
- Age and geo-location controls will be required – players must open an account, be 21 or over and must be located within PA while participating in internet gambling;
- The tax rate on internet gambling revenue would total 16%;
- Participating casinos would not be allowed to reduce their number of slots machines their existing b casinos
Daily Fantasy Sports
- Bill allows current DFA operators like FanDuel and Draft Kings to obtain a license to offer DFS without partnering with a PA casino; DFS operators would pay 5% of its revenues ( after player payouts) to the state;
- DFS players must be 18 yo or older;
Slots at OTBs
- PA’s 5 racetrack casinos would each be permitted to have up to 4 off-track betting parlors with up to 250 slot machines per OTB;
- Each such OTB must be outside a 50 mile radius of an established PA casino;
- There is a $5 million licensee fee for each OTB with slots;
Slots at Airports
- Casinos can seek permission to install slot machines at airports; the PA Gaming Control Bd can set limits on the number of slot machines l allowed;
- License fees for such operations would be $5 million in Philadelphia; $2.5 million in Pittsburgh; and $1 million a each at the four other international airports in PA;
Expansion of Current Resort Casinos
- Current Category III casinos in PA can expand their max slot machines counts from 600 to 850 and table games from 50 to 65;
- There is also a relaxation in the requirement that casino patrons be customers of other amenities;
- If a current Category III casino and all three changes it so would requires $4.5 million is additional license fees.
- The bill instructs the PA Gaming Control Bd to develop regulations to allow for sports wagering if, and when the federal government permits such sport betting
A Proposed Amendment to the New Jersey State Constitution will authorize two additional casinos in the State. The details of the Proposed Amendment are as follows:
- No more than 2 casinos, each one to be located in different counties in State
- New casinos must be located outside a 75 mile radius from Atlantic City.
- Eligibility for the license is limited to:
- (1) a currently licensed Atlantic City casino operating as of December 11, 2015; or
- or (2 ) any person licensed as a principal owner (yet undefined) of a holder of a New Jersey casino license that was operating a casino which was conducting gambling on December 11, 2015 if that principal owner also holds a valid license to own and operate a casino in another jurisdiction with licensing standards similar to those in New Jersey
- Tax rate to be determined in subsequent legislation. 49% of such tax revenue for 15 years is dedicated for recovery , stabilization or improvement of Atlantic City. 2% of tax revenue dedicated to thoroughbred and standardbred horsemen.
- The Resolution has to be approved with 3/5 votes by both houses of the NJ Legislature or majority votes twice over two years. The votes have to be completed at least 90 days before going on the ballot of a state-wide referendum to amend the NJ State Constitution.
A copy of the proposed amendment can be read here: SCR 185.
On February 12, 2014, the Pennsylvania House of Representatives’ Gaming Oversight Committee held a hearing to receive testimony regarding the prospects of legalizing electronic gaming devices, i.e video gaming machines, in the Commonwealth. The hearing focused on gaming along the lines of what was raised in a prior session’s bill, (2014 House Bill No 1932), which sought to legalize video gaming machines for bingo, keno, blackjack and other games for use in establishments with valid liquor licenses, such as restaurants, bars, taverns, hotels and clubs.
With a looming budgetary deficit Pennsylvania legislators are exploring various ways to increase gaming related tax revenue, including potentially moving forward with internet gaming through its existing bricks and mortar casinos. This recent Gaming Oversight Committee hearing revisiting the video gaming machines issue would be another means through which to generate gaming based tax revenue. The hearing’s witnesses touted the jobs and tax revenues generated by Illinois which implemented video gaming machines in bars, restaurants, taverns and truck stops several years ago – (projected IL tax revenues in excess of $250 million in 2015). While Illinois has had success generating tax revenue and producing jobs with its video gaming machine roll out, the machines do compete, on a low end basis with the states’ existing casinos. While local municipalities in Illinois can opt out of the video gaming program that option may not exist in a Pennsylvania bill and opposition from Pennsylvania’s casino industry remains to be seen.
Also, if considering video gaming at bars and taverns Pennsylvania may be well served to learn from some of the mistakes made with the passage of last year’s Tavern games legislation. Tavern games, with its gaming regulatory scrutiny focused on the bars/tavern owners, rather than through the games’ owners and route operators, lead to cost issues and a reluctance to move forward which hampered widespread implementation of tavern gaming. In addition, while Illinois has had relative success with its multi-tiered system of manufacturers, distributors, operators and establishments, that system has one too many layers to operate as effectively as it otherwise could. Few recall Pennsylvania’s short-lived requirement of local suppliers of slot machines layered between the industry’s manufacturers and end user casinos. The removal of the local supplier requirement opened the way to the implementation of Pennsylvania casinos in 2006. Finally the Pennsylvania Gaming Control Board and its agencies are more than capable of regulating and rolling out video gaming should it become law. Bringing in other, less experienced state agencies, such as Liquor Control or the Department of Revenue would only further complicate and delay implementation should the law pass.
Japanese lawmakers have submitted a bill to the Japanese Parliament which would legalize casinos in Japan. The bill, which apparently has cross party support, including from Japan’s ruling Liberal Democratic Party, is the culmination of recent momentum prompted by the 2020 Olympics being awarded to Tokyo.
Continue reading Japan Moves Toward Legalizing Casinos