{"id":395,"date":"2020-02-26T15:25:58","date_gmt":"2020-02-26T19:25:58","guid":{"rendered":"http:\/\/blogs.duanemorris.com\/gaminglaw\/?p=395"},"modified":"2020-02-26T15:25:58","modified_gmt":"2020-02-26T19:25:58","slug":"pa-court-rules-that-pennsylvania-skill-games-are-neither-governed-by-the-gaming-act-nor-regulated-by-the-pennsylvania-gaming-control-board-so-what","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/gaminglaw\/2020\/02\/26\/pa-court-rules-that-pennsylvania-skill-games-are-neither-governed-by-the-gaming-act-nor-regulated-by-the-pennsylvania-gaming-control-board-so-what\/","title":{"rendered":"PA Court Rules that Pennsylvania Skill Games are Neither Governed by the Gaming Act nor Regulated by the Pennsylvania Gaming Control Board. So What?"},"content":{"rendered":"

In two decisions issued in the last few months, the Commonwealth Court of Pennsylvania has established conclusively that the state\u2019s Gaming Act is inapplicable to so-called \u201cskill-based\u201d 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\u2019s legislative history, the Court reasoned that the Gaming Act applies only to legal<\/em> gambling devices operated in licensed establishments, and not to unlicensed<\/em> or illegal<\/em> 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.<\/p>\n

In a January 22, 2020 article, the Delco Times<\/em> declared the decision a \u201cdecisive win\u201d for the game\u2019s proponents. But was it?<\/p>\n

The lawsuit, which POM of Pennsylvania, LLC (\u201cPOM\u201d) filed against the Pennsylvania Department of Revenue and the City of Philadelphia, did not even raise the applicability of the Gaming Act or the scope of the Gaming Control Board\u2019s jurisdiction. In fact, those questions arose only because the Department of Revenue raised them in a counterclaim. Rather, POM\u2019s Complaint asked the Court to declare the game a legal device under Pennsylvania law and to enjoin the City from seizing the games or initiating administrative or criminal proceedings relating to the games and those who operate them. The Court did neither. At least not yet.<\/p>\n

How will the Commonwealth Court determine whether the game is illegal? POM argues that the Court should follow an unpublished decision of the Court of Common Pleas of Beaver County in a 2014 case in which that court held that a similar POM game was predominated by skill, rather than chance, and thus was not an illegal gambling device. Although a Court of Common Pleas decision is not binding precedent, it may be cited for its persuasive value. Recently, the Pennsylvania Gaming Control Board asked its licensees and applicants for licenses to confirm that they do not operate or have an interest in the operation of the so-called skill games in the Commonwealth. One might infer from the inquiry that the regulator of legal gaming considers the games to be illegal devices. This anecdotal evidence might also have persuasive value.<\/p>\n

Although not cited in the two Commonwealth Court decisions discussed in this blog, there is binding precedent from the Pennsylvania Supreme Court (Com. v. Two Electronic Poker Game Machines<\/em>, 502 Pa. 186 (Pa. 1983)) as well as a well-reasoned Superior Court decision (Com. v. One (1) Jersey Hold\u2019em Machine Serial No. DDGPA0003<\/em>, 2014 WL 10749241 (Pa. Super. 2014), allocatur denied<\/em> 632 Pa. 693 (2015) though designated \u201cNON-PRECEDENTIAL\u201d by that court) that should guide the Commonwealth Court. Ultimately those courts applied a \u201cpredominate factor\u201d standard and relied on the proverbial \u201cbattle of the experts\u201d to determine whether skill or chance was the \u201cpredominate factor\u201d in determining a player\u2019s success. They considered the following factors:<\/p>\n