PA Senator Introduces Legislation to Regulate Legal Skill Video Games

May 21, 2023 | Legislature

HARRISBURG, PA (May 10, 2023) – Today Senator Gene Yaw (R-23) announced the introduction of legislation to establish a regulatory framework and taxing structure on legal skill video games in the Commonwealth.

“Many skill game terminals are manufactured in Pennsylvania and 90% of the revenue they generate stays here, mainly in the communities where the games are located,” Sen. Yaw said. “Thousands of skill games exist throughout the state, and they cannot and should not be ignored. Skill video games are meeting a growing demand for this type of entertainment and with each passing day, Pennsylvania is missing out on the opportunity for significant additional revenue. It’s time we recognize the benefits of this emerging industry and offer regulatory support.”

Senate Bill 706 establishes the Skill Video Gaming Act, which directs sole regulatory authority over the sale, distribution, and use of a skill video game system to the Pennsylvania Department of Revenue. Enforcement will be carried out by the Bureau of Liquor Control Enforcement (LCE).

The proposal includes an initial license application fee of $1 million for skill video game distributors, $25,000 for operators and $250 for establishments, followed by a yearly renewal fee structure.

According to Yaw, this structure could generate an estimated $300 million in immediate annual tax revenue. The bill includes a 16% tax on legal skill video games. From that tax, 50% will be deposited into the General Fund, while 22% will be proportionally distributed to both individual counties and municipalities based on their respective gross profit. The remaining revenue will be directed to LCE for enforcement purposes.

Yaw also noted that the measure includes a valid ID requirement to play and a limit on the number of machines per establishment. All games will be required to be connected to a terminal collection and control system that allows the Commonwealth to monitor all transactions and ensure that all taxes are accrued and paid. Additionally, the legislation will strengthen penalties for those who operate unlicensed and illegal games and gambling devices.

For more state-related news and information, constituents can visit Senator Yaw’s website at or follow him on Facebook and Twitter @SenatorGeneYaw.

CONTACT: Elizabeth Weitzel – 717-787-3280.

EDITORIAL: Regulate ‘Skill Games’

Unless the state Supreme Court overturns those decisions, the state Gaming Control Board may not regulate skill games as gambling.

U.S. District Judge Michael Baylson of Philadelphia, meanwhile, ruled on May 9, that a skill games lawsuit brought by Parx Casino of Bucks County may proceed.

So the legal question of whether skill game terminals are gambling devices is not fully settled. But according to Republican state Sen. Gene Yaw of Lycoming County, the state government should regulate the enterprise in either case.

The principal difference between video slot machines and video skill game terminals is that slots require no player input other than money, whereas skill games are interactive.

Regarding state regulation, it’s a distinction without a difference. Yaw has introduced a bill to regulate the enterprise through the Department of Revenue, with enforcement assigned to the Bureau of Liquor Control Enforcement.

The proposal would limit the number of machines per establishment, much as state regulations determine the number of slots per casino.

Yaw proposes a $1 million application fee for skill game distributors, a $25,000 fee for operators and a $250 fee for host establishments. The bill also would establish a 16% tax on proceeds, the same rate that applies to casino-based online poker and table games. Casinos pay a 54% rate on slot revenue.

Yaw claims the regime would produce about $300 million a year. The state would assign 50% to the general fund, distribute 22% to county and municipal governments and use the rest for enforcement.

Yaw, citing a study showing that Pennsylvania’s lottery proceeds have grown at a rate greater than that in other Northeast states that don’t have skill games, contends that skill games do not diminish other forms of gambling — all the more so because they can’t be played online.

Whatever the final numbers, Yaw’s approach is reasonable. It would recognize the games as a valid business, ensure continuing revenue for civic organizations and small businesses and assuage casinos’ concerns about unregulated competition.

SOURCES: Senator Yaw’s website and

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