Pennsylvania Supreme Court Declares "Skill Game" Machines Illegal
On June 15, 2026, the Pennsylvania Supreme Court issued a significant decision holding that so-called "skill game" machines, including Pace-O-Matic (POM) devices commonly found in bars, convenience stores, and similar establishments throughout Pennsylvania, are slot machines subject to regulation under the Pennsylvania Gaming Act and prosecution for unlicensed gaming and gambling under the Pennsylvania Criminal Code.
Background: Pennsylvania Skill Games
Skill game machines have been widely deployed throughout Pennsylvania in bars, convenience stores, and other businesses. Manufacturers and operators have long maintained that these machines are lawful games of skill rather than unlawful gambling devices.
The Pennsylvania Supreme Court's decision addressed two separate but related cases involving the legality of these devices.
Court Decision
The Supreme Court's ruling resolved two cases involving the seizure and operation of skill game machines.
In one case, skill game manufacturers sought relief after law enforcement seized their devices, arguing that the machines were lawful games of skill.
In the second case, the Pennsylvania State Police sought forfeiture of seized machines and associated revenue, asserting that the devices constituted illegal gambling instruments under the Pennsylvania Criminal Code.
The Pennsylvania Commonwealth Court previously ruled in favor of the manufacturers and operators in both cases, concluding that:
- The Pennsylvania Gaming Act applied only to licensed casinos; and
- Skill game machines were not unlawful gambling devices under the Pennsylvania Criminal Code.
The Pennsylvania Supreme Court reversed those decisions.
1. The Pennsylvania Gaming Act and Criminal Code Operate Together
The Court held that the Pennsylvania Gaming Act and the Pennsylvania Criminal Code must be read together.
According to the Court, gambling activity is broadly prohibited unless specifically authorized under the Pennsylvania Gaming Act.
2. Skill Games Are Slot Machines Under the Gaming Act
The Court further concluded that the Pennsylvania Gaming Act is not limited to licensed casinos but extends to the manufacture, distribution, and use of slot machines more generally, including unlicensed activity.
Most significantly, the Court specifically held that the skill game devices at issue qualify as "slot machines" under the Pennsylvania Gaming Act.
Because these machines are not licensed or otherwise authorized under the Act, their operation constitutes unlawful gambling activity subject to enforcement under the Pennsylvania Criminal Code.
Current Compliance Status
The Pennsylvania Supreme Court issued a 120-day grace period before its order takes effect.
Unless Pennsylvania lawmakers enact legislation permitting and regulating skill games during that period, operators who do not possess slot machine licenses will be subject to law enforcement actions after the grace period expires in accordance with the Court's Opinion.
Potential Consequences for Operators
According to the Court's ruling, operation of unauthorized skill game machines may result in enforcement under the Pennsylvania Criminal Code.
A violation constitutes a first-degree misdemeanor and may result in:
- Confiscation of the gaming device;
- A fine of up to $10,000; and
- Imprisonment for up to five years.
The Pennsylvania Department of Revenue may also seek back taxes on revenue generated through the operation of unlicensed skill games.
Practical Considerations for Businesses
Gaming licenses for slot machines in Pennsylvania are limited, subject to strict quotas, and costly to obtain and maintain.
Absent legislative changes, it will be impossible for almost all, if not all, entities currently operating skill game machines in Pennsylvania to continue operating those machines as licensed slot machine operators.
Businesses currently operating skill games should closely monitor developments during the Supreme Court's 120-day grace period.
Potential Legislative Action
Various proposed state acts have sought to establish a regulatory framework for skill games in Pennsylvania. However, none have been enacted into law to date.
The Pennsylvania Supreme Court expressly acknowledged that the General Assembly remains free to address the issue through legislation, stating that "our General Assembly also remains free at any time to take whatever legislative [action] it may deem appropriate" regarding skill games.
Whether the legislature acts before the expiration of the Court's grace period remains to be seen.
Strategic Outlook
The Pennsylvania Supreme Court's decision represents a significant change in the legal landscape for skill game operators throughout the Commonwealth.
While the Court provided a 120-day grace period before enforcement may begin, businesses currently operating skill game machines should carefully evaluate their exposure and monitor legislative developments that could affect the future regulation of skill games in Pennsylvania.
Contact Our Business Law Team
MacDonald Illig is closely monitoring developments related to the Pennsylvania Supreme Court's ruling and any proposed legislation affecting skill games in Pennsylvania.
For questions about how these developments may affect your business, please contact a MacDonald Illig attorney at 814-870-7600.
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