In response to concerns regarding the regulation and taxation of malt beverages, the Philadelphia City Council’s Committee on Public Safety convened on Feb. 20, 2024, to deliberate on the proposed ordinance targeting skill games. Distinguished from chance-based casino gaming machines, skill games necessitate mental or physical skill for successful gameplay. Often mirroring the appearance of traditional gaming devices, these machines have sparked debates and continuing court battles over their legality.

The ordinance in question seeks to impose a ban on both gambling and skill games, unless such activities receive official licensure from the Commonwealth of Pennsylvania. Non-compliance with this directive would incur a penalty of $1,000 per unauthorized machine. However, the ordinance carves out exceptions for entities duly licensed under the Pennsylvania Race Horse Development and Gaming Act, alongside establishments licensed to serve alcohol provided they possess at least twenty seats and routinely provide food and beverage consumption.

This legislative move garners widespread support among Philadelphia council members and is poised for passage. In the context of licensed alcohol-serving establishments, the ordinance’s stance on skill games presents a notable deviation from the Pennsylvania State Police Bureau of Liquor Control Enforcement's (“BLCE”) previous classification of such games as unlawful gambling devices per se and also in violation of the Pennsylvania Liquor Control Board’s (“PLCB”) Advisory Notice No. 14 (“Advisory Notice”). This stance by the PLCB and BLCE led to the confiscation of skill games from licensees and subsequent fines with several cases on appeal.

The Philadelphia ordinance’s allowance for skill games in specific business settings subtly challenges the BLCE’s interpretation and the PLCB Advisory Notice, suggesting a legislative perception of these devices as legally permissible within licensed premises. This anticipated legal contention underscores the ongoing debate surrounding the legality and regulation of skill games within Pennsylvania’s broader legal framework.

In fact, Pennsylvania Gov. Josh Shapiro just made a recent parlay into this growing, billion-dollar business by announcing he supports a 42% tax on daily gross revenue from skill games as part of his annual budget address suggesting the Governor’s office would consider making such devices lawful.