HARRISBURG — An anticipated new bipartisan bill to extract revenue from tens of thousands of unregulated “skill games” across Pennsylvania will not be the first on the topic, but it will land in the thick of a revenue-sensitive and prolonged budget fight in the state Capitol.
A $500-per-month, per-machine fee would be assessed on tens of thousands of machines under the concept being pitched by Republican Sen. Gene Yaw of Lycoming County and supported by Democratic Sen. Anthony Williams of Philadelphia. Multiple earlier bills on the thorny subject employed a percentage-driven tax, rather than a fee.
In another twist, the bill will give Philadelphia power to quell problems with a rising tide of sketchy, skill-game-containing “stop and go” venues that sell alcohol and use candy to cater to children, based on separate interviews with both senators.
The bill will be filed soon, according to Yaw. The introduction will occur with the Capitol bitterly divided on partisan lines in a budget impasse that reached 116 days on Friday.
Yaw did not dismiss the possibility the bipartisan bill could improve the chances for a budget deal “if we get broad-based support, and bipartisan.” But he said somebody in the negotiations would have to “start listening.”
The impasse has halted billions of dollars in state payments to local entities, triggering employee furloughs, spending freezes and agency closures. Republicans and Democrats in the split Legislature are far apart in terms of raw spending: Republicans back a plan with about $47.9 billion, Democrats favor one at about $50.25 billion.
Getting serious about generating new revenue — including with skill games regulation — would indicate a seriousness about finishing the budget, Williams said.
Taxing the games and legalizing recreational marijuana were new revenue sources sought by Democratic Gov. Josh Shapiro in his February budget proposal. Bills to make each goal happen have so far failed to pass.
A skill games regulation bill Yaw introduced in April had a 16% tax rate and remains stuck in committee. Another Republican-backed Senate bill had a tax rate of 35%, and Shapiro’s original proposal put the rate at 52%, the same level already paid on slot machines and video game terminals.
About $300 million a year in revenue could be generated by the forthcoming bill, according to Yaw. Williams said it would solve several problems. It starts to fill the state revenue gap, removes illegal operators and reduces “predatory activity” in neighborhoods, he said.
“I want the general body to take it seriously and I want to move upon it quickly,” he said.
Pressure on lawmakers is coming from various sources including the casino industry; Pace-O-Matic, the main industry corporate player; and the many clubs, VFW posts, fire halls and bars that have the machines.
“We would look toward the lowest possible tax,” said Chuck Moran, spokesperson for the 350-member Pennsylvania Licensed Beverage and Tavern Association. Skills games, he said, have been “a lifeline for a lot of these places since they took away the exclusive right to sell six-packs.”
There isn’t even harmony within Yaw’s own caucus.
At least two Republican senators oppose the basic premise of the forthcoming bill.
“I am not for more taxes, for the most part,” said Republican Sen. Dawn Keefer of York County. She said it would be giving more money for the government to waste.
Sen. Jarrett Coleman of Lehigh County said he was willing to review the bill but, “I remain opposed to the creation of any new fees on small businesses and especially those that benefit our first responders and veterans.”
The fissure among Republicans was cited by a spokesperson for House Democrats, Beth Rementer. “Despite introducing a bill that has the apparent backing of their leadership, Senate Republicans have not shown the ability” to garner the 26 votes needed to pass a skill games bill in the chamber, she said.
But a spokesperson for Yaw said two other Senate Democrats besides Williams have endorsed the Yaw-Williams concept.
Estimates have put the number of individual skill games machines at 70,000 or even 80,000. Less than half of those, Yaw said, would meet the definition of “skill game” that emerged from court cases — that is, the player has the ability to control the outcome of the game.
“Why wouldn’t we do this? It’s out there. They’re not going away. They’ve been there a couple of decades,” Yaw said. “Why in the world wouldn’t we take advantage of generating a significant income off of them?”
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