A Failure to Get (Stuff) Done
On October 14th thousands of skill game machines operating in VFW posts, American Legion halls and small businesses throughout Penn’s woods became illegal bringing to an abrupt halt a revenue stream used for a wide range of purposes from providing health care to employees to support for the local youth baseball team.
It was not a surprise. On June 15th the Pennsylvania Supreme Court ruled that skill machines are in fact gambling devices and therefore illegal under current Pennsylvania law. The high court stayed enforcement of its decision giving Governor Josh Shapiro and the state legislature time to implement legislation potentially legalizing, regulating, and taxing skill game machines.
Skill game legislation was not included in the package of bills in the 2026-2027 state budget agreement adopted in early July. The legislature then went into a summer recess which stretched until late September. Lawmakers returned to the capitol for several weeks of session before adjourning until after the November elections – without passing or even attempting to pass legislation governing skill games.
In addition to the usual divide between the Republican-controlled state Senate and the Democrat-controlled state House there are conflicting views withing each caucus on the way forward.
A key sticking point is the level of taxation. Casinos in Pennsylvania are taxed at a rate of 52%. There is some support in the legislature for that rate, but others propose a lower rate and/or a per machine licensing fee. Thus far a consensus has yet to emerge on a pathway forward. In the meantime, the court granted grace period has expired and skill games have become illegal.
Job and revenue losses have ensued and law enforcement action against those who fail to comply is inevitable. The legislature will not return until the second week of November – and then only for a few days as the 2025-2026 legislative session will expire at the end of the month.
Meanwhile the blame game is underway.
Governor Josh Shapiro infamously claims he “gets (stuff) done.” When something goes right in Pennsylvania, he is the proverbial rooster taking credit for the sunrise. When something goes wrong, or there is inaction, he blames either Donald Trump or the fact he must contend with a divided legislature.
It is hard to blame Donald Trump for this mess, instead the focus must be on president-in-waiting Governor Josh Shapiro whose ability to “get (stuff) done” appears to be limited to setting aside unneeded regulations to build a temporary interstate highway bridge.
Shapiro was unable, or unwilling, to even get an agreement from House and Senate Democratic caucuses on the issue let alone broker a deal with Republicans. Shapiro’s basic approach – as it is with all controversial issues – is I’ll sign legislation when it gets to my desk. He has abandoned his role in working with the legislature to get that legislation to his desk.
President Harry Truman had a sign on his desk in the oval office that said “The Buck Stops Here.” Shapiro’s desk is fly-over country. He will find fault with the legislature for the skill games debacle then refuse to take responsibility for his lack of leadership in the process.
There is another component to this debate, which is the profligate expansion of gambling, or the sanitized term, “gaming.” The legalization of gambling began with a plan to place slot machines in horse racing tracks to provide an additional revenue stream for the racing industry. Dubbed “racinos” that opened the door to stand-alone slots casinos, then table gaming was added, then satellite casino licenses were awarded. Most recently gaming has expanded to on-line platforms.
This all added to gaming industry profits but also plumped up state tax revenue and generated local impact funds which counties and municipalities have used for a variety of purposes. The gaming tax revenue stream was sold as a vehicle to provide property tax relief, but except for very small homestead reductions property tax owners have not benefitted in any significant way.
Governor Josh Shapiro included revenue from a potential skill game tax in his 2026-27 state revenue projects along with several other currently non-existent sources of funds. Once again, the commonwealth’s general fund, not property tax owners, would see the benefit.
There are those who opposed legalized gaming since the initial racino debate and who would be pleased to see skill game machines remain illegal and vanish from the menu of gambling options. To make that wish turn into a reality the governor and the legislature simply need to do nothing.
That is something state government is well equipped to accomplish.
(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal and American Radio Journal. His e-mail address is lhenry@lincolninstitute.org.)
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