Pennsylvania casinos sue state to force skill-game tax

Some estimates say there are as many as 100,000 of the unlicensed slot-like games operating in the state. They are located at bars, gas stations, convenience stores, pizza parlours and other non-age-restricted locations. Some politicians support the games, saying they provide revenue to fraternal organisations and small businesses.

The main supplier of the games, Georgia-based Pace-O-Matic, has won a few court decisions reversing seizure of their machines. However, the Pennsylvania state attorney-general has appealed the latest decision to the state’s Supreme Court. The AG cites a 2017 law that defines skill-based games as slot machines.

Pennsylvania casinos say tax violates constitution

In the lawsuit, Pennsylvania casinos ask the high court to declare that the 54% slot tax established by the 2004 state gaming law violates constitutional guarantees designed to ensure that taxation is fair. The tax accounts for around $1bn in annual revenue to the state. That tax revenue goes to property tax relief and economic development.

“There is no basis for requiring licensed entities to pay about half of their slot machine revenue to the Commonwealth while allowing unlicensed entities to pay no tax on such revenue,” the casino owners argue in the lawsuit.

Operators: Give us a level playing field

The Pennsylvania casinos are asking the state Supreme Court to force the state to apply the same tax rate to skill games or to bar it from collecting taxes on slot machines. It has been a main argument of the operators that the games should be banned. At the least, they say, the state should create a level playing field for skill games and casino slots.

The state department of revenue and the state’s Gaming Control Board declined to comment on the lawsuit to the Associated Press.