Pennsylvania Skill Games Upended: Supreme Court Declares Skill Game Devices Are “Slot Machines” and Subject to Pennsylvania Gaming Laws and the Crimes Code

On June 15, 2026, the Pennsylvania Supreme Court issued one of the most significant gaming-related decisions in recent history, fundamentally changing the legal landscape for skill games throughout the Commonwealth.

For years, Pennsylvania businesses – including restaurants, bars, taverns, convenience stores, social clubs, gas stations, grocery stores, and other retailers – have operated skill game terminals under a series of court decisions that placed the devices in a legal gray area. In a sweeping opinion spanning more than 60 pages, the Supreme Court reversed that framework and held that the devices are subject to both Pennsylvania’s Gaming Act and the Crimes Code.

The Court nevertheless recognized that thousands of businesses relied upon prior court rulings and therefore imposed a 120-day stay before its decision takes effect.

For businesses that currently host skill games, the ruling creates immediate legal and operational questions.

What Did the Court Decide?

The Court reviewed two landmark Commonwealth Court decisions that had largely enabled the proliferation of skill games across Pennsylvania.

The first case, POM of Pennsylvania, LLC v. Department of Revenue, held that unlicensed skill games were not regulated by Pennsylvania’s Gaming Act. The second, In re Three Pennsylvania Skill Amusement Devices, held that the same devices were not prohibited by Pennsylvania’s criminal gambling laws.

The Pennsylvania Supreme Court rejected both conclusions, stating that the Commonwealth Court’s interpretation created an untenable legal loophole under which devices resembling slot machines could operate throughout Pennsylvania without licensing, taxation, or regulatory oversight. The Supreme Court concluded that Pennsylvania’s existing statutory framework already addresses these devices and that courts had improperly interpreted the law to avoid that result.

In perhaps the most consequential statement in the opinion, the Court held that skill games are subject to both the Pennsylvania Race Horse Development and Gaming Act and Section 5513 of the Crimes Code.[1]

Why the Court Rejected the “Skill Game” Argument

For years, manufacturers and operators argued that the devices differed from traditional slot machines because player skill could influence the outcome.

The Court acknowledged that prior cases relied upon Pennsylvania’s longstanding “predominant factor” test, which analyzes whether skill or chance primarily determines the outcome of a game. Earlier courts had accepted the argument that certain skill-related features embedded within the machines prevented them from being classified as gambling devices.

The Supreme Court took a different view.

The Court focused heavily on amendments enacted by the General Assembly in 2017. Those amendments expressly added the terms “skill slot machine” and “hybrid slot machine” to the Gaming Act’s definition of a slot machine.

Therefore, according to the Court, once the legislature specifically included skill-based and hybrid devices within the statutory definition of a slot machine, the ongoing debate over whether “skill” or “chance” was predominantly present no longer mattered for purposes of the Gaming Act. In the Court’s words, if a device qualifies as a “skill slot machine” or a “hybrid slot machine,” it is still a slot machine subject to regulation.

The Court repeatedly emphasized that this was not a policy decision about whether skill games are good or bad for Pennsylvania businesses. Rather, the Court viewed the issue as a straightforward exercise in statutory interpretation and concluded that the legislature had already spoken through the 2017 amendments that supplemented these definitions.

Implications for Establishments that Own, Operate or Lease Premises for  Skill Games Users?

The immediate takeaway is that businesses can no longer comfortably rely upon the legal framework that has permitted certain skill-related games to exist for the last several years.

The Court specifically noted that skill games have proliferated throughout restaurants, taverns, social clubs, convenience stores, gas stations, grocery stores, laundromats, pizza shops, and numerous other establishments. There have also been recent instances of established businesses whose sole business operation consists of offering skill games. Those businesses now face a dramatically changed legal environment.

In addition, businesses that are licensed by the Pennsylvania Liquor Control Board could face more scrutiny and enforcement actions. The PLCB’s regulations prohibit unlawful gambling from being directly or indirectly associated with any activity on the premises of an establishment holding a liquor license. (40 Pa. Code § 5.32(e)(2)). Section 471 of the Liquor Code empowers the Board to seek administrative sanctions, suspension, revocation, or fines for such violations, and the Board routinely invokes this section in enforcement actions based  on Crimes Code violations, including violations of Section 5513. 

Potential issues for operators include:

• Criminal enforcement under Pennsylvania’s gambling laws;
• Seizure and forfeiture of devices and proceeds;
• Regulatory scrutiny by Commonwealth agencies;
• Contract disputes involving vendors, distributors and landlords;
• Lease issues where gaming devices are located on leased premises; and
• Potential insurance and licensing concerns.

Importantly, businesses should not assume that risk related to this change in the law is limited to the device owner or direct user. The Crimes Code contains provisions aimed at d not only at manufacturers and distributors, but also at property owners, tenants, lessees, and occupants who knowingly permit premises to be used for unlawful gambling activity. Accordingly, landlords may not ignore the presence of skill game activity on their leased premises or could face criminal sanctions as a result. 

Is the 120-Day Safe Harbor Really Safe?

Recognizing that many businesses relied in good faith on prior court decisions, the Supreme Court stayed its ruling for 120 days. During that period, the Court directed that law enforcement agencies should not take adverse action against owners or operators based upon the decision.

This grace period is significant. It provides businesses with an opportunity to evaluate their exposure, review contracts, consult counsel, and monitor potential legislative developments.  However, the stay should not be viewed as a guarantee that the issue will simply disappear. To the contrary, the Court made clear that it believes existing law already governs the issue. In addition, it is unclear at this point what other consequences (i.e. tax, regulatory or otherwise) could arise for a business that opts to continue skill game use during the 120-day stay period.  

Could the Legislature Still Change the Outcome?

Yes.

One notable aspect of the opinion is the Court’s repeated invitation for legislative action. The Court emphasized that its ruling was based on existing statutes and that the General Assembly remains free to adopt a different policy approach, if preferable. The opinion effectively places the issue back in the hands of lawmakers.

For several years, competing legislative proposals have sought either to legalize and regulate skill games or to restrict them more heavily. The Supreme Court’s decision is likely to intensify those efforts. Whether the General Assembly can enact legislation before the expiration of the 120-day stay remains an open question. 

What Should Businesses Consider Doing Now?

Businesses that currently host skill games should act promptly to evaluate their legal risk and related options. Specifically, businesses should: 

1. Inventory all locations containing skill game devices and the quantities that are in their possession.
2. Identify and review agreements with current skill games vendors, distributors, and/or manufacturers.
3. Determine whether indemnification provisions exist to protect the operator and assess the scope of those provisions.
4. Evaluate lease provisions that may be implicated by gaming-related and/or illegal activity.
5. Monitor legislative developments closely to determine what position will be taken, if any.
6. Consult your attorney regarding operational, regulatory, and litigation risks.

Because the costs and requirements of obtaining a Gaming Act manufacturer, supplier, or slot machine license are substantial and are not designed for a small tavern or convenience store, most businesses that host skill game devices will not have a realistic path to lawfully continuing this specific revenue stream once the 120-day safe harbor ends.

Owners should use the safe harbor period to plan for the orderly removal of devices and ensure that any cash, receipts, or records related to the devices are properly documented in the event of a future audit or dispute with the Department of Revenue.

In the case of landlords whose tenants operate skill games, they should likewise review lease provisions concerning compliance with law, permitted uses, indemnification, and default remedies.  In the event a tenant is unwilling to cease their skill games offerings, even before the end of the 120-day stay period, landlords could be at an increased risk of criminal charges separate from any liability for the tenant businesses that operated the skill games.     

Conclusion

For years, businesses operated under the understanding that skill games occupied a unique legal category outside traditional gaming regulation because they were “skill-based”. The Supreme Court has now rejected that premise and concluded that Pennsylvania’s existing statutory framework already bars these devices.

The practical impact of the decision will depend in large part on what happens over the next 120 days. Legislative action remains possible, but unless the General Assembly intervenes, Pennsylvania businesses should prepare for a legal environment that immediately halts a business practice that has been increasing momentum over the last few years.

The full court opinion can be found HERE.

For any questions regarding how the Supreme Court’s decision may affect your business, feel free to contact Tucker Arensberg, P.C. attorneys Evan Pappas, Daniel Conlon, or Kevin Hall.

[1] https://www.palegis.us/statutes/consolidated/view-statute?TTL=18&DIV=00.&CHAPTER=055.&SECTION=013.&SUBSCTN=000