JOHNSTOWN, Pa. (WJAC) — It's the multimillion dollar question that's facing lawmakers right now. If games of skill machines look like a slot machine and sound like a slot machine, are they a slot machine?
Steve Csehoski by day is a professor at Penn Highlands Community College. By night he runs 3C Amusements.
A few years ago, when looking to help his club buy a game of skill machine, the company he called placed a bet on him by asking if he’d be interested in opening a shop with the games in it. Csehoski went all in, opening his first 3C Amusements in Westmont, later opening a Richland location and is now close to opening a location in Vinco.
“Three years ago there wasn't a lot of them,” Csehoski said when talking about their rapidly growing popularity since his first parlor opened.
Csehoski said on a good night, his locations are packed with players winning thousands of dollars and he takes in thousands of dollars as well.
HOW THEY WORK
The games have bets and have spinning symbols and point amounts like you would see on a slot machine in a casino. The hook is that before you earn the cash, you must manipulate the game to follow a pattern to achieve the cash.
Since gambling requires there to be “consideration, chance, and a prize” involved. That little bit of skill means it’s just the same as fantasy sports or a sweepstakes.
Csehoski said the top jackpot he recalled paying out from one of his machines was $4,800.
In some games, it’s simply picking between two symbols. In others, it requires moving lines into the money line.
The “skill” is usually simple, but even the best players sometimes screw up and beginners can’t figure out the right move at first.
LEGAL LOOPHOLE
The courts further showed gambling laws didn’t cover the games in a 2014 decision in Beaver County that said the machines could not be seized by law enforcement under state gambling laws. That means the machines are not under the enforcement of the state’s regulatory agency and they are not subject to the state's 34 percent slots tax.
This loophole in other states has been handled differently. In Ohio, the games are now regulated by casino regulators.
In 2018, Colorado lawmakers settled a similar loophole by changing the laws for “simulated gambling” to include the Games of Skill machines, which included language about not allowing monetary prizes to allow arcades like Chuck E. Cheese's and Dave & Buster's to continue to exist. Some parlors went the non-monetary route, such as giving out silver bullions as prizes that could be exchanged elsewhere for cash, but for most it was game over.
DOLLARS AND SENSE
Critics in Pennsylvania say they were always meant to be illegal. After all, if it looks like a duck and quacks like a duck...
“Game of skill is just a cover,” said Sen. Tommy Tomlinson, R-Bucks County. “It's pretty common sense to know what gambling is.”
Tomlinson said Monday, at an event with lawmakers, leaders from the Pennsylvania Lottery, Pennsylvania State Police, and other agencies, that he is planning to introduce legislation to ban games of skill machines in the state. Under Tomlinson’s bill, it would be a criminal offense for anyone to knowingly make, assemble, maintain, lease or sell games of skill.
“They hang their hat on it takes skill to win,” Tomlinson said. “It takes skill to win at poker and it takes skill to win at blackjack.”
Another big issue is the loss of business for casinos and the lottery.
The Lottery has said it loses anywhere from $95 million to $138 million annually because of the Skill machines. Adding insult to injury, they say about 20 percent of their retailers have a skill game in their store.
“Funding for (our) programs are at risk because of these so-called skilled machines,” said Drew Svitko, Executive Director of the Pennsylvania Lottery. “These illegal machines are creating a huge risk for the older Pennsylvanians who rely upon the programs the Lottery funds.”
Not only does it impact ticket sales, but for their own gambling games, Keno and Xpress Sports. They also say one company that produces a majority of the machines in the state labels the games as “Pennsylvania Skill Games,” which gives a false sense that they are state-run equipment.
Csehoski said he wanted to add Keno into his businesses, but the lottery frowned upon the skill machines.
“I question why the lottery doesn’t go to their retailer who have the machines and tell them to take them out or we pull our lottery,” Csehoski said.
He also questions how much the lottery and casinos say they lose, saying many of his patrons either already frequent those options or would never consider them as options regardless. He also says the state gets its share because all the money is tracked and taxed to the appropriate local, state, and federal entities.
“I have a hard time buying their arguments,” Csehoski said.
WHAT’S NEXT?
Tomlinson revealed the legislation, Senate Bill 710, but it has not been formally introduced yet.
Csehoski said he has language in his leases that would allow him to close his locations without penalty should the law change, but said it would be a short-sighted mistake for what's quickly grown into a high stakes push for small business owners.
“I sponsor a lot of teams, I do basket parties, volunteer fire companies I always give them donations,” Csehoski said. “Obviously that would cease to exist.”
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