Hangley Aronchick Lodges Successful Amicus Representation on behalf of Pennsylvania Casinos

In a major ruling, the Pennsylvania Supreme Court held on June 15 that cash-paying electronic game terminals with embedded skill features – so-called skill game machines – are unlawful slot machines subject to state gaming laws.

The highly anticipated decision brought new clarity to businesses throughout the Commonwealth, where the devices have become common fixtures in taverns, restaurants and corner stores.

Hangley Aronchick shareholders Mark Aronchick and Jason Levine successfully represented a group of Pennsylvania-based casino operators, arguing in amicus filings that the machines are slot machines under the Gaming Act and should be taxed and regulated to prevent the proliferation of uncontrolled gaming.

In a 66-page majority opinion, the justices held that the devices qualify as slot machines under both the Gaming Act and Crimes Code, which prohibit individuals and businesses from manufacturing, supplying or placing the machines without a gaming license.

“These conclusions are necessitated by the unambiguous language of the Gaming Act, and not any judicial interpretation of otherwise undefined terms,” Justice David Wecht wrote for the Court.

The justices stayed their ruling for 120 days, during which no law enforcement agency may take action against owners and operators of the machines. “We suspect the legislature may revisit whether skill games should be legalized, regulated, and taxed,” Jason explained, as the Court expressly stated that these issues are for the legislature to decide. “However,” Jason continued, the “General Assembly must be mindful of the Pennsylvania Constitution’s Uniformity Clause, which requires that all who provide the same goods or services pay the same tax.” Hangley Aronchick also represents twelve Pennsylvania casinos in a lawsuit before the Supreme Court challenging the lack of tax parity between skill games operators and the operators of licensed, regulated slot machines, who return over 50% of every dollar they generate from slot machines to the Commonwealth and local communities in taxes.