Pennsylvania lawmakers hear sharp split in Philadelphia over regulating, taxing “skill games”

State lawmakers, local officials, law-enforcement representatives and industry operators met at a West Philadelphia town-hall to debate a proposal in the governor’s budget to bring video “skill” gaming terminals under state regulation and tax them as video gaming terminals.

The discussion centered on two tensions: whether the Commonwealth should expand a VGT (video gaming terminal) tax and regulatory regime to machines that industry calls skill games, and how to limit public-safety and neighborhood harms while preserving small-business revenue.

The question arises in part because of recent court rulings: as State Sen. Sherry Street told the room, “Skill games are legal right now in Philadelphia and Pennsylvania.” The governor’s February proposal would have the Pennsylvania Gaming Control Board regulate games that involve skill, cap machines at five per facility and apply a 52% tax on gross terminal revenue; the presentation at the hearing reported an estimated combined revenue of about $368.9 million for fiscal 2025–26 (roughly $334.6 million in tax and $34.3 million in licensing fees) if implemented starting July 1, 2026.

Philadelphia officials and residents pressed for local discretion and stronger enforcement. Councilmember Curtis Jones Jr., describing corner-store changes in neighborhoods, said, “We are at a crossroads in the Commonwealth Of Pennsylvania and the city of Philadelphia. We have a revenue problem. We went from a surplus to a pending deficit.” He and others urged rules on machine placement near schools and ATMs, proximity limits between stores, and a “three strikes” standard that could suspend or bar operators with repeated violations.

Public-safety and nuisance-enforcement capacity were recurring themes. Assistant District Attorney Jim Delafura, who supervises the DA’s nuisance task force, urged legislation to include enforcement mechanisms and said residents could report problems to the DA’s nuisance hotline at (215) 686-5858. Several Philadelphia speakers and DA staff said enforcement currently involves multiple agencies (health, licensing, police) and can be slow; they suggested coordinated inspections and changes to appeal or renewal processes that could speed sanctions against repeat violators.

Industry representatives said they support regulation but warned that a 52% tax would cripple operations. Jeff Miller of Meeley Amusements said, “The 52% tax idea I believe came from what the casinos pay. But the casinos get to pay, get to keep 48%.” Paysomatic representatives said they already use age verification, compliance officers and voluntary limits in some markets; Gina Bosak, speaking for Paysomatic, said, “We want to work with you,” adding that Paysomatic uses camera systems in some jurisdictions and would provide lists of its machines in Philadelphia on request.

Speakers on both sides urged local reinvestment of revenues. Several representatives and community leaders proposed a community fund or local-share allocation to target neighborhood priorities — schools, youth programming, and transit support — instead of all revenues flowing only to the statewide general fund.

No formal votes or legislative actions were taken at the hearing. Multiple lawmakers said the Senate and the House would continue to negotiate language before any bill moves; Senator Street said she expected the Senate to move a bill and welcomed local input before votes. Industry representatives and local officials agreed to follow up with data exchanges and meetings on enforcement design and placement limits.

The hearing continued a months-long debate in Harrisburg over whether the Commonwealth should codify a regulatory and tax structure for machines many municipalities say already operate unchecked. Lawmakers on the Appropriations Committee said fiscal and enforcement details will figure prominently in negotiations ahead of June budget work and any bill drafting.