- The manufacture, set up, sale, lease, or ownership of a 'slot machine' for gambling purposes is illegal under the Pennsylvania Crime Code, Title 18 Section 5513, and these machines are subject to forfeiture under the law. 'We know that illegal slot machines and full-blown illegal casinos are popping up all over Pennsylvania.
- Of slot machines under section 1103 of the Gaming Act, 4 Pa.C.S. §1103, and that it has violated the Gaming Act by manufacturing slot machines without a manufacturer’s license. (Counterclaim ¶¶25-27, 29-30.) Similarly, the Department contends that POM is a supplier of slot machines under the Gaming Act and that POM has violated.
- State Laws for legal Slot Machine Ownership GAMBLING DEVICE. You must understand that using a slot machine for profit or gambling purposes is illegal and could subject you to severe penalties. Before purchasing a slot machine you must understand that every state does not allow ownership of these machines. However, we suggest that you check.
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Enforcement of Pennsylvania law when it comes to gambling devicesoutside casinos ranges from sporadic and scattershot to non-existent.
That means there are tens of thousands of unregulated, unlicensed, and untaxed gambling devices across the Quaker State. Those machines are competing for dollars with the heavily-regulated and taxed legal gambling industry.
A cloud – smokescreen might be more accurate – has allowed the devices to populate Pennsylvania like toxic toadstools.
And that’s the bigger issue, according to Berks County District Attorney John Adams.
Legal smokescreen for illegal gambling devices
The DA spoke exclusively to PlayPennsylvania earlier this week. In Adams’ view, the PA Legislature’s “complacency on acting on this issue” is now the real problem facing the Commonwealth.
“Their complacency on acting on this issue is a disservice to businesses and to the revenue source which could help the Commonwealth. Limbo is causing a monumental problem. To sweep this aside is not doing their duty. It is time for our legislature to act. It is time for the legislature to act, not to kick the can down the road.”
Adams understands the confusion over the devices’ legality largely stems from a single 2014 court ruling, a ruling which has created a lingering legal smoke bomb.
PA Legislature faulted
But he adamantly contends that the bulk of the problem is the complete failure of the Pennsylvania Legislature.
Adams believes politicians have not done their jobs. They should have passed laws leading the state out of the haze by creating clear legislative guidelines.
I think he’s right.
But instead, the PA Legislature has simply waffled.
Some lawmakers are pushing to regulate and tax the devices and make them expressly legal. Others are looking to ban them.
Legal ruling became a large fig leaf for all devices
The Beaver County Common Pleas Court six years ago found that an element of skill was necessary to win the three games found on one seized device taken from a social club in Aliquippa, an economically pinched former steel mill town in Beaver County, near Pittsburgh.
The trial court also ruled that the skill element meant the games in question were therefore not games of chance, such as the licensed slots in casinos or the regulated VGTs – video gaming terminals – installed at some approved truck stops.
However, the court did not address the fact that the only approved machines licensed as casino slot games, and more recently VGTs licensed at truck stops, are considered legal under state gaming laws.
Also, the ruling involved exactly one style of wagering machine – a particular model of a device known as Pennsylvania Skill. These games have a single distributor – Miele Manufacturing of Williamsport, which which also goes by Pace-O-Matic, or POM of Pennsylvania. POM makes the machines using proprietary software from Pace-O-Matic in Georgia.
And then there is this seldom-discussed nuance: The outcomes of the skills games are based on coded software. Changing the software arguably means the game has changed. The court did not address how changing the coding could change its approval of the device.
Injunction led to the spread of devices
With that favorable court ruling, Pennsylvania Skills sought and were granted a temporary injunction preventing the seizure of their machines, a task which primarily had fallen to the PA State Police.
But the unintended consequence of the muddied message conveyed by the injunction was all manner of gambling devices proliferated across PA.
More than 15,000 and perhaps as many as 20,000 unregulated and untaxed devices are scattered throughout the state in gas stations, bars, convenience stores, fraternal organizations, pizza shops, and even strip mall arcades. On the other hand, there are 24,000 slot machines in casinos. The state regulates and taxes them, heavily.
Devices labeled slot machines and injunction lifted
A court in November 2019 labeled skill games as slot machines. Then, the enforcement injunction was lifted in January 2020.
Casino forces and manufacturers catering to casinos united in February to target the machines, attempting to clarify what is legal and what is not. A flurry of State Police enforcement actions also happened in February.
All of that finally prompted the Pennsylvania Gaming Control Board (PGCB) to get off the sideline and definitively call the POM machines illegal slot machines under the state’s gaming laws.
But then PA Attorney General Josh Shapiro further increased the ambiguity surrounding the unlicensed machines.
The state’s top law enforcement officer quietly shelved his office’s enforcement efforts against gambling devices outside casinos earlier this year. Instead, Shapiro has decided to await either a court or legislative action.
Even now, six years down the road, the Beaver County court ruling remains under review in higher courts.
Legal mumbo jumbo and confusion
All of which has resulted in a landscape of murky legal mumbo jumbo and confusion, and a law enforcement bureaucracy too timid to act.
But not in every case.
Working in tandem with PA State Police, Berks DA detectives recently shut down an illegal, unlicensed slot casino in tiny Kenhorst Borough near Reading. At the 777 Casino in a strip mall, $67,768 in cash and 57 unlicensed machines were seized. An investigation continues and charges are pending.
Clear guidance is hard to come by
Strangely, local authorities had signed off on the operation, which had opened last December.
But underscoring the legal murk, Kenhorst had submitted a letter seeking guidance and an investigation by PA gaming regulators in late December.
The letter went unanswered.
Adams thinks the PGCB’s failure to pass the letter along to the State Police shows some of what’s wrong with laws and enforcement as they stand today.
“They absolutely should have passed that letter to the State Police,” the DA said.
A spokesman for the PGCB declined to comment, but they have made it clear previously that their jurisdiction only pertains to matters of legal gambling and they are not authorized to investigate gambling operations outside casinos or other regulated gaming facilities.
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A State Police spokesman also declined comment. And so did Kenhorst’s lawyer, Jill E. Nagy, though she did provide the letter.
Legislative laissez-faire
All of this further muddies the question of which entities are in charge of investigation of and enforcement against unregulated devices.
Adams finds it particularly troubling that not a single PA legislative member has spoken to him since the raid on the illegal casino.
“Call me. Tell them to call me!” he said.
Elbows out on both sides
And while no legislative action has become law, casinos and POM are readying elbows as the PA budget season looms.
As it has previously, POM continues to try and distinguish itself from other wagering devices commonly found outside of regulated casinos in PA.
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First, they held a press conference to showily point to a strip mall in Lancaster County which appears filled with unlicensed gambling devices, operated as Largo at 3071 Columbia Avenue in West Hempfield Township.
A state lawmaker had complained about the location eight years ago, with no apparent legal action taken.
POM, which employs Tom Marino, a former U.S. Attorney and former member of Congress, delivered a packet of information to Lancaster DA Heather L. Adams. She took office in January. A spokesman said the information and any past actions by the office are under review. POM presser images follow:
POM held a press conference in Harrisburg
POM followed that up with a live-streamed press conference – with just three viewers – on Wednesday from the state capitol Rotunda, again trying to set themselves apart from other devices.
The family-owned company presented several supporters. They included two legislators, a charity leader, and a member of a non-profit service organization, calling for “regulation and clarity in the law.”
Casino response like herding cats
Meanwhile, Pete Shelly, the spokesman for Pennsylvanians Against Illegal Gambling, said licensed casinos have drafted a letter opposing any legalization of any new devices. But not all 12 retail casinos have yet signed off on the language.
He said any move to legalize and license the devices operating outside casinos and truck stops would simply be “rewarding bad behavior which is killing the lottery.”
He also pointed to billions invested in casinos, the employment of more than 20,000 employees, and the tax revenue generated.
“It doesn’t matter what name is on the machine. They are illegal,” said Shelly. And they should all be taken out of service, he added.
Pennsylvania first launched legal casino gambling in 2006 when the first legal slot machines opened up at racetrack and casino properties across the state.
Since then, 12 legal gambling operations opened their doors, and a 13th is currently under construction in Philadelphia.
The original authorization for slot operations came from Pennsylvania’s Racehorse Development and Gaming Act, which was signed into law on July 5, 2004. In fact, the act created the Pennsylvania Gaming Control Board (PGCB) to oversee casino gambling in the state. Plus, it also created three categories of casino licenses governing gambling operations.
Category 1 licenses are for the state’s existing racetracks.
Category 2 licenses for stand-alone casino operations.
Category 3 licenses are for resort casinos.
In 2010, lawmakers amended the Act to allow for the operation of table games inside all three types of licensed facilities.
Plus, in 2017, the state passed a comprehensive gambling expansion package. It authorized the issue of online gambling licenses. Plus, this new set of laws created a fourth casino license category for satellite, or mini-casinos, across the state.
Here’s a look at the now four types of land-based PA casino licenses and exactly what each authorizes:
Category 1 – Racinos
Category 1 casino licenses were designed to help bolster the state’s struggling horse racing industry. The state’s existing racetracks were invited to apply for these Category 1 licenses and turn their horse racing facilities into a combination racetrack/casino known widely as a racino. The state planned to award no more than seven Category 1 licenses.
Each license permits the racetrack facility to host as many as 250 table games and 5,000 slot machines.
Six racetracks applied for Category 1 licenses and were approved. The list of currently operating Category 1 licensed Racinos in the state includes:
In order to apply for the license, existing racetracks were required to host live racing for at least two years prior. In order to keep it, live racing must occur at the property at least 100 days every year.
If a new racetrack property wants to apply for a Category 1 license, it must host live racing for a minimum of 150 days by its second year.
Category 2 – Stand-alone casinos
Category 2 licenses are for classic casino operations. There are currently five Category 2 licenses in the state. These are the four that are open:
The state granted a Category 2 license to Stadium Casino LLC. This entity is a partnership between Cordish Cos. and Parx Casino and racing owners Greenwood Gaming & Entertainment Inc. They are currently building a casino complex in South Philadelphia’s sports stadium district. The complex should open in 2020.
Category 2 license holders can operate the same 250 table games and 5,000 slot machines the state’s Category 1 license holders can. They can also offer major resort amenities, including restaurants, spas, and entertainment.
However, Category 2 licensees are not permitted to operate hotels directly connected to the casinos. Although, hotels may be built elsewhere on the property.
Category 2 licensees must build casinos in major cities or tourist areas. Additionally, they must be outside of a 30-mile radius of any Category 1 Racino.
Category 3 – Resort casinos
Category 3 licenses are for resort casino properties. The law authorizes the state to issue three of these licenses. So far, there are only two Category 3 casinos. These are:
Gaming options are restricted to 600 slot machines and 50 tables. However, these are the only gaming facilities that can have attached hotels.
Initially, casino players had to either be hotel guests or pay a fee to use the property’s amenities. However, as a part of the state’s 2017 gambling expansion, Category 3 licensees could pay a $1 million fee to remove the amenity fee provision.
Category 3 licensees can now also pay another $1 million to add an additional 15 table games and $2.5 million to add up to 250 slot machines.
Category 4 – Satellite Casinos
The comprehensive gambling expansion laws passed by PA legislators in October 2017 authorized the issue of up to 10 Category 4 satellite casino licenses
These mini-casinos can operate anywhere from 300 to 750 slot machines and up to 30 table games. Properties can add 10 more table games after the first year of year of operation.
Satellite casino sites cannot be within 25 miles of one of the state’s existing Category 1, 2, or 3 casino license holders. However, its these license holders that got the first chance to procure the licenses and build the casinos.
PGCB is now in round two of auctions for Category 4 licenses. The first round began in January 2018, resulting in four accepted bids:
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- Mountainview Thoroughbred Racing Association, LLC, operators of Hollywood Casino at Penn National Race Course, bid $50,100,000 to build in the Borough of Yoe in York County.
- Stadium Casino, LLC, the group in the middle of construction on a second Philadelphia casino, bid $40,100,005 to build in Derry Township in Westmoreland County.
- Mount Airy #1, LLC, operator of the Mount Airy Casino Resort, bid $21,188,888.88 to build in the City of New Castle in Lawrence County.
- Greenwood Gaming and Entertainment Inc., which operates Parx Casino, bid $8,111,000 to build in South Newton Township in Cumberland County.