From Philly and the Pa. suburbs to South Jersey and Delaware, what would you like WHYY News to cover? Let us know!
Rising taxes, the summer slowdown and a broken air conditioner that’ll cost at least $3,000 to fix have Shawn Anderson looking for every dollar he can find to keep the lights on and charitable activities going at the Ancient Order of Hibernians Division #39 in Tacony.
That’s why Anderson, president of the Irish Catholic fraternal organization, says it’s critical that state lawmakers come up with a way to let AOH 39 keep earning some money from a set of slot machine-like skill game terminals at its bar.
“It’s probably between $500 and $2,000, depending on the month. For us, it’s a lot,” he said. “Whether it’s $100, $200, $1,000, that money every month allows us to keep our building open. It allows us to help feed all the families during the holidays. It really helps us keep going.”
The state Supreme Court ruled in June that the estimated 70,000 skill game terminals in use around Pennsylvania are illegal slot machines under state law, and gave the legislature 120 days to create a regulatory framework for them.
If lawmakers don’t act by Oct. 13, social clubs, bars, gas stations and fire halls that have the machines must turn them off and could see them seized by state police. Multiple bills permitting the devices and taxing them at different rates have been proposed, but the legislature has yet to act.
Anderson and representatives of other affected establishments held a press conference at the Knights of Columbus hall in East Torresdale on Thursday, along with local politicians and video terminal manufacturers, to urge lawmakers to pass a bill before the court-imposed deadline.
“What I would ask everyone is to contact your legislator, tell them that this is important,” said Mike Barley, chief of public affairs at Pace-O-Matic, the Georgia company that produces many of the games used in Pennsylvania. “Tell them that we need action, and the time’s running out.”
Casinos vs. skill game makers
Pace-O-Matic wants lawmakers to pass bills sponsored by state Sens. Anthony Williams, D-Philadelphia, and Gene Yaw, R-Lycoming, and state Reps. Danilo Burgos, D-Philadelphia, and Rep. Jonathan Fritz, R-Susquehanna/Wayne, that would regulate the games and set a monthly, $500 per-terminal fee.
The sponsors say it would generate $300 million for the state in its first year.
Gov. Josh Shapiro has proposed a 52% tax rate on the devices, close to the 55% rate for casino slot machines. Senate Republican leaders have backed a 35% rate, and Yaw — whose district includes skill game maker Miele Manufacturing — has separately sponsored legislation that would impose a 16% tax rate.
The debate has pitted game manufacturers like Pace-O-Matic, which has lobbied fiercely for a lower rate, against casino interests, who see skill games as competition and want a higher rate. Barley and several others pointed out that revenue at the state’s casinos has been growing steadily and argued they faced no threat from skill games at small businesses and clubs.
“We’re not taking money from the casinos,” said Jeff Millay, chief operating officer at Miele, which builds machines for Pace-O-Matic at a facility in Williamsport. “We’re getting the guy that just got done working at the factory, who wants to stop by his local bar and have a beer. He wants to have a little bit of entertainment, so he puts a $20 bill in a machine and gets to have a little bit of fun. He’s not going to the casino.”
The gaming terminals have also been an issue in annual state budget negotiations. Shapiro has sought to increase funding for priorities like public schools and transit agencies through new taxes on skill games and legalized marijuana, while Republican leaders have accused him of overspending and rejected his proposals.
Shapiro wants to put the devices under the state’s existing rules on video gaming terminals. He would cap their number at 40,000 and limit establishments to five machines.
However, some of the governor’s allies have said the devices should remain illegal, or their use be highly restricted, because they sap resources from low-income communities and attract crime and nuisance behavior.