Pennsylvania Skill Games Supplier Sues Rival, Alleges ‘Illegal Gambling’ Devices Offered to Players

Pace-O-Matic, the maker of the “Pennsylvania Skill” brand of skill-games machines, is suing a rival in the lucrative but controversial Pennsylvania skill games market for allegedly offering illegal gambling.

Pace-O-Matic alleges that the games on offer at 3C Amusements, made by a different manufacturer, cross the fine line between skill game and gambling device, which renders them illegal under state law.

The lawsuit comes as several state lawmakers have argued that all machines, regardless of their provenance, cross that fine line and last month to ban them.

Currently, the State Court disagrees with this position. In 2014, it found that several Pace-O-Matic terminals seized by police could not be deemed illegal gambling devices because they were predominantly skill-based rather than chance-based.

The machines may look and sound like slots, but they include elements that require players to recognize intricate patterns to maximize their scores, for example, or bonus games with arcade-style shooting sequences that require skilled reflexes.

Under Pennsylvania law, for a machine to be classed as a gambling device, three elements must be present: (1) a “consideration,” i.e., a stake; (2) a “result that is determined by chance rather than skill; and (3) “reward,” i.e. a payout.

The court was convinced that Pace-O-Matic had removed enough of the second element to render its machines legal.

That doesn’t fly everywhere. Last month, Pace-O-Matic’s games, including some of those approved by the Pennsylvania court ruling, were banned in Virginia. Authorities in Colorado, Wyoming, and Idaho have also against skill-games machines.

Meanwhile, state Sen. Tommy Tomlinson (R-Bensalem) wants Pennsylvania to follow suit. He believes the machines exist only because of a “legal loophole” and has introduced a bill that would close it.

I drafted this legislation after learning the impact these machines have on the Pennsylvania Lottery,” Tomlinson told local NBC affiliate WJAC-TV last month. “I am concerned about the negative effect these unregulated, unlicensed, untaxed gambling machines have on unsuspecting players, youth and lottery funds, which support essential services for our senior citizens.”

Unsurprisingly, lottery officials have also railed against the machines, claiming they are losing $95 million in annual revenue because over 5,000 skill-games machines exist inside retail outlets that sell lottery tickets.

Pace-O-Matic’s lawsuit was announced by press release and the finer points of its case are not yet publicly accessible, but the company claims in its release that 3C is operating games that have been “ruled illegal.” This likely means it believes they do not comply with the 2014 state court judgment. The company also claims 3C is advertising itself as a “casino.”