Gov. Josh Shapiro (D) of Pennsylvania is urging the General Assembly to give him a measure to legalize and tax skill games for the second consecutive year.
Shapiro asked state legislators in Harrisburg to figure out a mechanism to tax and regulate skill games in his 2026–2027 Budget Address to the legislature.
The unlicensed gambling machines, commonly known as Pennsylvania Skill, can be found in small businesses such as vape shops, restaurants and bars, grocery stores, gas stations, and nonprofit organizations. Pennsylvania Lottery merchants make up a large number of these tiny enterprises. According to lottery administrators, skill games interfere with their business.
Shapiro's budget for the fiscal year is $53.2 billion, a 5.4% increase over 2025–2026. In order to avoid raising taxes, the rising Democratic star, who is regarded as a front-runner for the party's ticket in 2028, intends to use the state's rainy day fund. Legalizing adult-use cannabis and skill games, according to Shapiro, will also lessen the financial strain. The governor wants to raise K–12 education spending by more than 8% to $20.65 billion.
Skill games are similar to casino slot machines in appearance, sound, and functionality, but they vary in that the player must attempt to create successful paylines by tapping the screen. By winning "Follow Me," a skill-based game akin to Simon Says, the player can also influence their payment rate.
Regulation of Skill Games
In order to protect customers and create a revenue benefit, Shapiro believes it is long overdue for Pennsylvania to legalize the roughly 70,000 unregulated skill games that are now in operation throughout the commonwealth.
“What this budget does do is finally regulate and tax skill games and pass comprehensive cannabis reform. District Attorneys from across the Commonwealth are calling on us to regulate skill games and finally provide law enforcement with clear guidance,” Shapiro said.
"We’re putting our communities at risk and losing out on billions of dollars in revenue by doing nothing on both. Everyone knows we need to get this done. So, let’s come together and finally get it over the finish line,” Shapiro appealed.
According to the governor's budget, skill games and recreational marijuana may bring in almost $2 billion annually. Shapiro has suggested that the General Assembly enact regulations governing the operation of skill games and require a 52% state reduction in the machines' gross earnings.
The Compulsive and Problem Gambling Treatment Fund would receive the first $1 million in skill gaming taxes. The remaining funds would go to the General Fund after 10% of the talent tax was given back to the host counties and municipalities where the skill games are held.
Opposition to Skill Gaming
Pennsylvania's skill game companies, mainly Pace-O-Matic and Miele Manufacturing, seek to be subject to state regulations and taxes. This is also the case with the Pennsylvania Tavern and Players Association, an organization that advocates for the advantages skill games offer host businesses.
To ensure that the games continue to support small businesses, protect jobs, and keep costs low for consumers, the skill gaming interests contend that a substantially lower tax than Shapiro's proposal is necessary.