Philly can enforce its ban on casino-style ‘skill games’ in convenience stores, a judge has ruled

A Philadelphia judge this week rejected an attempt to prevent the city from banning casino-style “skill games” that have sprung up in convenience stores across the city and that critics say attract crime.

Common Pleas Court Judge Sierra Thomas-Street on Monday denied an emergency request to stop the city from enforcing the law adopted by City Council earlier this year that bans the controversial and so-far-unregulated machines from stores.

The underlying lawsuit, which was orchestrated by the Georgia-based company Pace-O-Matic, a manufacturer of the consoles, will move forward, and the plaintiffs are appealing Thomas-Street’s ruling, the company’s attorney Matt Haverstick said.

The ruling was a win for detractors of the slot machine-style games that allow customers to pay for a chance to win a cash prize after completing a simple game, and for City Councilmember Curtis Jones Jr., who authored the law banning them at stores in Philadelphia.

But the case may not end up determining the fate of the machines because state lawmakers and the Pennsylvania Supreme Court are considering taking actions that could supersede the city’s law.

» READ MORE: A 7-Eleven franchise owner is suing Philly City Council over a bill to ban casino-style ‘skill games’

Jones, whose bill bans the games in stores but not bars, described the ruling a “small victory” and a first step toward cracking down on the games.

“What is fortuitous is the fact [the judge] said Philadelphia was within its rights to enforce this law and to regulate these machines,” Jones said. “We are now putting together a plan ... to come up with a fair process by which we can start to inform businesses that have these machines that this is their notice that they should cease and desist at this point.”

Haverstick said that despite the ruling, the ban is unlikely to ever be enforced. The games, he said, provide an important revenue stream for store owners, who get a cut of the proceeds and who often operate on thin margins. One of the plaintiffs in the litigation is a convenience store owner.

“The city knows this ordinance is unenforceable, and we’ve tried to work with the city to get Pace-o-Matic games out of nuisance locations,” Haverstick said. “But since the city won’t work with us, we’ll keep on with the litigation.”

Sam Scavuzzo, chief of staff in the city’s Law Department, said the city opposed the effort to stop implementation of the legislation because “there would be no undue hardship to owners and/or operators by enforcing the ordinance while the overall challenge to the ordinance was considered.”

The city will weigh its decisions as the case makes its way through the appeal process, Scavuzzo said.

Pennsylvania taxes and heavily regulates gambling games, such as casino slot machines. Makers of the so-called skill games that have sprung up in recent years contend that they are different because they involve a game of skill, such as a simple memory game, before customers can collect cash payouts.

Critics including the Pennsylvania attorney general’s office have long argued that the skill element is merely a veneer and that the games are actually illegal slot machines.

The Pennsylvania Supreme Court recently accepted a case that could answer that question.

Meanwhile, Gov. Josh Shapiro has proposed regulating the machines and creating a 42% tax on their sales, and Harrisburg lawmakers are considering that measure as part of state budget negotiations that are expected to wrap up in the coming days.

Jones said he supports state licensing and taxation of the machines but wants to ensure that Philadelphia has a role in regulating them. Much of the industry’s revenue in Pennsylvania comes from the city, he said, adding that “there’s a vast difference between a truck stop on Route 80 and Market Street in West Philly.”

“This is a game of chess,” Jones said. “[The state] should determine the tax rate, they should determine these skill games should be monitored, but give us some autonomy.”