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US UNREGULATED GAMING - AGEM & AGA Campaign Spotlight on the current environment in Pennsylvania


Based on a 2014 ruling in Beaver County Common Pleas court, so-called “games of skill” have popped up everywhere in Pennsylvania. Unregulated machine companies often test the limits of the law by seeking a court ruling from those who often don’t understand the working mechanics of the unregulated machines.


The Pennsylvania ruling is indeed such an example and has now created momentum to stop the spread of the machines.


A subsequent ruling from the Commonwealth Court on Nov. 20, 2019, determined that Pennsylvania “games of skills” should be classified as slot machines licensed by the Pennsylvania Gaming Control Board (PGCB), though the ruling also noted the PGCB does not have jurisdiction over the bars and other locations where these games are installed.


To its credit, the Pennsylvania State Police responded in December by seizing the unregulated devices from five bars in Daupin and Cumberland counties and more raids were stalled by yet another legal challenge that has added to the confusion in the Commonwealth.


Glossary of terms


The AGA is encouraged that policymakers in some states such as Virginia have begun to recognize the dangers of these machines and have taken recent legislative action towards outlawing them. Unfortunately, other jurisdictions where these machines have become pervasive may believe their only recourse is to regulate and tax them. Bill Miller, President, CEO AGA


unregulated machines to proliferate and the corresponding negative consequences to rapidly multiply.


As an indication of the regulated industry’s cooperation on this effort, more than 20 professional gaming organizations have joined AGEM and the AGA in signing off on opposition to the spread of unregulated gaming, including the National Indian Gaming Association (NIGA), the North American Association of State and Provincial Lotteries (NASPL), the International Center for Responsible Gaming (ICRG), the National Council on Problem Gambling (NCPG), multiple state casino and tribal associations and both of the leading independent test labs that ensure quality and adherence in regulated markets around the world.


COAMS are coin operated amusement devices, which similar to 8-Liners are legal when operated consistent with State law, such as in Georgia, but which manufacturers and operators use illegally by making cash payouts instead of awarding limited value prizes of food and beverage.


GRAY GAMES refers to the entire family of unregulated machines – as in a “gray” legal area that opens the door for illicit activity that often starts with the message these “gray” games are legal under isolated interpretations. Regulated machines operate in a black and white legal environment.


NUDGE refers to machines with a feature where a player can touch the screen to move a symbol into a winning position, and are simply a variation on claims that the games include an element of “skill” that makes these games legal because they are not reliant entirely on “chance.”


PACHISLO also known as “skill stop” machines, are devices inspired by the Japanese machines of the same name, but have been modified in an attempt to present the games as legal in the US and oftentimes require special tokens for game play.


SWEEPSTAKES MACHINEs are devices that generally allow players to receive a coupon in exchange for money to redeem for merchandise online that creates credits for play on games that mimic slot machines.


SWEEPSTAKES PARLORS/INTERNET CAFES are an extension of the “sweepstakes” category, these unregulated locations generally have multiple computer screens and advertise and sell a product – oftentimes internet time or long-distance telephone minutes – that the player does not want, but the player also receives “bonus entries” that fund the game play that are claimed to conforms to local “sweepstakes” laws but not to applicable gambling laws.


SKILL-GAMES are machines billed as “skill” and are designed to circumvent local rules that prohibit “chance” games that not conforming to the regulations that govern casino slot machines. By adding a “skill” element, these machines companies claim their games are legal even though they remain unregulated and still include “chance” that players can never beat. These “skill” machines are not anything like “skill- based gaming” that is highly regulated in casino jurisdictions such as Nevada and New Jersey.


ZERO CHANCE/NO CHANCE GAMES are those that involve devices programmed in another attempt to circumvent State law prohibitions on “chance” games. “Zero chance” or “no chance” games also may include a feature that can reveal the outcome of the next play in advance, allegedly making them “skill” games that force players to make a decision to get to an outcome.


NEWSWIRE / INTERACTIVE / MARKET DATA P41


A subsequent ruling on Jan. 21, 2020 gave the go-ahead for State Police to resume seizing skill games. In typical fashion to foster confusion, the offending machine company made disingenuous claims in a press release after the ruling.


The offending company sought an order from the Court stopping seizures by the State Police of its machines and the court found that the offending company had not “met its burden of proving the injunction was necessary” and refused to grant the injunction. With the court expressly concluding that an injunction would be contrary to the public interest, the company lost and then tried to spin a story of victory in its a press release.


For its part, the PGCB has indicated its desire for the removal of unregulated machines that are negatively impacting the regulated casino market that has invested billions of dollars in jobs and quality gaming entertainment locations. Moreover, the Pennsylvania Legislature is poised to address this issue and a statewide campaign has emerged to stop the spread of these machines, with more information found at: www.PAAgainstIllegalGambling.com.


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