Smokescreens and Slot Machines: Berks DA Calls for PA Legislative Action on Unregulated Gambling Devices – Play Pennsylvania

Enforcement of Pennsylvania law when it comes to gambling devices outside casinos ranges from sporadic and scattershot to non-existent.

That means there are tens of thousands of unregulated, unlicensed, and untaxed gambling devices across the Quaker State. Those machines are competing for dollars with the heavily-regulated and taxed legal gambling industry.

A cloud smokescreen might be more accurate has allowed the devices to populate Pennsylvania like toxic toadstools.

And thats the bigger issue, according to Berks County District Attorney John Adams.

The DA spoke exclusively toPlayPennsylvania earlier this week. In Adams view, the PA Legislatures complacency on acting on this issue is now the real problem facing the Commonwealth.

Their complacency on acting on this issue is a disservice to businesses and to the revenue source which could help the Commonwealth. Limbo is causing a monumental problem. To sweep this aside is not doing their duty. It is time for our legislature to act. It is time for the legislature to act, not to kick the can down the road.

Adams understands the confusion over the devices legality largely stems from a single 2014 court ruling, a ruling which has created a lingering legal smoke bomb.

But he adamantly contends that the bulk of the problem is the complete failure of the Pennsylvania Legislature.

Adams believes politicians have not done their jobs. They should have passed laws leading the state out of the haze by creating clear legislative guidelines.

I think hes right.

But instead, the PA Legislature has simply waffled.

Some lawmakers are pushing to regulate and tax the devices and make them expressly legal. Others are looking to ban them.

The Beaver County Common Pleas Court six years ago found that an element of skill was necessary to win the three games found on one seized device taken from a social club in Aliquippa, an economically pinched former steel mill town in Beaver County, near Pittsburgh.

The trial court also ruled that the skill element meant the games in question were therefore not games of chance, such as the licensed slots in casinos or the regulated VGTs video gaming terminals installed at some approved truck stops.

However, the court did not address the fact that the only approved machines licensed as casino slot games, and more recently VGTs licensed at truck stops, are considered legal under state gaming laws.

Also, the ruling involved exactly one style of wagering machine a particular model of a device known as Pennsylvania Skill. These games have a single distributor Miele Manufacturing of Williamsport, which which also goes by Pace-O-Matic, or POM of Pennsylvania. POM makes the machines using proprietary software from Pace-O-Matic in Georgia.

And then there is this seldom-discussed nuance: The outcomes of the skills games are based on coded software. Changing the software arguably means the game has changed. The court did not address how changing the coding could change its approval of the device.

With that favorable court ruling, Pennsylvania Skills sought and were granted a temporary injunction preventing the seizure of their machines, a task which primarily had fallen to the PA State Police.

But the unintended consequence of the muddied message conveyed by the injunction was all manner of gambling devices proliferated across PA.

More than 15,000and perhaps as many as 20,000unregulated and untaxed devices are scattered throughout the state in gas stations, bars, convenience stores, fraternal organizations, pizza shops, and even strip mall arcades. On the other hand, there are 24,000 slot machinesin casinos. The state regulates and taxes them, heavily.

A court in November 2019 labeled skill games as slot machines. Then, the enforcement injunction was lifted in January 2020.

Casino forces and manufacturers catering to casinos united in February to target the machines, attempting to clarify what is legal and what is not. A flurry of State Police enforcement actions also happened in February.

All of that finally prompted the Pennsylvania Gaming Control Board (PGCB) to get off the sideline and definitively call the POM machines illegal slot machines under the states gaming laws.

But then PA Attorney General Josh Shapiro further increasedthe ambiguity surrounding the unlicensed machines.

The states top law enforcement officer quietly shelved his offices enforcement efforts against gambling devices outside casinos earlier this year. Instead, Shapiro has decided to await either a court or legislative action.

Even now, six years down the road, the Beaver County court ruling remains under review in higher courts.

All of which has resulted in a landscape of murky legal mumbo jumbo and confusion, and a law enforcement bureaucracy too timid to act.

But not in every case.

Working in tandem with PA State Police, Berks DA detectives recently shut down an illegal, unlicensed slot casino in tiny Kenhorst Borough near Reading. At the 777 Casino in a strip mall, $67,768 in cashand57 unlicensed machines were seized. An investigation continues and charges are pending.

Strangely, local authorities had signed off on the operation, which had opened last December.

But underscoring the legal murk, Kenhorst had submitted a letter seeking guidance and an investigation by PA gaming regulators in late December.

The letter went unanswered.

Adams thinks the PGCBs failure to pass the letter along to the State Police shows some of whats wrong with laws and enforcement as they stand today.

They absolutely should have passed that letter to the State Police, the DA said.

A spokesman for the PGCB declined to comment, but they have made it clear previously that their jurisdiction only pertains to matters of legal gambling and they are not authorized to investigate gambling operations outside casinos or other regulated gaming facilities.

A State Police spokesman also declined comment. And so did Kenhorsts lawyer, Jill E. Nagy, though she did provide the letter.

All of this further muddies the question of which entities are in charge of investigation of and enforcement against unregulated devices.

Adams finds it particularly troubling thatnot a single PA legislative member has spoken to him since the raid on the illegal casino.

Call me. Tell them to call me! he said.

And while no legislative action has become law, casinos and POM are readying elbows as the PA budget season looms.

As it has previously, POM continues to try and distinguish itself from other wagering devices commonly found outside of regulated casinos in PA.

First, they held a press conference to showily point to a strip mall in Lancaster County which appears filled with unlicensed gambling devices, operated as Largo at 3071 Columbia Avenue in West Hempfield Township.

A state lawmaker had complained about the location eight years ago, with no apparent legal action taken.

POM, which employs Tom Marino, a former U.S. Attorney and former member of Congress, delivered a packet of information to Lancaster DA Heather L. Adams. She took office in January. A spokesman said the information and any past actions by the office are under review. POM presser images follow:

POM followed that up with a live-streamed press conference with just three viewers on Wednesday from the state capitol Rotunda, again trying to set themselves apart from other devices.

The family-owned company presented several supporters. They included two legislators, a charity leader, and a member of a non-profit service organization, calling for regulation and clarity in the law.

Meanwhile, Pete Shelly, the spokesman forPennsylvanians Against Illegal Gambling, said licensed casinos have drafted a letter opposing any legalization of any new devices. But not all 12 retail casinos have yet signed off on the language.

He said any move to legalize and license the devices operating outside casinos and truck stops would simply be rewarding bad behavior which is killing the lottery.

He also pointed to billions invested in casinos, the employment of more than 20,000 employees, and the tax revenue generated.

It doesnt matter what name is on the machine. They are illegal, said Shelly. And they should all be taken out of service, he added.

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Smokescreens and Slot Machines: Berks DA Calls for PA Legislative Action on Unregulated Gambling Devices - Play Pennsylvania