Regulating skill games dividing Pa. lawmakers as budget talks drag on
HARRISBURG (TNS) — Fractures have developed among both Republicans and Democrats over the proposed taxing of skill games, even as top lawmakers see it as a crucial issue in negotiations for a state budget that already is a week overdue.
Senate President Pro Tempore Kim Ward of Westmoreland County said in a Monday interview that lawmakers have waited too long to put regulations and taxes on the tens of thousands of games that have popped up around the state. “They are multiplying like rabbits” and some of their operators “would never pass a background check,” she said.
Fellow Republican Sen. Jarrett Coleman of Lehigh County, however, in a separate interview blasted a Republican-backed bill to put a 35% tax on the games. “I can’t think of a time when raising taxes has worked out well for Republicans,” Coleman said.
There is a split in the Democratic Party, as well. Both chasms illustrate the challenges faced by budget negotiators working behind closed doors.
The deadline for a budget was June 30, but state leaders have said the absence of a budget will have no practical effect on operations for at least many weeks.
Gov. Josh Shapiro, a Democrat, on Monday praised the intensity of negotiators’ work through the holiday weekend.
“My team and I are actively engaged with the leadership of the House and the Senate,” Shapiro said.
During his public appearance in York County on Monday, Shapiro had harsh words for federal lawmakers who passed a massive reconciliation bill late last week that immediately was signed into law by President Donald Trump. He said hundreds of thousands of people will lose Medicaid coverage or SNAP benefits and 25 rural hospitals will be moved closer to shutting their doors.
The state, he said, will not be able to “backfill” the spending reduction by the federal government.
“We can’t fix this for them,” Shapiro said. “The consequences hang on them.”
Concerning skill games, there are an estimated 70,000 of the as-yet-unregulated machines across the state. Shapiro’s budget proposal included a tax rate of 52% that would help generate $369 million in new revenue.
Among multiple concepts produced in the Legislature is the Republican-filed bill in the Senate with a 35% tax rate and a Democratic-issued proposal in the House for a rate of 16%. And some lawmakers want no tax at all.
A member of the House Gaming Oversight Committee, Democratic Rep. Johanny Cepeda-Freytiz, on Monday said the tax rate in the governor’s proposal was too high. In her Berks County district, small businesses like bars and fire companies use the money to pay utility bills and other costs.
“If we tax them at 52%, there is no point in having them,” Cepeda-Freytiz said. “How would that work?”
Democratic Rep. Danilo Burgos of Philadelphia has issued a memo saying he will file a bill with a 16% tax rate. He said it could still bring in hundreds of millions of dollars in annual revenue.
The Republican-held Senate, he said, has not produced a bill that “puts the black market out of business.” Some of the games currently in use, he said, literally come in a black box and have not had the scrutiny given to one manufacturers’ games in a recent court case.
Republican Rep. Brad Roae of Crawford County said he won’t vote for any tax on the machines because “any tax at all is going to take money from the local areas and transfer it to Harrisburg.”
The top Republican on the House Gaming Oversight Committee, Rep. Russ Diamond of Lebanon County, said the chances of a skill games bill getting through appear to be “diminishing every day that goes by.”
On Monday, Ward said the skill games industry has been making tons of money and “getting a free ride.”
If budget negotiators can’t reach a deal this year, she said, it “just gets harder and harder” in the future.