Pennsylvania lawmakers are preparing legislation that could determine whether skill game machines remain in operation after the state Supreme Court ruled that they fall under the state’s gambling laws. Rep. Russ Diamond of Lebanon County has proposed a framework that would regulate the machines while directing gaming revenue toward property tax relief and other state programmes.
The court has given the General Assembly until October 13 to address the issue. Without legislative action, skill games will become illegal on that date. The machines have operated in Pennsylvania’s legal grey area for more than a decade and have become common in small businesses and private organisations.
Diamond Sets Out Proposed Rules
Diamond’s plan would permit a maximum of five skill game machines at each qualifying location. Clubs, liquor-licensed restaurants and bars, along with eligible truck stops, could host the terminals. The proposal would place a 20% tax on skill game revenue.
Diamond also wants to reduce the tax rate applied to casino slot machines and online casino games to 49.9%. The proposal would establish a formula for distributing gaming revenue through an annual dividend intended to provide homeowners with more visible property tax relief.
The proposal would direct additional funding to the Race Horse Development Trust Fund and the state’s General Fund. It would also nearly double the amount available for gambling addiction treatment, according to Diamond’s announcement.
Property Tax Relief At Centre Of Proposal
Diamond said the plan could provide payments to 2.87 million qualified Pennsylvania homeowners. Even without growth in legal gaming or revenue from newly authorised skill games during the next fiscal year, each eligible homeowner would receive at least $702 annually.
In Diamond’s Lebanon County district, the additional tax abatement would range from $459 to $602 per year, depending on the school district. He said the gaming dividend would rise as legal gaming revenue grows and could increase property tax relief for 96% of Pennsylvania homeowners.
“Every time I talk about property taxes, people complain about not seeing the relief from casinos promised by politicians more than 20 years ago,” Diamond said. “This set of bills will increase property tax relief for 96% of Pennsylvania’s homeowners and deliver it directly into their hands. The amount of relief they receive will grow in direct proportion to the annual growth of all forms of legal gaming in the Commonwealth.”
The proposal follows years of disagreement over how skill games should be treated. Senate proposals have included tax rates of 35% and 16%, while another measure called for a $500 monthly fee per machine. Pennsylvania’s casino industry currently faces a 55% tax rate and has opposed skill games.
The Supreme Court’s ruling followed years of litigation over whether the machines fell outside the Gaming Act and the state’s general prohibition on unregulated gambling. The court stayed its decision for four months, giving lawmakers time to establish a new framework.
Gov. Josh Shapiro has also supported legalising and taxing skill games in his last two budget proposals. Legislative negotiations have yet to produce an agreement, leaving the October 13 deadline in place.
Source:
“Rep. Diamond proposes gaming reform to save skill games and boost tax relief”, penncapital-star.com, September 1, 2026
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