A new proposal to regulate Pennsylvania skill games has surfaced just weeks before an Oct. 13 deadline that could force thousands of machines out of legal operation.
State Rep. Russ Diamond circulated a co-sponsorship memo on Sept. 1, outlining a two-bill package that would tax and regulate skill games while reshaping parts of Pennsylvania’s broader gambling framework. He has not yet formally introduced the bill and is currently seeking co-sponsors.
The proposal is the latest attempt to solve a problem state lawmakers have failed to settle for years, now made urgent by a court-ordered clock most of the industry cannot ignore.
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Why There’s a Pennsylvania Skill Game Bill October 13 Deadline
The Pennsylvania Supreme Court ruled in June that Pace-O-Matic’s Pennsylvania Skill machines fall under both the state’s Gaming Act and its criminal gambling laws. That decision overturned lower court rulings that had let skill games operate outside the regulated gambling system entirely.
The court delayed enforcement for 120 days, until Oct. 13, recognizing that businesses had already built operations around the machines. It also explicitly gave lawmakers a window to pass regulation before that stay expires.
The Pennsylvania Gaming Control Board estimates between 70,000 and 100,000 skill game machines currently operate across the state, spread across convenience stores, gas stations, bars, and other businesses.
What’s in Diamond’s Proposal
Diamond’s first bill would tax gross terminal revenue from skill games at 20%. It would allow up to five machines at clubs, liquor-licensed restaurants and bars, and qualified truck stops, though the memo does not mention a statewide cap on total machines.
That location list is narrower than where skill games operate today, which includes convenience stores, gas stations, grocery stores, and tobacco shops. If enacted as written, many current host locations would fall outside the approved list.
The proposal would also raise the tax rate on casino slots and all online casino games to a flat 49.9%. Casino slots currently carry a 48% to 54% tax rate, while online slots are taxed at 54%, so the change would lower the online casino rate while adjusting land-based slots within their existing range.
Tax revenue would flow into the State Gaming Fund, with 79% earmarked for property tax relief, 13.25% to the General Fund, 6.75% to the Race Horse Development Trust Fund, and 1% to the Compulsive and Problem Gambling Treatment Fund. A second bill would set up the mechanism for distributing those payments.
Years of Skill Game Proposals Have Gone Nowhere
The table below lines up Diamond’s plan against other proposals lawmakers have floated in recent years.
| Proposal | Skill Game Tax Rate | Other Terms |
| Rep. Russ Diamond (Sept. 2026) | 20% | Up to 5 machines at clubs, bars, and truck stops; no statewide cap mentioned; raises online casino tax to 49.9% |
| Gov. Josh Shapiro (latest budget) | 52% | 40,000 statewide machine cap; 5-machine limit per location |
| Earlier legislative proposal | 16% | Alternative to higher tax rates floated in past sessions |
| Separate flat-fee proposal | N/A | $500 monthly fee per machine instead of a revenue tax |
| Rep. Ben Waxman (HB 2557, May 2026) | No tax rate set | Focuses on consumer protections: monitoring, ID checks, self-exclusion, loss limits |
Source: Gambling Insider reporting on Pennsylvania legislative proposals, September 2026.
Gov. Josh Shapiro has proposed regulating skill games in his last two budget proposals, most recently backing a 52% tax rate alongside a 40,000-machine statewide cap. Other lawmakers have floated a 16% tax or a flat $500 monthly fee per machine instead.
Rep. Ben Waxman introduced a separate bill in May focused on consumer protections such as centralized monitoring, player identification, self-exclusion, age verification, and loss limits, without setting a tax rate at all.
Despite the added pressure of a court deadline, lawmakers left skill game regulation out of the $50.8 billion FY 2026/27 budget Shapiro signed in July.
Why Diamond’s Broader Package Faces an Uphill Climb
Diamond’s proposal goes beyond skill games alone, seeking changes to Pennsylvania’s wider gaming tax structure at the same time. Reports from the Capitol point to skepticism that lawmakers can agree on a package this broad when they have already failed to resolve skill games on their own.
For players who already use Pennsylvania’s licensed online casinos, the proposed 49.9% tax rate on online casino games is worth watching, since tax changes at this scale can eventually influence bonus structures and game offerings.
With the Oct. 13 deadline approaching fast, lawmakers face pressure to act on skill games specifically, even if Diamond’s more sweeping package stalls.
FAQs
What is the Pennsylvania skill game bill October 13 deadline about?
The Pennsylvania Supreme Court ruled in June 2026 that skill games fall under the state's gambling laws, but delayed enforcement for 120 days until Oct. 13 to give lawmakers time to pass regulation. Without new legislation, tens of thousands of machines could face enforcement under existing gambling law.
What tax rate does Rep. Russ Diamond's skill game bill propose?
Diamond's proposal sets a 20% tax on gross terminal revenue from skill games. It also proposes raising the tax rate on casino slots and online casino games to a flat 49.9%, changing rates that currently range from 48% to 54% depending on the game type.
How many skill game machines are currently in Pennsylvania?
The Pennsylvania Gaming Control Board estimates between 70,000 and 100,000 skill game machines operate across the state. They are currently found in convenience stores, gas stations, grocery stores, tobacco shops, bars, and other businesses.
Has Pennsylvania tried to regulate skill games before?
Yes. Gov. Josh Shapiro has proposed regulating skill games in his last two budget proposals, most recently backing a 52% tax with a 40,000-machine statewide cap. Other lawmakers have proposed a 16% tax or a flat monthly fee, but no proposal has passed as of September 2026.
What happens if Pennsylvania lawmakers miss the October 13 deadline?
If lawmakers fail to pass new regulation by Oct. 13, the Pennsylvania Supreme Court's ruling classifying skill games under existing gambling and criminal law takes full effect. That could expose unregulated skill game operations to enforcement under the state's Gaming Act.
Why does Diamond's proposal also affect online casino tax rates?
Diamond's package addresses Pennsylvania's broader gaming tax structure, not just skill games. It proposes a flat 49.9% tax rate on casino slots and all online casino games, replacing the current 48% to 54% range for land-based slots and the 54% rate applied to online slots.
