Is it skill? Or luck?

Are they legal or not?

The state’s highest court is poised to hear arguments this week in the long-simmering debate over whether slot-like games now available in bars and convenience stores around the state should be deemed legal because the results of play involve an element of skill rather than strictly chance.

The dispute has the casino industry and the state Lottery on one side and bar owners and the distributor of skill games on the other.

There are already in the neighborhood of 80,000 skill games operating around the state, according to industry estimates.

In their order agreeing to take up the appeal in the skill games dispute, the Supreme Court justices said they will focus their scrutiny on two questions:

Whether an electronic slot machine ceases to be an illegal game of chance “if the machine’s manufacturers embed into its programming a so-called ‘skill’ element that is almost entirely hidden from view and is almost impossible to complete?”

And whether the existing gambling statutes for slot machines should be used to govern the operation of skill games.

Commonwealth Court Judge Lori Dumas in 2023 upheld the ruling of a Dauphin County judge who had concluded that skill games seized from a bar were not the same as slot machines and should be deemed legal.

Expert testifiers had given conflicting perspectives on how much chance is involved in game play on the disputed devices. But there was consensus that some elements of the game involved skill.

The legal dispute has played out as lawmakers have been paralyzed over how and whether to formally legalize skill games play.

Gov. Josh Shapiro had urged lawmakers to pass legislation formally regulating the operation of skill games, but the budget deal he signed last week did not include that measure. Shapiro called for a tax of 52% of the gross revenue for skill games, which he projected would raise close to $370 million a year.

Senate Bill 1079, introduced last week, seeks to replace the originally proposed tax structure with a $500-per-skill-game-machine monthly fee. The bill’s sponsors, Sen. Gene Yaw, R-Lycoming and Sen. Anthony Williams, D-Philadelphia, say this approach would generate revenue almost immediately and provide about $300 million a year for the state.

Yaw had previously proposed a tax rate of 16% of the gross profits from skill game play.

Senate Bill 756, introduced in May by Sen. Chris Gebhard, R-Lebanon — with Senate President Pro Tem Kim Ward, R-Westmoreland, and Sen. Majority Leader Joe Pittman, R-Indiana, as cosponsors — would have set a tax rate of 35% of gross terminal revenue.

But with Senate Republicans divided over how to proceed, none of the bills to legalize and tax skill games moved in the General Assembly. As a result, the games have remained in operation untaxed and not generating revenue for the state.

Both the Pennsylvania Lottery and casino industry have argued that the proliferation of skill games has hurt their bottom lines, particularly by giving gamblers an alternative for in-person play.

On the other hand, proponents for legalizing skill games have repeatedly noted that the casino industry has been reporting record revenue, largely due to the exponential growth of online gambling that has more than compensated for the stagnant revenue from in-person play.

The Lottery reported that its profit was down $130 million in 2024-25 compared to the prior year. However, the Lottery still managed to generate more than $1 billion in profit. House Bill 1050 passed by the General Assembly in July and signed into law as Act 37 changes a profit mandate for the Lottery — reducing the required profit from 20% to 10%, a move proponents say will allow the Lottery to generate more total profit by offering larger prizes that attract more players.

In addition to the competition from skill games, the Lottery has also suffered due to the lack of attention-grabbing big jackpots in the major multi-state draw games. Draw games generated almost $300 million less revenue in 2024-25 than they did in 2023-24.