Covid Reignites Pennsylvania VGT Debate

The need for restaurants and bars to recover after the Covid-19 shutdown has renewed the debate over legalizing VGTs in Pennsylvania. Senate President Pro Tem Joseph Scarnati (l.) has received major campaign contributions from VLT route operator Golden Entertainment, which would benefit from a change in the law.

Lawmakers in Pennsylvania are reconsidering a bill to legalize video gaming terminals in the state’s bars and restaurants as tavern owners and restaurateurs struggle to recover from state-imposed shutdowns due to the Covid-19 pandemic.

Lobbyists for tavern owners, VGT manufacturers and route operators lobbied hard but were unable to get bar VGTs a place in the major gaming expansion bill signed into law in 2017. That law did add VGTs to truck stops, but the revenue and taxes those locations generate is a fraction of what would be possible with a VGT law in the style of Illinois or Montana. Ultimately, the casino lobby won out and VGTs were dropped from the bill.

Now, the issue is being revived both to help small businesses and to bring back some of the tax revenue lost to the brick-and-mortar casino shutdown.

“I think the expansion that we’re seeing is being pushed by the desire to kind of find another revenue source for the commonwealth,” Democratic state Senator Tim Kearney of Swarthmore told the Delco Times. “It’s been an issue that’s been batted around for years, and there’s all sorts of different definitions about what a ‘game of chance’ is and what the VGTs actually do and everything else, and there’s really strong feelings on all sides.”

Republicans controlling the state Senate also are pushing for a new VGT bill, a subject that has caused some controversy. Senate President Pro Tempore Joseph Scarnati has received significant campaign contributions from Golden Entertainment, one of the nation’s top route operators for VLTs.

With Golden standing to be one of the bill’s main beneficiaries, some lawmakers have criticized Scarnati’s push for an early vote on the VLT bill.

Proponents of VGTs say they would replace gray-area machines that have been unregulated in the bars for years, as well as addressing the so-called “skill machines” that are considered illegal in Pennsylvania by the courts, but proliferate due to well-financed manufacturers and a lack of enforcement.

VGT suppliers and operators are once again lobbying for the legislation. Rick Meitzler, CEO of Illinois-based slot and VGT supplier Novomatic Americas—and a board member of the Pennsylvania Video Gaming Association, VGT lobbying group, told the Times that the Illinois VGT industry has taken in $2 billion of revenue since 2009, and has helped small businesses produce anywhere from $40,000 to $500,000 annually in extra income.

“That really became a nice little added bonus to them that they could revitalize their bars, put some money into them, and it became a viable option for them,” Meitzler said. “And whatever their getting, the state’s getting the same, or about the same, so the state’s happy, bars are happy and obviously manufacturers like us are happy for providing games to a regulated market.”

Not unexpectedly, Pennsylvania’s casino licensees were among the first to oppose the new VGT push, which they say would include legalization of the unregulated “skill games” still flooding the market.

“We are shocked and alarmed by the persistent speculation that the General Assembly is considering an expansion of gaming to include both broad-based VGT gambling throughout communities and the legalization of currently illegal skill game slot machines that are being operated outside of our facilities,” 13 licensed casino owners and operators wrote in a letter last week to legislative leaders. “The legislature determined that such broad-based gaming expansion would have had a devastating impact on both Pennsylvania’s casinos and the Pennsylvania Lottery. This is even more true today.”