Judge rules electronic skill game machines are legal

Feb. 28—In another win for the electronic skill game industry, a Monroe County judge recently ruled the devices are legal and barred prosecutors from presenting them as evidence in a criminal case.

Judge Jennifer Harlacher Sibum's ruling in favor of Pace-0-Matic, doing business as Pennsylvania Skill, marks at least the fourth time that a state judge determined the company's games and similar games owned by other firms are games of skill, not gambling devices.

Those rulings, including a Luzerne County judge's ruling in May, might impact pending civil and criminal cases in Lackawanna County involving the seizure of skill game machines from the Sinners Swing Gentlemen's Club in Mayfield.

"This is another tremendous victory for Pennsylvania Skill games ... and our Pennsylvania small business and fraternal partners," said Mike Barley, a spokesman for Pace-O-Matic, which owns the software that powers the devices that were seized in Monroe County.

At issue are video gaming terminals that patrons play in exchange for credits they redeem for cash. The machines, which are typically distributed by amusement companies, are located in bars, restaurants and other establishments. Profits are usually split between the amusement company and the businesses that host the machines.

Law enforcement agencies contend the games are illegal gambling devices because, they allege the likelihood of winning credits is determined predominantly by chance. The casino industry also adamantly opposes the games, arguing they pilfer its customer base. That hurts taxpayers since the casinos pay hefty taxes on their profits.

Attorneys for the skill games industry maintain the machines are not gambling devices because patrons exercise a level of skill in playing the games and, if they are skillful enough, have a chance to win in every round of play.

Matthew Haverstick, an attorney for Pennsylvania Skill, noted gaming machine owners and businesses that host the devices pay taxes on their profits. The games also provide critical revenue for small businesses, he said.

Locally, Bishal Mongar, manager of Hamro Grocery on Pittston Avenue in Scranton, said profits from the games are a lifeline. The grocery has four Pennsylvania Skill machines. Profits vary from a few hundred to a few thousand dollars each month, he said.

"After COVID, it's been a struggle for a little business like us," Mongar said. "The skill games are a help ... Even if it does not bring in a whole lot of money, every penny, every dollar, counts in helping keep us running."

Linda Hyzenski, manager of the American Legion Post 644 in Swoyersville, also said the machines are a lifeline for the club, which donates a large portion of its profits to various charitable causes.

"As a legion, we don't charge what a normal bar charges for a drink," she said. "With the cost to run a bar and the increase in the cost of beer, that is what keeps us afloat."

Both Mongar and Hyzenski are pleased to see the courts have ruled the games are legal.

In the Monroe County case, Sibum ordered county prosecutors to return Pennsylvania Skill game machines that were confiscated in raids at Smokin Joe's Tobacco and L&M Music Co. in Stroudsburg in 2021.

Sibum also barred prosecutors from introducing the machines as evidence in criminal cases against the two businesses and Miele Manufacturing, which constructs the machines, after finding prosecutors withheld and misrepresented evidence in seeking the search warrants.

Sibum did not issue a written opinion explaining her reasoning. In court papers, Haverstick alleged prosecutors failed to reveal at least two judges in other counties previously ruled the games were legal.

Attempts to reach Monroe County District Attorney E. David Christine Jr. for comment were unsuccessful.

In the Luzerne County case, Judge Fred Pierantoni ordered the Pennsylvania State Police Bureau of Liquor Control Enforcement to return several machines owned by Pinnacle Amusements that were seized in raids at several businesses in 2020. That ruling is now on appeal to the state Commonwealth Court.

In Lackawanna County, attorneys for JK Group of Companies LLC, which distributes skill games through the Pennsylvania Coin amusement company, cited Pierantoni's ruling in a motion seeking return of several machines seized from Sinners Swing Gentlemen's Club in 2021. That case remains pending.

The rulings also could potentially impact the criminal case against Robert E. Covington, co-owner of the club, who is awaiting trial on several charges, including that he paid out winners on the machines. Attempts to reach Covington's attorney, Gregory Pagano, for comment Tuesday were unsuccessful.

Contact the writer: tbesecker@timesshamrock.com; 570-348-9137; @tmbeseckerTT on Twitter.