Pennsylvania: Supreme Court rules Banilla's skill games are not gambling devices and can legally operate

In a closely watched case, the Supreme Court of Pennsylvania on Tuesday declined to review a decision that allows certain "skill games" from Banilla Games to be operated in the state. That means the Commonwealth Court’s order that the machines be returned to their original owners will stand, and the machines can continue to operate.

Specifically, in July 2023, the Commonwealth Court of Pennsylvania agreed with a lower court that Banilla's Keystone Skill game machines were not gambling devices and, therefore, could be legally operated in the Commonwealth of Pennsylvania.

That case was one of two appeals before the Supreme Court regarding skill machines. The other, involving Banilla’s competitor Pace-o-Matic, is still awaiting a decision. Both cases were filed by the owners of businesses that hosted the machines. The devices in question bear a visual resemblance to slot machines but incorporate strategic decision-making that their manufacturers say exempts them from being considered gambling devices.

Pennsylvania's gambling laws, like most states in the US, contain the phrase "games of chance" in their formal definition of gambling. The state, which already has numerous forms of regulated gambling, has been trying to stamp out the gray market. Authorities raided the businesses in question and seized the machines and proceeds from their operations. The business owners then sued for the return of their property, arguing for the devices’ legality in the process.

The Commonwealth Court agreed with the plaintiffs both times. It ruled that Banilla and Pace-o-Matic had adequately demonstrated that their products qualify as “games of skill,” and not as illegal slot machines.

Background

In 2019 and 2020, the Bureau of Liquor Control Enforcement (BLCE) conducted undercover operations at several liquor-licensed establishments. BLCE seized eleven electronic skill game machines, ten of which were owned by Pinnacle Amusement and had been manufactured by Banilla Games. Pinnacle Amusement filed motions for the return of its skill game machines in the Luzerne County Court of Common Pleas and in other local courts where its machines had been seized.

In February 2022, the trial court held an evidentiary hearing and ultimately ruled in favor of Pinnacle Amusement— finding that the skill game machines did not constitute gambling devices per se and ordering the return of all of Pinnacle Amusement's seized machines. BCLE appealed that decision to the Commonwealth Court, which affirmed the trial court's decision. BCLE appealed again to the Supreme Court of Pennsylvania, which has now refused to hear BCLE's appeal.