An Act providing for regulation of skill gaming; imposing duties on Department of Revenue; establishing a regulatory program within Department of Revenue governing skill gaming; providing for issuance of licenses; imposing criminal and civil penalties; and providing for zoning.

PRINTER'S NO. 1953
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1619
Session of
2025
INTRODUCED BY BENNINGHOFF, ARMANINI, BANTA, BARTON, BERNSTINE,
CAUSER, COOK, DELOZIER, ECKER, FLICK, FRITZ, HAMM, HEFFLEY,
IRVIN, JAMES, T. JONES, KAIL, KEPHART, KOZAK, KUTZ, MUSTELLO,
RIGBY, ROWE, SCHEUREN, SCHLEGEL, SMITH, STENDER, TWARDZIK,
WARNER AND WATRO, JUNE 16, 2025
REFERRED TO COMMITTEE ON GAMING OVERSIGHT, JUNE 17, 2025
AN ACT
Providing for regulation of skill gaming; imposing duties on
Department of Revenue; establishing a regulatory program
within Department of Revenue governing skill gaming;
providing for issuance of licenses; imposing criminal and
civil penalties; and providing for zoning.
TABLE OF CONTENTS
Chapter 1. Preliminary Provisions
Section 101. Short title.
Section 102. Definitions.
Chapter 3. Program
Section 301. Regulation of skill games.
Section 302. Distribution, operation and use of skill games.
Chapter 5. Licensure
Section 501. Licenses.
Section 502. Licensing requirements.
Section 503. Granting licenses.
Section 504. License application and renewal fees.
Section 505. Issuance of license.
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Section 506. Term of license.
Section 507. License renewal.
Section 508. Suspension or revocation of license.
Chapter 7. Certification Requirements
Section 701. Skill game testing.
Section 702. Reporting.
Chapter 9. Distributors
Section 901. Authorization to distribute skill games.
Section 902. System requirements.
Chapter 11. Operators
Section 1101. Duties of operators.
Section 1102. Reporting.
Chapter 13. Establishments
Section 1301. Authorization to use skill games.
Section 1302. Qualifications for establishments.
Chapter 15. Players
Section 1501. Authorization to play and receive winnings.
Section 1502. Winnings as compensation.
Chapter 17. Tax
Section 1701. Taxes on gross profits.
Chapter 19. Administration
Section 1901. Governing practices and procedures.
Section 1902. Law enforcement notification.
Chapter 21. Criminal and Civil Penalties
Section 2101. Criminal distribution and operation of unlicensed
skill games.
Section 2102. Criminal redemption of value to individual under
18 years of age.
Section 2103. Additional penalties.
Chapter 25. Miscellaneous Provisions
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Section 2501. Conflicts with other laws.
Section 2502. Zoning and use requirements.
Section 2503. Notice.
Section 2504. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
CHAPTER 1
PRELIMINARY PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the Skill Gaming
Act.
Section 102. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Applicant." A person that applies for authorization to
engage in an act or activity regulated under this act.
"Cash." United States currency or coin.
"Cash equivalent." An instrument with a value equivalent to
United States currency or coin, including certified checks,
cashier's checks, money orders or any other representation of
value as deemed a cash equivalent by the department.
"Controlling interest."
(1) In the case of a publicly traded entity, the holding
of sole voting rights under State law or under the entity's
governing documents that entitles the person to elect or
appoint one or more members of the board of directors or
other governing body, or the holding of an ownership or
beneficial interest in 5% or more of the entity's securities,
unless the presumption of control is rebutted by clear and
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convincing evidence.
(2) In the case of a privately held corporation,
partnership, limited liability company or other privately
held legal entity, the holding of securities in the entity,
unless the presumption of control is rebutted by clear and
convincing evidence.
"Department." The Department of Revenue of the Commonwealth.
"Distributor." An entity licensed by the department to sell,
lease, offer, provide or distribute skill games to an operator
for use or play in this Commonwealth.
"Entity." A domestic or foreign:
(1) business corporation;
(2) nonprofit corporation;
(3) general partnership;
(4) limited partnership;
(5) limited liability company;
(6) unincorporated nonprofit association;
(7) professional association; or
(8) business trust, common law trust or statutory trust.
"Establishment." An entity licensed by the department that
permits a licensed operator to place and operate skill games on
its premises under this act.
"Gross profits." The total amount of cash or cash
equivalents received by skill games, less the total amount of
cash or cash equivalents paid out to players as a result of
playing skill games.
"Independent testing laboratory." A nongovernmental entity
engaged in the business of examining skill game software and
capable of providing the certification required under Chapter 7.
"Initial license." A license issued by the department to an
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applicant under section 505 upon the applicant's first
submission of an application and payment of the initial license
fee under section 504(b).
"License." A license issued by the department under this act
that authorizes an entity to act as a distributor, operator or
establishment or to engage in any activity regulated under this
act.
"License application." The information required to be
submitted on a license application form as determined by the
department.
"Licensee." A person or entity that has been issued a
license by the department under this act, including a
distributor, operator or establishment.
"Operator." An entity licensed by the department to operate
skill games by:
(1) purchasing or leasing skill games from a licensed
distributor;
(2) placing skill games in licensed establishments; and
(3) performing on-site reporting, revenue collection and
data reporting as required under this act.
"Payout." The payment of cash or cash equivalents to a
player as a result of playing a skill game.
"Person." A natural person, corporation, partnership,
limited liability company, business trust, unincorporated
association, government entity not including the Commonwealth,
estate, trust or foundation.
"Player." An individual who is at least 18 years of age and
who plays a skill game.
"Principal." Any of the following:
(1) An officer.
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(2) A director.
(3) A person who directly holds a beneficial or
ownership interest in the securities of an applicant or
licensee.
(4) A person with a controlling interest in an applicant
or licensee, or who has the ability to elect a majority of
the board of directors of a licensee, or otherwise control a
licensee, lender or financial institution associated with an
applicant or licensee, other than a bank or lending
institution that extends a loan or holds a mortgage or lien
in the ordinary course of business.
(5) A person designated as a principal by the
department.
"Program." The regulatory program established under section
301(a) governing the distribution, sale, transportation, storage
and use of skill games in this Commonwealth.
"Renewal license." A license issued by the department to a
licensee under section 507 upon submission of a renewal
application and payment of the renewal license fee under section
504(c).
"Skill game." A game played on approved skill game software
that meets the qualifications established under Chapters 5 and 7
and is licensed by the department under this act.
"Skill game software." A distributor's proprietary software
program designed and developed for skill games and approved by
the department.
"Terminal identification number." A unique identification
number assigned to each skill game terminal.
"Terminal monitoring report." A report submitted by a
distributor to the department identifying the location and
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operation of each skill game, for the purpose of auditing and
information retrieval related to financial events occurring in
the course of operation, including data on location, coin-in,
coin-out, ticket-in, ticket-out and jackpots.
CHAPTER 3
PROGRAM
Section 301. Regulation of skill games.
(a) Establishment of program.--A program is established
within the department to regulate the distribution, operation
and use of skill games in this Commonwealth. The program shall
be implemented and administered by the department. For the
purposes of the program and this act, the department shall have
the following duties:
(1) Issue licenses to individuals or entities authorized
to distribute or make skill games available for public use in
this Commonwealth in accordance with this act and regulations
promulgated by the department.
(2) Establish regulatory and enforcement authority over
the program.
(3) Develop enforcement procedures.
(b) General authority.--The department shall have general
and exclusive regulatory authority over the distribution and use
of skill games under this act.
(c) Specific duties.--The department shall have the
following specific duties under this act:
(1) Require and conduct, or cause to be conducted,
criminal history investigations of applicants and licensees
under this act.
(2) For purposes of licensing, enforcement and
background investigations, receive information otherwise
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protected under 18 Pa.C.S. Ch. 91 (relating to criminal
history record information).
(3) Issue, approve, renew, revoke, suspend, condition or
deny the issuance or renewal of a license or approval under
this act.
(4) Require each licensee to submit periodic reports as
required by this act.
Section 302. Distribution, operation and use of skill games.
Notwithstanding any other provision of law, the distribution,
operation and use of skill games in accordance with this act are
authorized in this Commonwealth. A skill game shall not be
deemed to be any of the following:
(1) A lottery, gambling device, slot machine, device
intrinsically connected with gambling or coin-operated
amusement device.
(2) A game of chance as defined in section 103 of the
act of December 19, 1988 (P.L.1262, No.156), known as the
Local Option Small Games of Chance Act.
(3) A business operated in conjunction with another
licensed business under the act of April 12, 1951 (P.L.90,
No.21), known as the Liquor Code, or 40 Pa. Code § 3.52
(relating to connection with other business).
CHAPTER 5
LICENSURE
Section 501. Licenses.
(a) General authority.--The department shall have the
authority to issue licenses under this act.
(b) Skill game license.--An application period for initial
licenses shall commence 30 days after the effective date of this
subsection. A license issued under this subsection shall remain
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valid for a minimum of one year or until the department
establishes a schedule for annual license renewals.
(c) License criteria.--The issuance of a license by the
department shall be subject to the applicant's criminal history
record and other eligibility criteria established by regulation
of the department.
(d) License renewal.--An application to renew a license
shall be submitted to the department prior to the expiration
date of the current license.
Section 502. Licensing requirements.
An entity, including each principal holding a controlling
interest in the entity, that seeks licensure as a distributor,
operator or establishment shall be considered an applicant and
shall submit the following information with an initial or
renewal license application to the department:
(1) Valid government-issued identification, such as a
driver's license or passport.
(2) Naturalization documents or resident alien
identification, if applicable.
(3) Residential addresses for the previous five years.
(4) Employment history for the previous five years,
including dates of employment and the name and address of
each employer, to enable the completion of criminal history
and credit checks.
(5) A completed individual questionnaire provided by the
department for each principal residing outside of this
Commonwealth.
(6) Proof that the applicant has not been convicted of a
felony within the preceding five years.
(7) Proof of timely filing and payment of all Federal,
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State and local taxes.
Section 503. Granting licenses.
(a) Authorization.--The department may grant, deny, revoke
or suspend a license under this act.
(b) Determination.--In determining whether to grant or deny
a license, the department shall consider whether the applicant
is able to comply with all applicable laws of this Commonwealth
and regulations relating to the licensed activities.
(c) Nature of license.--The issuance or renewal of a license
under this act shall be deemed a revocable privilege and not a
right.
(d) Prohibition on multiple licenses.--An entity holding a
distributor license may not hold an operator or establishment
license. An entity holding an operator license may not hold a
distributor or establishment license.
(e) Appeals.--If the department denies a license
application, the applicant may file an appeal within 30 days
from the date the denial notice is mailed. The appeal shall be
filed with the Secretary of Revenue. A final decision by the
Secretary of Revenue may be appealed to Commonwealth Court.
(f) Prior operation not disqualifying.--The prior operation
of a skill game shall not serve as a basis for denying a license
under this act.
Section 504. License application and renewal fees.
(a) Payment required.--Application and renewal fees shall be
payable to the department at the time the application is filed.
(b) Initial license fees.--Initial license application fees
shall be nonrefundable. An initial license shall be valid for a
period of 10 years. The following fees shall apply:
(1) Skill game distributor: $50,000.
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(2) Skill game operator: $5,000.
(3) Skill game establishment: $250.
(c) Renewal license fees.--Renewal license application fees
shall be nonrefundable. A renewal license shall be valid for a
period of 10 years. The following renewal fees shall apply:
(1) Skill game distributor: $25,000.
(2) Skill game operator: $1,000.
(3) Skill game establishment: $250.
Section 505. Issuance of license.
A license issued by the department under this act shall be
effective for the period specified by the department and shall
include any information required by the department.
Section 506. Term of license.
(a) Initial license.--An initial license shall become valid
upon issuance by the department and shall remain valid for a
period of 10 years from the date of issuance.
(b) Renewal license.--A renewal license shall become valid
upon issuance by the department and shall remain valid for a
period of 10 years from the date of issuance.
Section 507. License renewal.
(a) Renewal application.--An application for renewal shall
include any information required by the department.
(b) Denial of renewal.--If the department denies a renewal
application, the department shall issue a written notice
specifying the reasons for the denial and identifying the
requirements the applicant failed to meet. The department may
request additional information from the applicant before making
a final determination. A final decision to deny a renewal may be
appealed to Commonwealth Court.
Section 508. Suspension or revocation of license.
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The department may suspend or revoke a license if the
licensee violates any provision of this act or any regulation of
the department adopted under this act.
CHAPTER 7
CERTIFICATION REQUIREMENTS
Section 701. Skill game testing.
(a) Certification.--Prior to an applicant obtaining a
license, a skill game shall be certified in accordance with this
subsection. The following shall apply:
(1) Before a distributor provides or distributes skill
game software that has not been approved as skill game
software by the department under this act, the distributor
shall submit to the department an engineering report and
technical opinion prepared in complete forensic detail by a
nationally recognized independent testing laboratory with
experience in the testing of skill game software. The testing
shall based solely on skill game software and adhere to
technical specifications that are independent of those used
for slot machines or video gaming terminals.
(2) The engineering report and technical opinion under
paragraph (1) shall comply with all of the following:
(i) Be restricted in scope to technical details only
and shall not constitute a legal opinion as to whether
skill or chance predominates in determining the outcome,
nor serve as a legal interpretation.
(ii) Be signed by a principal or executive officer
of the independent testing laboratory, whose signature
shall certify the contents of the report.
(iii) Include a written certification to the
department that the skill game meets all of the following
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criteria:
(A) The skill of the player, rather than chance,
is the predominant factor affecting the outcome of
the game.
(B) The prize outcome, whether for a single play
or over a session of gameplay, is such that it is
impossible to win the prize without the player
exercising skill during the main phases of gameplay.
(C) The skill game does not contain any hard-
coded minimum or maximum payout percentage.
(D) The skill game does not include reflexive or
compensating algorithms that make gameplay harder for
highly skilled players or adjust payout rates in
response to gameplay outcomes.
(E) The skill game maintains true and accurate
gameplay records, including a minimum 10-game recall
history and payout tracking with a minimum of 10
voucher recall entries. Accounting meters shall be at
least eight digits in length, with a minimum of six
digits to the left of the decimal.
(F) The skill game limits the price to play to a
maximum of $5 and the maximum winnings per individual
game to $5,000.
(G) The skill game displays the skill game
software version and list of hardware components of
the approved terminal in a clear and accurate manner.
(3) A skill game shall remain certified unless material
changes are made to the skill game software or hardware as
determined by the department.
(4) An applicant for a license as a distributor shall
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submit the applicant's skill game software in a manner
consistent with regulations promulgated by the department.
(5) A distributor shall certify compliance with the
requirements of this subsection to the department, and such
certification shall be made subject to 18 Pa.C.S. § 4904
(relating to unsworn falsification to authorities).
(b) Independent certification.--A nationally accredited
independent testing laboratory shall certify skill game software
in accordance with this act.
(c) Protection of intellectual property.--Nothing in this
act shall be construed to infringe upon, compromise or make
public any trademarked, copyrighted, trade secret or
confidential proprietary material. Any intellectual property or
related materials provided by a distributor to the department
for purposes of certification or inspection shall be deemed
confidential and shall not be subject to public access or
disclosure.
Section 702. Reporting.
(a) Monthly report.--A distributor shall submit a terminal
monitoring report for its licensed skill games. A monthly report
shall be filed with the department and shall include the
following information for the preceding month:
(1) A complete accounting of all revenue derived from
the operation of skill games in all establishments.
(2) Gameplay statistics, including total cash-in, cash-
out and the number of games played.
(3) The physical location of all skill games in the
possession of any distributor, operator or establishment in
this Commonwealth.
(b) Annual report.--By June 30 of each year, a distributor
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shall submit an annual report to the department for the
preceding calendar year that includes all of the following:
(1) The total number of skill games sold or leased to
operators.
(2) The number and type of skill games placed by
operators in each establishment.
(3) The total number of skill games in inventory as of
June 30, along with the terminal identification numbers for
each unit.
CHAPTER 9
DISTRIBUTORS
Section 901. Authorization to distribute skill games.
A distributor licensed by the department shall be authorized
to distribute skill games that comply with the requirements of
this act.
Section 902. System requirements.
(a) Currency acceptance.--A skill game shall be capable of
accepting currency and shall distribute winnings through
ejection of a bearer scrip, card or other medium approved by the
department. The bearer instrument shall be redeemable only for
cash at the establishment where the skill game was played.
Winnings shall be redeemed at a ticket redemption terminal or by
an attendant within the same establishment.
(b) Rules of play.--A skill game shall prominently display
the rules of play either on the game screen or on the terminal
housing.
(c) Placard display.--A skill game shall bear a placard,
displayed in a prominent location and in a conspicuous color,
stating:
This game is licensed by the Pennsylvania Department of
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Revenue and is NOT operated or maintained by the
Pennsylvania State Lottery. Players must be 18 years of
age or older to play.
(d) Distributor and operator information.--A skill game
shall display the name of the distributor of the terminal and
contact information for the operator, including a mailing
address and telephone number.
CHAPTER 11
OPERATORS
Section 1101. Duties of operators.
An operator shall have the following duties:
(1) Provide skill games approved by the department and
obtained from a licensed distributor.
(2) Distribute skill games to licensed establishments in
accordance with this act.
(3) Collect and report all skill game income and related
data to the distributor as required under this act.
Section 1102. Reporting.
An operator shall submit a terminal monitoring report to the
distributor. The distributor shall compile the information and
submit a monthly report to the department, which shall include
all of the following information:
(1) The terminal identification number of each skill
game in the operator's inventory and at each establishment.
(2) Any additional information required by the
department.
CHAPTER 13
ESTABLISHMENTS
Section 1301. Authorization to use skill games.
An establishment may use skill games obtained from licensed
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operators for public play and entertainment.
Section 1302. Qualifications for establishments.
(a) Eligibility.--Subject to subsection (b), skill games may
be operated at any of the following:
(1) An establishment licensed by the Pennsylvania Liquor
Control Board.
(2) An organization established under 26 U.S.C. § 501(c)
(relating to exemption from tax on corporations, certain
trusts, etc.).
(3) A business that sells age-restricted products, such
as tobacco, or that is qualified to be licensed by the State
Lottery.
(4) A business that submits a license application under
this act no later than 90 days after the effective date of
this paragraph. After the 90-day deadline, only an
establishment, organization or business meeting the criteria
under paragraph (1), (2) or (3) may operate skill games.
(b) Licensing requirement.--An establishment, organization
or business specified under subsection (a) shall be licensed by
the department to operate skill games.
CHAPTER 15
PLAYERS
Section 1501. Authorization to play and receive winnings.
It shall be lawful for an individual who is at least 18 years
of age to play a licensed skill game and to receive winnings in
the form of a bearer scrip, card or other medium approved by the
department, redeemable only for cash at the establishment where
issued.
Section 1502. Winnings as compensation.
A player's net winnings from the play of a licensed skill
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game shall be classified as compensation under section 303(1) of
the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
Code of 1971.
CHAPTER 17
TAX
Section 1701. Taxes on gross profits.
(a) Applicable taxes.--Gross profits from the operation of
skill games shall be subject to all applicable taxes, including
sales and personal income taxes under Articles II and III of the
the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
Code of 1971.
(b) Prohibition on local fees and taxes.--No additional
taxes or fees, including amusement taxes, shall be imposed on
the placement or operation of a skill game or on the revenue
generated by a skill game terminal unless specifically
authorized under this act.
CHAPTER 19
ADMINISTRATION
Section 1901. Governing practices and procedures.
The provisions of 2 Pa.C.S. (relating to administrative law
and procedure) shall apply to all actions of the department
under this act that constitute an adjudication as defined in 2
Pa.C.S. § 101 (relating to definitions).
Section 1902. Law enforcement notification.
Notwithstanding any provision of law, the department may
notify law enforcement agencies of information relating to a
violation or suspected violation of this act.
CHAPTER 21
CRIMINAL AND CIVIL PENALTIES
Section 2101. Criminal distribution and operation of unlicensed
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skill games.
(a) Penalties.--In addition to any other penalty provided by
law, a person commits a misdemeanor of the first degree if the
person:
(1) owns, operates, maintains, places into operation or
holds a financial interest in an unlicensed skill game, skill
game terminal or skill game software;
(2) offers or makes the unlicensed skill game available
to individuals to play or participate for direct or indirect
consideration, including consideration associated with a
related product, service or activity; and
(3) allows players to become eligible for a cash or cash
equivalent prize from playing the unlicensed skill game,
whether or not the prize's eligibility or value is determined
by or related to the outcome of or participation in the
unlicensed skill game.
(b) Forfeiture.--A skill game, skill game terminal or skill
game software that is owned, operated, maintained or placed into
operation in violation of subsection (a) shall be seized and
forfeited to the Commonwealth. The forfeiture shall be conducted
in accordance with 42 Pa.C.S. §§ 5803 (relating to asset
forfeiture), 5805 (relating to forfeiture procedure), 5806
(relating to motion for return of property), 5807 (relating to
restrictions on use), 5807.1 (relating to prohibition on
adoptive seizures) and 5808 (relating to exceptions).
Section 2102. Criminal redemption of value to individual under
18 years of age.
In addition to any other penalty provided by law, a person
commits a summary offense if the person provides value of any
kind to an individual under 18 years of age in exchange for a
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bearer scrip redeemable through an approved skill game terminal.
Section 2103. Additional penalties.
(a) Civil penalties.--In addition to any other remedy
available to the department, the department may assess a civil
penalty for any violation of this act, a regulation promulgated
under this act or an order issued under this act. The following
penalties shall apply:
(1) The department may assess a civil penalty of not
more than $25,000 for each violation and an additional
penalty of not more than $1,000 for each day the violation
continues. In determining the amount of each penalty, the
department shall consider all of the following:
(i) The gravity of the violation.
(ii) The willfulness of the violation.
(iii) Any prior violations by the person.
(iv) The economic benefit to the person resulting
from the violation.
(2) The department may issue a written warning in lieu
of a civil penalty to any person or entity that aids, abets,
counsels, induces, procures or causes another to violate this
act, a regulation promulgated under this act or an order
issued under this act.
(b) Sanctions.--
(1) In addition to any other penalty authorized by law,
the department may impose the following sanctions:
(i) Revoke or suspend the license of a person found
to have violated this act, a regulation promulgated under
this act or an order issued under this act.
(ii) Revoke or suspend the license of a person based
on conduct, activity or an event that would have
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disqualified the person from initially receiving the
license.
(iii) Order restitution of money or property
unlawfully obtained or retained by a licensee.
(2) A person who aids, abets, counsels, induces,
procures or causes another person to violate this act shall
be subject to the sanctions under paragraph (1).
(c) Cost of enforcement.--The department may assess the
costs of investigating a violation against a person found to be
in violation of this act.
(d) Insignificant violations.--Nothing in this section shall
require the assessment of a civil penalty or the imposition of a
sanction for an insignificant violation of this act if the
department determines that the public interest is adequately
served by the issuance of a written warning.
CHAPTER 25
MISCELLANEOUS PROVISIONS
Section 2501. Conflicts with other laws.
The manufacture, sale, distribution, possession and use of
skill games approved by the department in compliance with this
act shall not constitute a violation of any of the following:
(1) 4 Pa.C.S. Pt. II (relating to gaming).
(2) 18 Pa.C.S. § 5513 (relating to gambling devices,
gambling, etc.).
(3) The act of December 19, 1988 (P.L.1262, No.156),
known as the Local Option Small Games of Chance Act.
Section 2502. Zoning and use requirements.
(a) Requirements.--A distributor, operator or establishment
shall only be required to meet the same municipal zoning and use
requirements as other similar business types located within the
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same zoning district.
(b) Prohibitions.--A municipality may not:
(1) prohibit the placement or play of skill games; or
(2) enact zoning or land use restrictions that prohibit
the placement, use or play of an approved skill game in a
zoning district that permits any of the following:
(i) The sale of beer, wine or spirits.
(ii) The sale or play of State Lottery games at
commercial establishments.
(iii) Gaming or wagering conducted under 4 Pa.C.S.
Pt. II (relating to gaming).
Section 2503. Notice.
The department shall transmit a notice to the Legislative
Reference Bureau for publication in the next available issue of
the Pennsylvania Bulletin of the department's commencement of
licensing under this act.
Section 2504. Effective date.
This act shall take effect in 30 days.
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