Shapiro Wants to Regulate Skill Games to Help Pennsylvania’s Budget

Summary

Governor Josh Shapiro is pushing lawmakers to legalise and regulate electronic “skill games” that have proliferated across Pennsylvania in bars, shops and petrol stations. In his 2026–27 budget proposal — a $53.2 billion spending plan that avoids broad tax rises — Shapiro proposes taxing these slot‑like machines heavily to capture revenue currently lost to a grey market. State officials estimate up to 70,000 machines are operating without clear oversight. The plan would impose a sizable revenue tax (reported around 52%), allocate funds for problem‑gambling programmes and localities, and direct most receipts to the General Fund. Combined with legalising cannabis, the administration projects roughly $2 billion a year in new revenue. Lawmakers remain divided over rates and enforcement, while industry groups warn excessive taxation could harm small venues that host the machines.

Key Points

Shapiro’s 2026–27 budget seeks new revenue sources and proposes regulating and taxing electronic skill games.
Officials estimate as many as 70,000 skill‑game machines operate across Pennsylvania in a regulatory grey area.
The proposal would legalise the machines, set strict operating rules and levy a large revenue tax (circa 52%).
Proceeds would be split between the General Fund, local governments and support for problem‑gambling services.
Shapiro’s administration says regulating skill games plus cannabis could raise about $2 billion annually.
Industry groups and some lawmakers worry high taxes and unclear oversight could damage small businesses and complicate enforcement.
Past attempts to pass legislation have stalled over tax rates and governance disputes; negotiations are ongoing.

Content Summary

Shapiro argues the lack of regulation has created confusion for prosecutors, law enforcement and local authorities, and leaves communities exposed while the state forfeits substantial tax revenue. By bringing skill games under a clear legal framework, the governor aims to both regularise the market and capture funds to support priorities such as K–12 education, which his budget would increase by more than 8%.

While operators claim the interactive element of skill games keeps them outside current gambling statutes, the administration insists that formal rules and taxation are necessary. Legislative resistance centres on disagreements about who regulates the machines and how steeply they should be taxed — issues that have repeatedly stalled bills in previous sessions.

Context and Relevance

This story matters because it sits at the intersection of fiscal policy, gambling regulation and local economic impact. If enacted, the plan would move a sizeable, currently untaxed industry into the regulated economy, producing funds that could ease budget pressures and underwrite education and social programmes. For the gambling industry, hospitality sector and local governments, outcomes will affect revenue flows, compliance obligations and community relations.

Nationally, the debate mirrors other states’ efforts to clamp down on grey‑market gambling products while balancing revenue goals with concerns about problem gambling and the viability of small businesses that host machines.

Why should I read this?

Short version: if you live in Pennsylvania, work in hospitality, local government or the gambling sector, this could change who gets paid and how much. Shapiro’s push could unlock billions and reshape local revenues — or it could get bogged down in a taxes‑and‑control fight. Worth five minutes to know which way the budget needle might move.