Not the Headlines -- Skill Machines

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The Listening Tube presents not the headlines.

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I'm Bob Woodley from the Listening Tube. I'm a big fan of pinball machines. I've been playing pinball for more than 50 years, and I've played all over the world and even now participate in a pinball league. They're fun to play, sharpen your skills, and there are new models coming out all the time that incorporate the latest technology. But there was a time when they were illegal gambling devices, according to the law. In order to get the law to back off, it had to be proven that it was a game of skill and not a game of chance. Just as football or baseball require skill but often are influenced by chance, so is pinball. Today, it's a thriving industry with millions of fans who play in leagues and tournaments across America and around the world. If you're good enough at scoring points on a pinball game, you could win a free credit and maybe even get to add your initials to the leaderboard for others to pursue. Jersey Jack pinball machines even take your picture if you register a high score. Sometimes I'll win so often that I'll leave credits on a machine for some other player to discover and save the cost of playing a game. What you can't do with today's flipper pinball machines is cash in your credits. You either play them or leave them. There's no monetary reward for accumulating credits on a pinball machine. By now you might be thinking, All right, Bob, what's your point? Isn't it great how we're so in sync with each other? Anyway, the Pennsylvania Supreme Court recently declared that all of these so-called skill machines that have been popping up everywhere, including bars and social clubs, laundromats, convenience stores, and even standalone brick and mortar arcades, are not, in fact, games of skill. Instead, the court says they are illegal slot machines.

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Bob didn't believe it.

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The decision starts the clock on a 120-day window for the state legislature to decide if they want to let the ruling stand or write new laws to address the issue. These machines are a fairly big industry in Pennsylvania, as well as other states with different laws about gambling. Suddenly, all of these establishments who have been enjoying the income associated with Pennsylvania skill games are faced with the loss of that revenue. Small businesses, social clubs, and organizations like the Veterans of Foreign Wars and Fraternal Order of the Elks have become dependent on this income to maintain themselves. If that income goes away, they say they might not survive. Nonprofit organizations that have skill games in Pennsylvania are already required to give away to charities a large portion of that revenue. That and all other gambling revenue raised from what are defined as small games of chance. But the so-called skill games don't fall under that category. And quite frankly, the only reason those machines have the word skill written on them is to circumvent the law. Well, the law has finally called the makers of these machines and those who profit from them to the proverbial carpet. And it's not one of those fancy colorful carpets you find in a casino. Now the state has four months to figure out how to make them legal and tax them. Or at least that's what we might expect, considering the billion dollars a year the state can add to its coffers by legalizing and taxing the machines. If you look at it from that perspective, the Pennsylvania Supreme Court simply put a time limit on the state to start taxing the things or destroying them. A billion dollars a year is certainly a nice chunk of change for the state to play with. At the same time, the Pennsylvania Liquor Control Board, along with the State Gaming Commission, are very good at destroying things.

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Send email to thelisteningtube at outlook.com.

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There was a nice little neighborhood restaurant about a block and a half from where I grew up. Later on, after a few ownership changes over many years, it became more of a pool room with an illegal bar and then illegal gambling, and the state came in one day with chainsaws and cut the bar into little pieces before they shut the place down. So clearly, we already have guys for that. I'll bet they're just chomping at the pit right now at the thought of destroying seventy thousand illegal gambling machines. And right now, that's what they are. So will the legislature figure out a way to legalize and tax the machines? Will they fail to act before the deadline? Will they legislate a way to extend the deadline indefinitely, thus permitting the status quo without deciding one way or the other? My gut feeling is that the state will find a way to generate income and allow the industry to continue. They'll say it's because of the support they have for the small businesses that rely on the income from the skill machines. The VFWs and other civic groups, and the guy who owns a laundromat just trying to make a few extra bucks. There are certainly a lot of people who benefit from the cash flow generated by Pennsylvania skill machines. Many of those benefits are gathered by nonprofit organizations who then share that revenue with other nonprofit organizations.

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Similar, but different.

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Just under the 55% tax on slot machines in state licensed casinos. That would basically nullify any monetary advantage for nonprofit organizations. The state legislature and the governor have so much math in front of them that they don't know which way to turn, and a court decision has their heads spinning. In all the confusion over how much money can be had and how to legislate all of it, there's been very little attention paid to where this billion dollars a year is coming. Whose billion dollars got put into these so-called skill machines in the first place? Well, if not most of it, a large portion of it comes from people who are addicted to gambling. A report from Science Insights says that about twenty million adults could be addicted to gambling. It says that many fall short of a formal diagnosis, but still experience real financial and emotional harm. The study goes on to say that young people develop gambling problems at two to four times the rate of adults. Young men are most susceptible with addiction rates at three times higher than adult men. Online sports betting feeds this addiction, but we're talking about skill machines here. I've never played one of these new skill machines, so I don't know if they have a disclaimer on them or the phone number for gambling addiction hotline. If they don't, they should. Gambling is an addiction worse than most. It's very much the same as a substance addiction, but unlike nicotine or alcohol or cocaine, the effect is triggered by the thought of placing a bet, rather than a reaction to a chemical. That doesn't mean there can't be a physical result of a gambling addiction. A gambling addiction can lead to an abandonment of other responsibilities, like personal care and keeping appointments. Gambling often leads to poverty. I lived in Las Vegas. I saw people blow a week's paycheck in an hour, confident they'll be lucky this time. Back then, you could live in Las Vegas on a shoestring if you had to, as long as you were gambling. You got free drinks and food was super cheap. One place on the south end of the strip had all you could eat spaghetti for a dollar. Almost every casino had a buffet for anyone at a reasonable price. They say Las Vegas wasn't built on winners, and neither will the place's housing skill games. In order for gambling machines to make money, there have to be a lot more losers than there are winners. And the losers are the ones footing the billion dollar bill dropped on the table from the state of Pennsylvania. And they know they're hurting people. They know they're feeding an addiction. They now know that these machines are also illegal. Instead of abiding by the Supreme Court's decision and getting rid of these illegal theft machines that ruin lives and neighborhoods, the governor and legislature are going to allow this tax on an addiction that leads to poverty and suffering, all for a blatant redistribution of money taken from the working class and the working poor. From the listening tube, I'm Bob Woodley, for thou ad infinitum.