00:00 - The following program is sponsored in part by

00:03 - customer's bank.

00:11 - We're joined today by Mike barley chief public affairs officer for pace amatic in

00:17 - June the Pennsylvania supreme court ruled that skill games are

00:21 - basically the same thing as slot machines that we find in casinos before we get into

00:25 - the specifics of the decision can you explain for our viewers what are skill games

00:29 - yeah a skill game is an interactive game that you find at bars and restaurants and a

00:35 - fraternal clubs where

00:37 - the player can play they have to interact with the game but they at the basis they

00:41 - can win every single time there's no compensating algorithm in the game software that

00:44 - says you're going to win or lose depend upon.

00:47 - The luck

00:48 - of the the draw

00:50 - for those that are unfamiliar what should our viewers know about pacing at a

00:52 - yeah we're the leading software company for skill games

00:55 - across the country and we work with those partners in the

00:58 - bar restaurant

00:59 - tavern and in the fraternal clubs to help provide them

01:02 - with an entertainment product that helps them

01:05 - make some supplemental revenue

01:06 - which is important these days especially as they confront

01:09 - rising costs and in the difficulties finding and attracting quality labor.

01:14 - As i mentioned that court decision like in skills skill games to casino games

01:19 - how how do you make a differentiation what is the difference.

01:22 - Look at it it's going to be an interesting one for the legislature decide

01:26 - there is a

01:27 - there's a way you legislature can make laws an indifferent

01:30 - differentiate the games

01:32 - through legislation i think that's ultimately what the supreme court got to.

01:36 - Look

01:36 - you know there was about a dozen county

01:38 - common pleas courts and an unanimous commonwealth court

01:41 - opinion saying the opposite until the supreme court came in

01:44 - i could disagree with the result but that they have the all ultimate say the end of

01:48 - the day though what though i do agree with them one hundred percent on is that the

01:51 - legislature needs to address it it's something that we've been working with them

01:54 - trying to get to a resolution we're hopeful

01:57 - with this deadline that may provide the the runway to get something done

02:01 - an initial twenty fourteen court decision had ruled that skill games were different

02:05 - from casino games so a chain changed.

02:08 - Look i i i'm not sure exactly what the supreme court.

02:12 - You know was looking at when they based their rulings but you know again we felt

02:16 - pretty consistently throughout the

02:18 - decade of litigation on this over a decade of litigation on this

02:22 - that the game was

02:23 - a skill game it's still believe that

02:26 - now i think when you look at the decision it was far reaching it even

02:31 - includes games that Chuck e cheese and Dave and busters if you read it it

02:34 - is

02:35 - basically the summation was well if that's the case then so be it legislature fix it

02:39 - so again i think this is where the ledge it's going to take a legislative fix to

02:43 - to kind of unwind what was decided

02:46 - and.

02:47 - Look ultimately we want regulation

02:49 - we believe there's a there could be fair taxation fee based

02:53 - system put in place here

02:55 - to allow this to continue but we we believe there

02:58 - should be regulation and guard rails around us as well

03:00 - how many skill games are currently operating in Pennsylvania

03:03 - it's a great question and that's why regulations needed i look

03:06 - i can tell you from pay semantics that we were about twenty thousand in the market.

03:10 - In about seven thousand different

03:12 - establishments

03:13 - you know look there's

03:15 - a lot of

03:15 - estimates i think the state police's says seventy or eighty thousand

03:19 - i believe there could be upwards of one hundred thousand operating within

03:22 - the commonwealth

03:23 - where can skill games be found

03:25 - look at it really is

03:27 - it's in your local bar restaurant.

03:30 - Your fraternal clubs.

03:32 - Can be stores those types of locations you'll see them in your your area

03:37 - look i think when you look at whatever solution gets put in place hopefully

03:41 - there will be limitations on how many games are in these these

03:45 - these spots i mean you see some locations that are nothing more than a

03:48 - as you know

03:49 - about

03:50 - a

03:50 - strip mall with a

03:52 - mini casino oh and

03:53 - our games aren't in there i don't think there's

03:55 - a role for those that's the purview of a casino.

03:59 - You

03:59 - weep

04:00 - when our contract we make sure that

04:02 - there's already existing reason for that establishing to be there and

04:06 - most of our businesses they're selling another product

04:08 - a fraternal club obviously they have their own mission and most of it's charitable so

04:13 - they a different reason for existing.

04:15 - How to score games benefit their hosting businesses

04:18 - look they don't there's no capital outlay they they take in forty percent of the

04:22 - profits just for having him there and

04:25 - forty

04:26 - forty percent of the other

04:27 - the other forty percent of the profits are shared

04:29 - with their partners the coin operated industry so the

04:32 - the folks who put the pool tables the

04:34 - the.

04:36 - Dart boards the atm in those locations they're the ones who service and

04:40 - and i and handle the accounting for it

04:43 - so

04:43 - there's a significant amount of revenue for the last

04:46 - decade these these folks have been relying on to help

04:49 - fill in the cracks especially as you looked at cove it and then you know

04:52 - inflation rising costs and then

04:55 - just behavioural change ages from consumers

04:57 - after covert i think many of us have

05:00 - probably grown accustomed to Uber and

05:02 - and other

05:03 - delivery services so that cuts down on people going to these establishments

05:07 - and they may have ordered an extra

05:09 - drink or an extra.

05:11 - Meal or something that that's

05:13 - cut down on their margins

05:14 - as lawmakers are paying tax with

05:16 - creating some sort of regulations for skill

05:18 - games should there be a differentiation between

05:20 - those that are housed at charitable organization type businesses versus those

05:25 - stand alone parlours that are just having the games

05:27 - yeah look i i'm not sure there'll be a solution where they're standalone parlors are

05:31 - going to be able to exist but yeah i mean i think that it's really be up to the

05:35 - legislature how they you're able to do that but

05:38 - i think

05:38 - a lot of folks look at those charitable organizations as

05:42 - every dollar they're earning they're putting back into the communities whether it's

05:46 - sponsoring the little league team or the

05:48 - town's fireworks for fourth of July there they have a lot of charitable causes and

05:52 - they they again they feel in a lot of cracks with the social.

05:56 - Fabric of those local communities and in a lot of them it's it's also about allowing

06:00 - them to exist they are often a meeting place especially the veterans offer for

06:05 - folks that are

06:05 - maybe

06:07 - veterans that are having a little bit of difficulty

06:09 - whether it's you know financially or just

06:11 - emotionally from some of the trauma that if

06:14 - they dealt with and you hear those stories from the low aka legions vfw use.

06:18 - The services they provide and

06:20 - that stuff that they are providing on their own not with

06:23 - any government involvement will make sure they continue to have those resources to

06:27 - the support those folks.

06:29 - How much revenue does the average skill game

06:31 - generate and how does that get divided up

06:34 - yeah i mean it it fluctuates obviously by loki cation i can tell you that

06:38 - you know

06:39 - many locations

06:41 - if you're looking at a couple of terminals that can be thirty or forty grand a year

06:45 - so when you're looking at a

06:47 - fraternal hall or or a small business that that could pay the rent.

06:52 - So you're talking about a significant line item that they're going to be.

06:56 - There they're going to be missing so the way that the revenue

06:59 - from a terminal if you look at it

07:01 - a forty percent of the revenue staying with that local

07:04 - business forty percent is going to the business that

07:07 - the local

07:08 - coin operated business

07:10 - that once again who do the dartboard in the pool tables and

07:13 - they were making it big when

07:14 - miss pac man was big but you know the days of

07:16 - the art cades are gone with the cell phone.

07:19 - They're getting forty percent and then twenty

07:22 - percent comes back to us as the software distributor

07:25 - we also share that with our Pennsylvania distributor who.

07:28 - Is based in williamsport.

07:30 - Legislative attempts to tax skill games have

07:32 - ranged from roughly thirteen to fifty two percent

07:35 - do you support efforts to tech skill games

07:37 - and if so how do you find the appropriate rate

07:40 - yeah we've always been in support of

07:43 - understanding if there's going to be some sort of a

07:46 - fee that goes back to the state

07:48 - i think that

07:48 - the difference in in the in the struggle has been.

07:52 - You know all the different competing ideas and obviously there's there's in you know

07:56 - other industry trees and competitors that would like or

07:59 - that believe their competitors that would like to

08:01 - to

08:01 - kind of

08:02 - set those rates but

08:04 - i think when you look at it you really have to understand

08:06 - we're not talking about a

08:08 - business that's entire

08:10 - goal is to be a gambling hall this is

08:13 - a couple skill game terminals in a business

08:15 - in a small business or fraternal club it's a much different market

08:19 - our games are not nearly as profitable or high stakes there

08:23 - they are much smaller and again i think.

08:25 - There has to be a consideration for that local

08:27 - revenue that stays in those those those businesses

08:31 - what do you think about legislative efforts to reduce the number of skill games

08:34 - either an establishment can have or the total number for all

08:37 - yeah look at we've again we've long supported efforts to

08:41 - limit the number of games you know I've seen

08:44 - you know the convenience store with

08:46 - you know twenty games in it and not

08:48 - as

08:48 - i think that's

08:49 - not a good look as much as most people do

08:52 - so i think there's gotta be limits on the number

08:54 - of terminals and there has to be safeguards

08:56 - and i think once you do do limit that and you get rid of the many casinos you're

09:00 - going to see that statewide total come way down.

09:03 - Center Chris gebhardt is offering a proposal that among other things has the gaming

09:06 - control board oversee skill games what do you

09:09 - think of this proposal look at you know we've

09:12 - we've.

09:13 - Certainly had some issues with that proposal and it really just depends on the game

09:18 - control ward in general they've been

09:20 - extremely antagonistic towards the skill game industry from the beginning.

09:24 - There's a long history there and

09:26 - and really they were designed to

09:28 - oversee gaming in.

09:32 - Box casinos

09:33 - we've worked in and

09:35 - discuss working with the lottery there in the

09:37 - lot of the establishments that were already in.

09:40 - They have a framework in a central system that would be much more

09:44 - applicable to the way our games operate

09:47 - so we believe that's a much better fit and it would provide the regulatory oversight

09:50 - i think that the state would be looking for

09:52 - are established

09:53 - establishments that host skill games require to do anything

09:56 - to address gambling addiction or any safety concerns

09:59 - it's been an interesting one because of the

10:01 - the litigation that's been going on it was tough to work with gambling because we

10:06 - were arguing explicitly that we weren't.

10:09 - We believe that will be part of whatever that

10:11 - fight.

10:12 - The

10:13 - product will be will include.

10:16 - Language that will and funding that would address.

10:19 - That that program i certainly have sat down with our executive director a number of

10:24 - times and i understand the concerns and we we

10:25 - certainly would want to be part of helping.

10:28 - You references a little earlier supreme court justice David wecht had said that the

10:31 - court's decision could potentially affect things like

10:34 - claw games skee ball anything that general

10:36 - dates tickets or prizes is that a valid argument

10:39 - yeah i look i i think it is something i you know i'm not sure we'll see

10:43 - you know the police and you know going out like

10:45 - eliot ness bustling down Chuck e cheese but

10:48 - it is a concern and i think it just highlights what

10:51 - the the supreme court did find is that the

10:53 - legislature needs to address this writ large at whole

10:56 - and i i

10:57 - you know again we're we're headed into a very.

11:01 - Brief session

11:02 - before the election

11:04 - i'm hopeful that there will be time to get something

11:06 - done but you look at all these different aspects and

11:09 - you know to think that

11:10 - the Chucky cheese or even with kids going back to college their esports program could

11:15 - really be defined as a gambling operation

11:18 - an

11:18 - illegal gambling operation

11:20 - that needs to be addressed

11:22 - the court gave the legislature one hundred and twenty days until October thirteenth

11:25 - to come to some sort of decision regarding regulation

11:28 - what's happened since that decision was handed down

11:31 - yeah i mean look we've been going around and in highlighting.

11:34 - The impact it will have on local communities and the local businesses and clubs

11:38 - there have been some discussions behind the scenes we'll see

11:41 - you know it's always interesting time

11:44 - this is usually

11:45 - in

11:46 - the least

11:47 - productive time for the legislature because you're heading

11:49 - into elections it's just historically the way it's been.

11:53 - So we'll see where where.

11:56 - Where their momo Adam

11:57 - is going to be i know the governor would like to see something done

12:00 - and i believe that.

12:02 - Parts of both chambers would like to

12:04 - see something done but you're also have the weight of just

12:07 - all the outside pressure from the elections and things that play as well

12:11 - what happens if the legislature isn't able

12:12 - to come to an agreement by October thirteenth

12:15 - look you know we've been very concerned

12:17 - we will not operate outside the law we've always

12:19 - operated within the law without legal decisions that have

12:22 - said that our games are illegal

12:23 - we will shut our games down

12:25 - and

12:26 - we will continue to advocate

12:28 - for for a product that would allow us to open up and

12:32 - and

12:32 - put some of those safeguards in place but we're not going to

12:35 - continue to operate my guesses

12:37 - there are people will be

12:38 - operating and.

12:40 - There

12:41 - unfortunately if that does occur i think

12:43 - businesses and clubs are going to be put in

12:45 - this awful situation of trying to decide whether

12:47 - to.

12:47 - Do something that may not be right or in the gray area not even a grey area now

12:52 - we're keep their business afloat and that's a shame i'm hopeful the legislature doesn't

12:56 - is able to acts that doesn't occur

12:58 - do you think the impending election will have an impact or put any additional

13:02 - pressure on lawmakers to act on this issue for them

13:04 - i think the elections put pressure on no matter what but yeah i mean look i think

13:08 - that there is some concern in some areas where.

13:11 - These pockets of.

13:14 - Communities where you're talking about the vfw and American legions and then

13:18 - just your local

13:20 - you know watering hole it's going to have a real impact

13:22 - than if you talked to any of them they'll tell you that

13:24 - this is a significant

13:26 - portion of.

13:28 - How they've been able to weather some of these storms and

13:31 - i think everyone sees that the prices are a bit higher and

13:35 - we're all

13:36 - trying to adjust to that businesses the same way i mean you you talked to them

13:39 - negotiating their electric rates are then negotiating their healthcare everything's

13:43 - going up and it's not going up by a little it's going up by a lot so.

13:47 - This was you take this away a decade they've they've been relying on this

13:51 - supplemental revenue it's it just adds another hurdle

13:54 - to see them achieving their bottom line and continue to operate

13:58 - how confident are you in the the legislature's

14:00 - ability to come to a decision for October thirteenth

14:03 - I've been doing this for over twenty years i never get

14:06 - to put.

14:07 - Any kind of odds on what that looks like a it's

14:10 - it's a unique time.

14:13 - For the legislature when there looking at the election like i said i'm hopeful

14:17 - that i i do believe they're taking it seriously

14:20 - i do believe there's conversations happening

14:22 - just got to see if we can get to a final

14:24 - agreement what will pay some meta continue to do as the October deadline approaches

14:29 - re senior talk to our communities will hold events we're going to be meeting

14:34 - with legislators

14:35 - headed to an event again tonight i was in one in Armstrong county last night

14:39 - i was just going to continue to talk to our get our message out through

14:43 - channels like this in the media and

14:45 - and talk directly to lawmakers the best thing at folks who care about this can do is

14:49 - call their lawmakers are here to represent you and.

14:53 - They have the ability to to away and

14:56 - whether they're in leadership or not with their leadership to make sure they know

14:59 - this is an important issue to them

15:01 - my farley's chief public affairs officer with pace sonata thank you for joining us

15:04 - thank you.

15:07 - Hmm.

15:19 - Hmm.

15:25 - Hmm.