HARRISBURG โ Two days after a Minnesota state representative and her husband were gunned down at their home in a politically motivated assassination, State Sen. Rosemary Brown found a flier in her door.
Brown, a Republican who lives in a private community in the Pocono Mountains, was startled to find the flier with her face on it. She looked at her neighborsโ doors, and checked with her homeowner association, where no soliciting is allowed. No one else received it.
She now believes the flier, which was not directly threatening in itself, is an attempt to intimidate her into supporting lower taxes for the skill game industry.
โI was very disturbed,โ Brown said. โYouโre really trying to help and do a good job. No matter what party you are, youโre trying. And shouldnโt have to deal with this.โ
The fliers โ and an all-out pressure campaign on GOP state senators โ is the latest escalation by supporters of the powerful skill game industry, which has operated by its own rules in Pennsylvania for more than a decade, allowing the slot-machine look-alikes to proliferate by the tens of thousands around the state.
The debate around skill games has been largely led by one company: Pace-O-Matic, the Georgia-based operator of the โPennsylvania Skillโ machines now found in every corner of the state. Theyโve claimed for years they are the only โlegalโ skill game, citing a 2014 Beaver County ruling that has held up in appellate courts since and found they differ from slot machines because of a so-called skill component โ most notably in a pattern memory minigame embedded in the gameplay โ has allowed them to continue operating in a legal โgrayโ area for the last decade. A case about the legality of the machines is before the state Supreme Court.
Gov. Josh Shapiro, a Democrat, proposed taxing the machines at 52% like Pennsylvaniaโs games of chance that would bring in an estimated $369 million in its first year, which the industry quickly rejected. Itโs among the top issues on the negotiating table this year, as top lawmakers in the state House and Senate work toward a budget deal, now several days past its deadline.
Now a dark money group, the Defeating Communism PAC โ which Pace-O-Matic maintains they are not responsible for โ has upped the ante in its canvassing campaign, including the flier in Brownโs door, further souring many GOP senatorsโ view of the industry that has been financially supportive of them over the last eight years.
And the industryโs aggressive campaign has had some bad consequences for Pace-O-Matic. In recent weeks, Pace-O-Matic has been dropped by two of the top lobbying firms in the state, after pressure from Senate leaders. The two top Senate GOP leaders, President Pro Tempore Kim Ward (R., Westmoreland) and Majority Leader Joe Pittman (R., Indiana) have called them โbullies,โ as they decide with their caucus how much they should tax the machines in what Pittman now describes as a public safety issue if they continue operating without any state oversight.
A decade in the gray
Pace-O-Matic has said, for years, it wants to be regulated by the stateat a much lesser rate than slot machines in casinos or video gaming terminals in gas stations, which both pay upward of 52% in taxes. Yet they have remained unregulated and untaxed with winners supposed to self-report their winnings on their income tax forms. Itโs unclear how much money Pace-O-Matic โ and the other copycats around the state โ make off the games.
The cabinets that house the โPennsylvania Skillโ machine are manufactured in Williamsport, and bring in an unknown amount of money for small businesses and fraternal organizations that have the machines in their facilities. If the machines are taxed at the same rate as slot machines, small businesses will be the ones to suffer, Pace-O-Matic and other proponents claim. And unlike in slot machines, the player has the opportunity to win 100% of the time, they say, meaning they shouldnโt have to pay the same high tax as slots.
However, thereโs a long laundry list of issues with skill games, according to opponents. For one, they attract crime โ a main concern for Pittman, the majority leader, who noted to reporters last month that a skill game operation was robbed in his district. There is also the issue of access for gambling addicts, who can put themselves on self-exclusion lists at casinos, but not at their local gas station where skill games are available. There are also consumer protection concerns, with a number of copycat skill machines on the market that are true games of chance, among other potential issues.
Some lawmakers, including State Rep. Amen Brown (D., Philadelphia), still want to ban them all together, as he said heโs seen them become hubs for crime โ robberies and even shootings โ around his district, and said he helped author the cityโs legislation to ban the machines. The casino industry for a long time advocated for their outright ban, but have changed their strategy in recent years to want seek limits on the number of machines allowed, and tax them at the same rate as slots, as the skill games continued to pop up everywhere in the state.
The Operators for Skill PAC, which is directly funded by people involved with Pace-O-Matic and other amusement companies, has spent nearly $2.2 million in Pennsylvania, most of it going to GOP lawmakers, though the PAC makes campaign contributions to members of both parties. But now with the increased campaign, even more lawmakers have soured on them.
โIโve never, in all these years, come across any kind of a group that has done what these groups have been doing, which is, I find, unprofessional, heavy-handed, threatening and menacing,โ said Sen. Camera Bartolotta (R., Greene). โYou donโt win people over by doing that.โ
Pace-O-Matic maintains they are not behind the PAC responsible for the advertisements, and that small businesses are โfar more concernedโ about the potential tax hike they would face under current proposals.
โSkill games provide essential support to many Pennsylvanians across rural, suburban, and urban communitiesโincluding thousands of individuals employed in bars, clubs, restaurants, and other small businesses,โ said Mike Barley, Pace-O-Maticโs chief public affairs officer in a statement.
A fire chief accused of wanting to close firehouses?
Rosemary Brown isnโt the only state senator currently being targeted by a dark money political action committee, Defeating Communism, whose backers are largely unclear.
The PAC is loosely supported by Citizens Alliance Pennsylvania, a conservative group responsible for primarying moderate GOP incumbents, according to campaign finance filings.
State Sen. Frank Farry (R., Bucks), who introduced legislation last session to regulate skill games at the same rate as slot machines and require them to be in places with liquor licenses, is a special target for the dark money group.
Flyers began appearing around Farryโs politically purple district in Lower Bucks County that claimed he was trying to close volunteer fire departments and local fraternal clubs, like VFWs.
โTell Senator Farry to stop targeting PA Firefighters + Veterans!โ the flier read. โOnce a respected member of the PA State Senate, Farry has turned on us and you wonโt believe who he is targeting nowโฆโ before listing fire departments, fraternal clubs, and small businesses.
One problem: Farry is a longtime volunteer firefighter, and has been fire chief of the Langhorne-Middletown Fire Department for 24 years. He is well known in the Capitol for his advocacy for first responders, authoring many bills in his time in the state House and Senate to support them.
Last month, Farry was driving around Middletown Township when he spotted a canvasser knocking on doors in his district about him. He stopped to talk to her.
In a recording of the interaction obtained by The Inquirer, the canvasser said she is from Texas, and does not realize she is talking to Farry, whom she is handing out fliers about.
She eventually calls her field director, who says their company Motivate the Movement is canvassing on behalf of CAP. CAP did not respond to requests for comment.
In the interaction, Farry asks (in the third person, not revealing his identity) whether the field director knows they are handing out misinformation about him, since he is a volunteer firefighter. The man on the phone said his canvassers have learned while knocking doors that he is well-liked in his district, according to the recording. But if he doesnโt support the skill game industry, they will primary him.
The recent escalation in tactics is likely because the skill game industry is aware the state is getting closer than it ever has to regulating the machines, Farry said.
โTheyโre trying to intimidate us to either cave to what they want or to back off the issue,โ Farry said in an interview. โMy mom, the way she raised me, didnโt raise me to treat people this way. And Iโm also very confident the voters that voted for me did not send me out here for me to get bullied and pull off a policy stance for my own self interest.โ