Republican lawmakers are going head-to-head against a skill games manufacturer as both sides allege the other is employing intimidation.
A political brawl over so-called “skill games” is rocking Pennsylvania’s Capitol, with Republican lawmakers caught between budget pressures and accusations of intimidation on both sides.
At the center of the controversy is Pace-O-Matic, a Georgia-based company behind thousands of the games across the state—video gambling machines that currently operate without regulation or taxation.
For years, GOP lawmakers in the state Senate resisted taxing the machines, wary of burdening small businesses that host them in fire halls, bars, and gas stations. But now, with a budget shortfall and Pa. Gov. Josh Shapiro pushing for a 52% tax rate on par with slot machines, Republicans are proposing a lower rate, closer to 35%.
Pace-O-Matic, however, says even the GOP’s proposed rate is too high, arguing that their machines are more like table games, which face a 16% tax.
“Hundreds of small businesses, manufacturers, operators and distributors make up the supply chain. If nearly all the revenue is taken through taxes, there will be nothing left for those businesses to survive,” wrote Sen. Gene Yaw, a Republican who authored legislation aligning with Pace-O-Matic’s preferences.
“The projected windfall in tax revenue will never materialize because the industry itself will disappear. For more than a century, the warning has rung true: the power to tax is the power to destroy.”
A lower tax rate is the right call. High taxes are an economic burden, plus they keep activity in the black market & stifle efforts to clarify the legal status of these games.https://t.co/UcNCDoDRZp @SenatorGeneYaw
— ATR (@taxreformer) July 29, 2025
Not all GOP senators are enthusiastic to partner with the skill games manufacturer, however, as party leadership is accusing the company and its allies of running a coordinated intimidation campaign.
Flyers targeting Republican lawmakers began appearing in their districts, distributed by out-of-state canvassers, including some reportedly from Texas. The effort is backed by Ohio-based PAC “Defeating Communism,” which has funneled hundreds of thousands of dollars into a door-knocking campaign, according to FEC filings.
Senators like Frank Farry and Camera Bartolotta say these flyers misrepresented their positions in an attempt to bully them into supporting industry-preferred regulations.
Pace-O-Matic denies any involvement with the flyers or the PAC and says it’s the Senate GOP playing hardball by pressuring major Harrisburg lobbying firms to drop the company as a client. Mike Barley, Pace’s chief public affairs officer, says Senate leadership “intimidated” three firms into severing ties just as budget negotiations were heating up. The company also claims its emails were mysteriously blocked by Senate servers.
Some members like Sen. Jarrett Coleman, a Lehigh County Republican, see the flyer campaign as protected political activity, not intimidation. Coleman is among a group of lawmakers aligned with Citizens Alliance of Pennsylvania, a conservative group backing lower taxes and limited regulation.
“No matter how critical mailers or flyers may be of public officials, it is all part of free speech and a cornerstone of what our country was built on,” Coleman stated.
Meanwhile, the state’s budget remains in limbo, now weeks overdue. The House passed a General Fund bill largely opposed by Republicans, who say it lacks transparency on spending. The GOP-controlled Senate is scheduled to reconvene, but the skill games fight is complicating already tense negotiations.
Pennsylvania has over 70,000 unregulated machines generating untold millions in untaxed revenue, while the state budget remains in the red. Gov. Shapiro has called for unity, saying lawmakers are “very, very close” to a deal.
