Legality of Pace-O-Matic Gaming Machines Set to Go Before Pa. Supreme Court

The case has been stewing in the Commonwealth Court since June 2018, but an avenue to bring the case before the high court only recently appeared.
March 21, 2023
By: Aleeza Furman, Litigation Reporter, The Legal Intelligencer / Law.com
The legality of gaming devices made by Georgia-based Pace-O-Matic is headed to the Pennsylvania Supreme Court after years of litigation in the Commonwealth Court.
A group of six casinos, represented by Lamb McErlane, was the most recent of several parties involved in the case to file an appeal in the past month. And on Monday, they joined the Pennsylvania Gaming Control Board and the Department of Revenue in turning to the high court to address the matter.
“We’re pleased that the issue has now reached the state’s highest court,” Lamb McErlane managing partner Joel Frank said.
The case, captioned POM of Pennsylvania v. Department of Revenue, had stewed in the Commonwealth Court since June 2018 until an avenue recently appeared to bring the case before the high court. The appeals centered on a 2019 en banc ruling the Commonwealth Court entered and only became final with POM’s discontinuance of the case in February.
Frank said that between the 2019 ruling and the recent discontinuance, various disputes involving discovery, motions to intervene and changing legal representation bogged down the case. He said the discontinuance enabled the parties to appeal. However, he is unsure of POM’s motivation for discontinuing the case.
Attorneys with Kleinbard and Myers, Brier & Kelly, who represent POM, did not respond to requests for comment.
“Our games have been held by the courts to be legal, and no court has ever held that our game is an illegal gambling device,” Matthew Haverstick, a partner at Kleinbard, said in an October statement to The Legal Intelligencer. “I know the casinos wish that wasn’t the state of the law, but there it is.”
POM initiated the dispute through a 2018 petition for review asking the Commonwealth Court to declare that its games were legal under state law. In response, the Pennsylvania Department of Revenue sought a declaration that POM’s games were unlawful slot machines subject to regulation under the Pennsylvania Race Horse Development and Gaming Act.
In its 2019 opinion, the Commonwealth Court determined that the Gaming Act did not apply to POM’s machines since the act governed only licensed gambling devices.
The ruling, however, did not determine the legality of the devices under the Pennsylvania Crimes Code.
A spokesperson for the DOR, represented by the Pennsylvania Office of the Attorney General, declined to comment.
Following the ruling, which denied the DOR’s application for summary relief, the Gaming Control Board and the casinos sought to intervene. The court had not ruled on their intervenor status by the time the case was discontinued.
“The board believes the Gaming Act was meant to establish the law of the commonwealth relative to all slot machine gaming, authorizing it at certain locations and on approved machines, while disallowing it everywhere, and on everything, else,” Stephen Cook, chief counsel for the Gaming Control Board, said in an emailed statement.
Frank said POM’s gaming machines face widespread opposition from various agencies—including the City of Philadelphia, the Pennsylvania State Police and the Bureau of Liquor Control Enforcement—which contend that POM creates illegal gambling devices.
“It’s a widespread issue because they’re popping up everywhere,” Frank said.
The appellants each presented slightly different questions to the high court. Still, they broadly center on whether the Gaming Act regulates unlicensed slot machines and whether the act supplanted the Crimes Code’s regulation of slot machines.
“One of the key components is the interaction and interplay between the Crimes Code and the Gaming Act,” Frank said.