Gaming Act Definitions Inform Crimes Code “Slot Machine,” but Gaming Act Licensing/Tax Regime Targets Only Board-Licensed Use

Precedents Cited

In re: Three Pennsylvania Skill Amusement Devices, One Green Bank Bag Containing $525.00 in U.S. Currency, and Seven Receipts, 306 A.3d 432 (Pa. Cmwlth. 2023) (en banc) (Three Devices)

Justice Brobson treats Three Devices as the key interpretive error-correction: the Commonwealth Court declined to consult the Gaming Act’s definition of “slot machine” when deciding whether devices were illegal “slot machines” under Crimes Code Section 5513(a)(1). For Justice Brobson, once it is accepted that the Gaming Act delineates a limited zone of lawful slot-machine gambling, the definitional architecture of the Gaming Act is a natural (and necessary) reference point for understanding what falls outside that lawful zone and therefore remains prohibited by Section 5513.

In short, Three Devices matters not because it supplies the governing definition, but because it illustrates the consequences of refusing to harmonize statutes that the Majority (and Justice Brobson) view as interlocking.

POM of Pennsylvania, LLC v. Department of Revenue, 221 A.3d 717 (Pa. Cmwlth. 2019) (en banc) (POM)

Justice Brobson uses POM to draw a line between (a) interpretive “cross-referencing” of the Gaming Act’s definitions for Crimes Code purposes (which he supports) and (b) transforming the Gaming Act into a comprehensive statewide regulatory-and-tax regime for all slot machines regardless of where they are deployed (which he rejects).

He frames Revenue’s counterclaim in POM as an effort to obtain declaratory relief that would: (i) require POM to be licensed as a manufacturer/supplier, (ii) require removal/cessation of distribution in Pennsylvania absent licensure, and (iii) subject POM devices to the Gaming Act’s 34% daily tax applied to “slot machine licensees.” Justice Brobson concludes these requests misconceive how the Gaming Act operates.

Legal Reasoning

1. The “tandem” framework: Justice Brobson endorses the premise that the Gaming Act and Crimes Code Section 5513 are complementary. The Gaming Act authorizes limited lawful slot-machine gambling under Board licensure; everything outside that authorization remains exposed to Section 5513’s prohibitions. This premise supports importing the Gaming Act’s “slot machine” definition into Section 5513(a)(1) analysis to avoid a loophole in which a device could be a “slot machine” for Gaming Act purposes yet not a “slot machine” for Crimes Code enforcement.
2. Definitions do not expand the operative scope of licensing duties: His central disagreement with the Majority concerns the Department of Revenue’s attempt in the POM litigation to leverage broad definitional terms (e.g., “slot machine,” “manufacturer,” “supplier”) into an all-encompassing duty to obtain Gaming Act licenses—even when the devices are not destined for Board-licensed casinos. For Justice Brobson, a definition is only the starting point; the operative provisions determine when licensure is required.
3. “For use in this Commonwealth” is read functionally, not geographically: Justice Brobson emphasizes that the Gaming Act makes slot machines lawful only “in facilities licensed by the Board”—i.e., “slot machine licensees” (citing the Act’s licensing structure and caps). He therefore interprets the manufacturer licensing requirement (manufacture “for use in this Commonwealth”) to mean “for lawful use” in Board-licensed facilities, not “for any physical placement anywhere within Pennsylvania’s borders.” Under this reading, the Board licensing channel is not available to entities whose business model is to place devices exclusively in unlicensed venues.
4. Supplier licensing is tethered to supplying licensed entities via licensed manufacturers: He similarly reads the supplier licensing trigger as limited to providing slot machines to “a slot machine licensee, an interactive gaming certificate holder or an interactive gaming operator” in specified, regulated ways. If the supplier is not contracting into that lawful ecosystem, the supplier license obligation does not attach—even if the supplier might “fit” the definitional label in the abstract.
5. The 34% tax is not a backdoor tax on illegal gambling: Justice Brobson rejects applying the Gaming Act’s 34% daily gross terminal revenue tax (imposed on “slot machine licensees”) to POM’s machines placed in unlicensed locations. His reasoning is structural: the tax is part of the regulated casino framework, and extending it to unlicensed venues would effectively convert the Gaming Act into a general taxing statute for illegal gambling—something he does not read the Act to do.

Impact

Although this is a concurring and dissenting opinion (and thus not itself the holding), Justice Brobson’s analysis presents a coherent limiting principle that, if adopted in future cases, would have several practical effects:

• Sharper statutory “division of labor”: The Gaming Act would remain primarily a framework for lawful casino gaming (licensure, caps, taxes), while the Crimes Code would remain the principal tool for addressing unlawful slot-machine activity outside casinos.
• Constraint on agency strategy: Revenue (and potentially other agencies) would face limits in using Gaming Act licensing/tax provisions as enforcement levers against entities operating exclusively in unlicensed markets; enforcement would proceed principally through criminal/prohibitory statutes (and related forfeiture remedies).
• Interpretation methodology: Courts would be encouraged to harmonize definitions across interlocking statutes (Gaming Act ↔ Crimes Code) while still insisting that operative provisions, not definitional breadth, determine regulatory obligations such as licensure and tax incidence.
• Regulatory containment: The opinion resists “comprehensive regulation by implication”—i.e., the move from “the Act defines X” to “the Act regulates all X everywhere.” That approach, if influential, could shape future disputes involving novel gambling devices and attempts to fit them into existing statutory boxes.