Individualized Character Assessment Mandate in Pennsylvania Video Gaming Licensing

Introduction

This commentary examines the Supreme Court of Pennsylvania’s decision in Brozzetti, F. v. Pennsylvania Gaming Control Board (2025). The consolidated appeals involve two groups of applicants—Michael and Frank Brozzetti (Better Bets Ventures, LLC) and Richard Teitelbaum (Lendell Gaming, LLC)—whose video gaming license applications were denied by the Gaming Control Board solely because they had participated in the “skill games” industry. The Commonwealth Court reversed that denial, and the Supreme Court affirmed, holding that the Board abused its discretion by applying a blanket industry‐wide character judgment rather than evaluating each applicant’s individual “good character, honesty and integrity” as required by the Video Gaming Act.

Parties and key issues:

Appellees: Better Bets Ventures, LLC (Michael & Frank Brozzetti) and Lendell Gaming, LLC (Richard Teitelbaum)
Appellant: Pennsylvania Gaming Control Board (PGCB)
Key issue: Whether the PGCB may deny or revoke video gaming licenses based solely on generalized concerns about the unlicensed “skill games” industry without individualized findings about each applicant’s character, honesty, and integrity.

Summary of the Judgment

The Pennsylvania Supreme Court, in an opinion by Justice Wecht, reversed the Board’s denial of the Brozzetti and Teitelbaum license applications. The Court agreed with the Commonwealth Court that the Board’s rationale—based on broad criticisms of the “skill games” industry (unregulated environments, under-age access, compulsive gambling risks, and revenue impacts on casinos and the lottery)—did not address the applicants’ personal character at all.

Although the Video Gaming Act grants the Board discretion to judge applicants’ “good character, honesty and integrity,” that discretion must be exercised through concrete, individualized findings. An agency action is reviewable under 2 Pa.C.S. § 704 for being “not in accordance with law,” which includes manifestly arbitrary or capricious decisions. Here, the Board substituted industry‐wide policy preferences for the statute’s individualized character inquiry, constituting an abuse of discretion.

The Supreme Court vacated the Commonwealth Court’s order to “issue the requested licenses” and instead remanded to the Board for further individualized consideration, without directing any particular outcome.

Analysis

Precedents Cited

Video Gaming Act, 4 Pa.C.S. §§ 3101–4506: Establishes licensing requirements, including clear‐and‐convincing proof of “good character, honesty and integrity.”
Administrative Agency Law, 2 Pa.C.S. § 704: Governs appellate review of agency adjudications; permits reversal if decision is “not in accordance with law” (abuse of discretion or arbitrary/ capricious).
Blumenschein v. Pittsburgh Housing Authority, 109 A.2d 331 (Pa. 1954): Court may not substitute its own judgment for agency discretion unless there is a manifest and flagrant abuse.
Slawek v. State Board of Medical Education & Licensing, 586 A.2d 362 (Pa. 1991): Incorporated Blumenschein’s abuse‐of‐discretion standard into § 704 review.
Fraternal Order of Police v. Pennsylvania Labor Relations Board, 735 A.2d 96 (Pa. 1999): Clarified that § 704 review ensures agency decisions are supported by competent findings, free from arbitrary policy preferences.
Commonwealth Court decisions on “skill games”: POM of Pa., LLC v. Department of Revenue, 221 A.3d 717 (Pa. Cmwlth. 2019); In re Three Pennsylvania Skill Amusement Devices, 306 A.3d 432 (Pa. Cmwlth. 2023). These holdings treated “skill games” as outside the Gaming Act’s scope in unlicensed facilities.

Legal Reasoning

1. Statutory Standard—“Good Character, Honesty and Integrity”: The Video Gaming Act requires each applicant for a principal or terminal operator license to prove by clear and convincing evidence that they personally possess “good character, honesty and integrity.” This is a case‐specific inquiry, not a broad industry assessment.

2. Board’s Abuse of Discretion: Under § 704, a court must reverse an agency adjudication that is “not in accordance with law,” including decisions that are arbitrary, capricious, or founded on prejudice or policy preference rather than evidentiary findings.

3. Board’s Rationale vs. Statutory Command: The Board identified general harms of unregulated skill games—lack of juvenile protections, problem gambling safeguards, minimum pay‐outs, and diversion of casino/lottery revenue—but did not link any of those concerns to the personal conduct or integrity of the applicants. There was no evidence that the Brozzettis or Teitelbaum ever conducted faulty operations, misled regulators, or engaged in illegal schemes.

4. Contrast with Mayes: The Board praised a third applicant, Mayes, solely because he voluntarily exited the industry upon questioning—even though he did so for purely commercial reasons once he suspected his license might be at risk. The Board’s flip from blanket denial to full embrace based on that singular act highlights the arbitrariness of its approach.

5. Remand, Not Direction: While the Commonwealth Court ordered the Board to “issue the requested licenses,” the Supreme Court held that—because other licensing requirements may remain—the appropriate remedy is to remand for individualized, evidence‐based review rather than to mandate specific outcomes.

Impact

Administrative agencies with discretionary licensing powers must ground denials in applicant‐specific findings, not broad policy or industry condemnation.
Clarifies the limits of “discretion” under § 704 review: agencies cannot rely on the mere fact of industry participation to deny licenses.
Reinforces due-process and fair-notice principles in regulatory adjudications—applicants must know and be able to rebut precise allegations about their character or conduct.
May influence pending appeals concerning “skill games” legality by distinguishing legal questions from character‐based licensing inquiries.

Complex Concepts Simplified

“Good Character, Honesty and Integrity”: A statutory standard requiring an individualized showing that an applicant is trustworthy and law‐abiding. It is not a label to be stamped or withheld on the basis of an industry category.
Agency Discretion vs. Judicial Review: Agencies may use expertise to make policy choices, but courts ensure those choices rest on evidence, sound reasoning, and legal authority. “Arbitrary and capricious” means decisions made without rational justification or based on irrelevant factors.
Section 704 of the Administrative Agency Law: Sets the standard for appeals from agency adjudications—courts affirm unless decisions violate law, constitutional rights, or are unsupported by substantial evidence.
“Skill Games” Industry Context: Devices blending elements of chance and skill, operated in unlicensed bars and convenience stores. Their legality under the Gaming Act and criminal code has been litigated separately; here the question was solely about licensing suitability, not device legality.

Conclusion

The Supreme Court’s decision in Brozzetti v. PGCB marks an important reaffirmation of fair adjudicatory procedure in Pennsylvania’s gaming regulation. It underscores that even where an industry is controversial or under legal scrutiny, administrative agencies must evaluate each license applicant on his or her individual merits. Broad policy objections or economic concerns—even if rational—cannot substitute for the statute’s command that licensees demonstrate by clear and convincing evidence their personal “good character, honesty and integrity.”

This ruling will guide the Gaming Control Board—and all licensing bodies—in making reasoned, evidence‐based determinations and will protect applicants from unfair blanket judgments based solely on the sectors in which they have operated.