Kansas Skill-Based Game Legal Status Remains Unclear Following Supreme Court's Dismissal of Manufacturer's Lawsuit
Skill Games Remain Unregulated in Kansas Court Ruling
The Kansas Supreme Court has dismissed a lawsuit by Pace-O-Matic's subsidiary, POM of Kansas, seeking to establish the legality of its skill game, Dragon's Ascent. The court's decision leaves skill games in a vague legal territory in the state.
POM had initially sought confirmation from the Kansas Racing and Gaming Commission (KRGC) that Dragon's Ascent was legal under Kansas law. However, the KRGC did not officially decide on the game's legality, stating that it "involved some skill, but contained too many non-skill features, to allow mastery."
Growing frustrated, POM launched Dragon's Ascent and sought opinions from law enforcement agencies. Discussions with then-Attorney General Derek Schmidt revealed Kansas lacked a formal process to distinguish skill games from games of chance.
POM then filed a declaratory judgment in the Douglas County District Court, raising three claims:
- The Kansas Expanded Lottery Act does not apply to Dragon's Ascent.
- The game does not violate Kansas criminal gambling statutes.
- The term "chance" in the gambling statutes is unconstitutionally vague.
Following complex legal proceedings, the Supreme Court ruled that POM lacked standing to bring the suit, as it had not incurred any injuries. With no ruling on the game's legality, skill games continue to operate in a limbo without regulator oversight in Kansas.
Similar legal challenges arise in Pennsylvania, where the status of skill games remains uncertain. In 2023, a county judge ruled that Pace-O-Matic machines were not gambling devices, but the machines' status has yet to be clarified. Upcoming rulings by the Pennsylvania Supreme Court or legislative action may provide resolution to this issue.
In Kansas and Pennsylvania, lawmakers and stakeholders are actively debating how to best regulate and tax skill games, balancing economic benefits with industry concerns. As legislative discussions continue, the landscape for skill games in both states may evolve.
Insights
- Kansas lacks a specific legalization or regulatory framework for skill games. Online casino gambling and similar games involving skill for real money are illegal outside licensed venues, while social casinos and daily fantasy sports are legal.
- Pennsylvania classifies skill games as legal games of skill outside gambling laws, but they generate no tax revenue under current law. Legislation has been introduced to formally regulate skill games without imposing additional taxes, while taxation proposals range from a 52% rate to alternative rates of 16% and 35%.
- Despite the ongoing legal challenges, skill games continue to be a contentious issue in sports of law and policy-making, particularly in Kansas and Pennsylvania.
- The absence of a clear regulatory framework for skill games in sports like Kansas results in uncertain legal territories for these games, leaving them unregulated and outside any taxation system.
