HARRISBURG — The state Supreme Court in a series of strongly-worded decisions on Thursday rejected efforts by the state Gaming Control Board to withhold licenses from business owners who’ve distributed and operated skill games.

The issue arose when the business owners sought video gaming terminal licenses from the Gaming Control Board and were rejected for violating a clause that requires licensees to have good character.

In a majority decision written by Justice David Wecht, the justices agreed with the state Commonwealth Court, which had also rejected the Gaming Control Board’s attempt to reject the licensees based on the board’s character clause. However, the justices said the Commonwealth Court had gone too far when it ordered the board to issue the licenses. Instead, the justices said that there may be other issues for the board to consider before granting the licenses, so the opinion released Thursday only focused on the good character clause and simply directed that the case was being remanded “for further proceedings consistent with this opinion.”

In the decision, Wecht wrote that while the legality of skill games hasn’t been firmly established, as lawmakers have failed to enact legislation regulating their use and the court hasn’t handed down a final decision, the games are commonly available.

“The industry that has sprung up around them involves thousands of Pennsylvanians who are under the impression that they are operating fully within the bounds of the law. They have been led to believe this through court rulings and through the representations of the device manufacturers and their lawyers. Given this landscape, it is reasonable for these individuals to believe that they are doing nothing wrong,” Wecht wrote. “It is, thus, excessive and unfair for the Board to declare that every individual involved in this industry lacks “good character, honesty and integrity” merely due to their involvement in the industry. Absent any other evidence to support that determination with regard to a specific applicant, an adjudication of this sort is arbitrary, capricious, and an abuse of discretion, and accordingly must be reversed.”

The court could settle the question of whether skill games are legal in a separate case, centered on a Dauphin County dispute. In that case, state police in 2019 seized three games and $525 from Champions Bar after law enforcement deemed the games illegal games of chance. The legality of skill games has centered on this distinction — whether a player can win the game by playing with skill or whether the games, like slot machines, are won merely by chance.

In the Dauphin County case, Commonwealth Court in 2023 ruled that the games were, in fact, games of skill, and thus were legal.

The Supreme Court has agreed to settle the matter and parties from all sides, as well as a variety of interested parties have filed briefs in support of or opposing the legality of the skill games.

Gov. Josh Shapiro has called on lawmakers to pass legislation formally recognizing that skill games are legal and allowing the state to regulate the machines and collect tax on skill game play.

Shapiro’s proposal would collect 52% of the gross terminal revenue from play on skill games and the governor’s budget estimates that would generate about $369 million.