Many gambling enthusiasts in the United States are at least vaguely familiar with the Indian Gaming Regulatory Act, US law Pub.L. 100–497, 25 U.S.C. § 2701.
Passed in 1988, this federal law established how Indian (Native American) gaming would be managed and regulated. The act included definitions for 3 types or classes of gambling games. They are usually referred to as:
- Class I games
- Class II games
- Class III games
Congress passed the law to help Native American tribes and nations improve their economic status after more than a century of oppression and exclusion in mainstream US society. Many Native American groups wanted to build land-based casinos, which would not only attract tourists but create jobs.
Founded in 1991, Video Gaming Technologies, Inc. (VGT) is a leading developer, manufacturer and distributor of Class II (Native American bingo-based gaming) casino games in North America. But, VGT is more than a simple slot machine manufacturer. They are also behind the popular Live-Call Bingo machines. These machines are actually bingo machines with the appearance of a slot machine - including the spinnig reels!' It also said they were Class II machines. The IGT Universal Slant VGT video slot machine includes colorful lights that provide a stimulating experience for players. The lights on this slot machine utilize synchronized colors to match the theme of the game. The gaming machine is 27.8” wide, 30.8” deep, and 66.4” tall. This gaming unit is. The #1 provider of gaming machines in the state of Oklahoma. In the United States, VGT is the largest privately-owned manufacturer and developer of casino games. Ranked as the second-largest lessor of gaming machines to Indian tribes in the United States.
There was considerable resistance to this movement in many states, most of which did not allow gambling of any kind. To help resolve the conflicts and provide some clarity between treaties, state law, and federal law, the US government established a framework that eliminated some barriers to Native American investment in gambling industries. The law also provided some regulatory limits to respect state laws.
The Indian Gaming Regulatory Act introduced some confusion into the worldwide lexicon of gambling games because the distinctions are only observed within US jurisdictions. Other nations regulate gambling with different definitions.
But as the internet became a worldwide communications network in the 1990s and 2000s, most of the content published about gambling dealt with US law and casinos. Although non-US casinos have to observe their own laws and regulations, players who research gambling law on the internet must be careful to distinguish between USA gambling definitions and other gambling definitions.
What Are the 3 Classes of Gambling Games?
Class I gambling includes all traditional Native American gambling games, most of which are only used for ceremonial purposes or in the contexts of cultural-specific celebrations and ceremonies. These games, which are only available at small stakes, are completely regulated by the Native American tribes and nations.
Class II gambling includes all variations of bingo games, player-vs-player card games like poker (where the house does not play a hand in the game), tip jars, pull-tab games, punch card games, and anything similar. Some people mistakenly include lottery games in this category, but the law clearly excludes state-run lotteries and similar games from Class II.
Class III gambling consists of everything that is not included under Class I gambling or Class II gambling. That means the lottery games you play are Class III gambling games. Slot games, roulette, dice games, and card games like blackjack where the house is also a player all fall under the Class III gambling games category.
So How Can There Be Class II Slot Machine Games?
If you’ve ever visited a Native American casino–like the Winstar Casino in Oklahoma, you’ve almost certainly played some Class II slot machine games. They look much like traditional slot machine games. They have 3 to 5reels with symbols on them, they pay jackpots, and they do everything else you expect of a slot game.
And yet, they are not slot machine games.
A clever company in Franklin, TN, known as Video Gaming Technologies, or VGT, developed electronic bingo games for Native American casinos that use the results of those bingo games to emulate slot game action.
In other words, the slot machine cabinets contain two screens, one that displays the results of the bingo game and one that displays the results of the simulated slot game. This dual visualization of the gambling game takes advantage of the fact that at the core of all gambling games is a simple principle:
You’re making a wager on an unknown outcome. What the Class II slot games do is take the result of the bingo game to determine what happens in the slot game.
What’s cool about this approach is that VGT was able to add bonus games to the bingo games that work like slot machine bonus games. They’ve developed a huge selection of bingo games that play like slot games. VGT is so successful they were acquired by Aristocrat Leisure Limited in 2014, although the former VGT still operates as an independent subsidiary company of Aristocrat.
How Do Class III Slot Machine Games Work?
The key to the hybridization of bingo and slot machine games is the Random Number Generator. Mathematicians have been developing algorithms to calculate unpredictable numbers for hundreds of years. For a detailed look at the concept, read “How Do Random Number Generators Work?” on Jackpots Online. Although the RNG does not produce a truly random number, in typical circumstances the number is random enough. Even so, slot game designers use random numbers in multiple ways.
Before I continue, I should mention that US law requires slot game designers to work by different rules from other countries’ slot games. In the United Kingdom, for example, the outcome of a slot game is determined by a single random number. In the United States, the outcome of the Class III slot game is determined by several random numbers.
To begin with, an electronic slot machine or online slot game uses a software concept called an array to represent each reel. Computer arrays work like rows of boxes, where each box holds one piece of information. The arrays for slot reels may have anywhere from 22 to 256 slots. Each slot in the array holds a symbol marker that tells the slot machine game what to display on the screen.
Slot game designers use special algorithms to decide how often each type of symbol should appear in each slot array. The frequency of the symbol’s use in the array and the size of the array determine how likely or unlikely it is for any single spin of the slot game reels to create one or more winning combinations. The game’s software may award prizes for one or more winning combinations at a time, depending on how many pay lines the game offers.
The random number generator produces a new number every few milliseconds. The number is placed in a temporary memory location called a register. The slot game software grabs the latest random number from the register and uses that to determine what happens next. For example, a 5 reel slot game needs 5 random numbers to pick how many slot positions will be spun on each reel before the reels stop in new locations. If the slot game awards random prizes like progressive jackpots, these are determined by additional random numbers.
How Class II Slot Machine Games Differ from Class III Slot Machine Games
What VGT did was create bingo game software that determines the actual prizes awarded to players.
But to make the bingo games look like slot games, they used the bingo game’s random results as if they are the random numbers that Class III slot games use.
To ensure that the slot game winning combinations match the bingo game prize values the VGT games work more like slot games in the United Kingdom. The game determines what prize was won and then creates a short video simulation of the slots landing on that winning combination.
Conclusion
How do class II slot machines work?
Either way, the slot games award prizes on a random basis. You could say that US gaming laws are paranoid in that Class III slot game software is required to closely emulate the physical spinning of slot reels. In fact, physical slot reel games have been displaying results of these virtual, in-memory array games for more than 20 years. So even when you see physical reels spinning, their stop positions have already been determined within microseconds of your pressing SPIN.
The Class II slot gaming experience is a fun gaming experience.
But the bingo game is displayed on a small screen, because VGT’s designers have found that players don’t enjoy looking at bingo patterns as much as they enjoy looking at 3 to 5 reels spinning and stopping on various symbols.
For the player, what matters is that they’re gambling for real money on an unpredictable outcome–and they can enjoy an entertaining evening with friends or loved ones.
Consider the innocuously labeled SB 1256 the opening salvo of the Pennsylvania budget battle: Part Two.
When the Pennsylvania Senate left Harrisburg for their home districts on Sept. 22, lots of unfinished business remained. Chiefly, that’s passing a state budget for the rest of the fiscal year after having approved a stopgap spending measure at the end of May covering only part of the year.
So brace yourselves for a dark and bumpy ride.
The state’s second budget season commences on Oct. 5. The biggest and heaviest lift is passing a budget during November, likely not until sometime after Election Day on Nov. 3. And a reminder: PA has a long, strange tradition of sometimes bizarre last-minute deal-making on the eve of passing a budget.
As the Pennsylvania Capital Star put it in a recent opinion piece:
“A fall debate on the commonwealth’s budget is going to be painful for everyone in Pennsylvania. Relations between the Administration and the Republican majority in the General Assembly are frayed, making negotiations difficult.”
Senate holds a hearing on VGTs and skill games bill Oct. 6
As part of the windup, the Senate goes back to work in the capital on Oct. 5. And while it’s not strictly a budget measure, there’s a much-anticipated hearing the next day on an important bill, Senate Bill 1256.
That’s pet legislation of Sen. Jake Corman, the Republican majority leader (pictured, lead image). The 29-page legislative proposal focuses on expanding video gaming terminals, or VGTs, and expressly legalizing games of skill.
But the bill assigns no taxation level to the machines it seeks to allow and does not state how many devices might be allowed.
SB 1256 gets first hearing in public after a lull
Through July, Republicans secretly discussed the bill behind closed doors. But it failed to gain traction. Despite the shroud of backroom secrecy, Spotlight PA scrutinized some of the machinations.
Corman had characterized the bill to Spotlight as a way to control and license the proliferation of illegal gambling machines in PA. He claimed expanding VGTs’ presence was somehow a matter of fairness, given the bill’s aim to widely allow skill games.
He also said the move would raise revenues but never named an amount.
Corman now has a casino coming to his district
Since Corman spoke to Spotlight in late June, there’s been one significant change and two additional developments.
First, a mini-casino license was auctioned off in his Centre County district for $7.5 million to Philadelphia real estate development and financial consultant Ira Lubert.
Next, Spotlight has written more recently about Corman and a so-called “dark money” fund overseen by a lobbyist he’s connected with. And then there was also his hiring of a lobbyist with deep ties to out-of-state VGT makers to lead his staff.
Meanwhile, the VGT and skills games bill has lain dormant since July.
That’s about to change.
Senator from Philly suburbs plans a hearing
Republican state Senator Thomas Killion‘s Community, Economic and Recreational Development Committee is holding a hearing on Bill 1256 beginning at 10 a.m. on Oct. 6.
Killion, who represents part of the Philadelphia suburbs in Delaware and Chester counties, is running for re-election in November. He did not respond to a request for comment. Neither did the committee’s co-chair, state Sen. Lindsey M. Williams, a Democrat who represents the Pittsburgh area.
Casinos and POM hate SB 1256
Proving that politics makes for strange bedfellows, all 13 PA casinos, which include the yet-to-open Live! properties, have opposed the Corman bill, but then so has Pace-O-Matic, the PA company that makes and distributes Pennsylvania Skills games.
The industry letter went out on Sept. 17 and was signed by the leaders of casino properties employing more than 20,000 Pennsylvanians. The casinos are:
- Mohegan Sun Pocono
- Harrah’s Philadelphia Casino and Racetrack
- Meadows Racetrack and Casino
- Hollywood Casino at Penn National Race Course
- Valley Forge Casino Resort
- Rivers Casinos in Pittsburgh and Philadelphia
- Parx Casino
- Presque Isle Downs & Casino
- Mount Airy Casino Resort
- Wind Creek Bethlehem, Lady Luck Casino Nemacolin
- Live!
Casinos’ position on SB 1256
In part, the casinos’ letter opposing the bill reads:
“Expanding VGTs to liquor licensees would result in as many as 85,000 gambling machines being added to the state — which is more than three times the current number of slot machines in all of Pennsylvania’s casinos combined. Similarly, legalizing (and thereby rewarding) the currently illegal skill game slot machines that are prevalent in bars, convenience stores, gas stations and other businesses would cause tremendous damage to our industry and the nearly 20,000 Pennsylvanians we are proud to employ, as well as negatively impact the Pennsylvania Lottery and the public interest. SB 1256 does exactly that.”
The letter also points out the recent economic losses the licensed casino industry — and the state — are still struggling with:
“Collectively, casinos suffered approximately $968.8 million in revenue losses from slot machines and table games (due to the virus shutdowns), $424.2 million of which would have been payable to the Commonwealth.”
Casinos reference “good faith” by the state
Additionally, the letter claims:
- “Stores, golf courses, microbreweries and a variety of other businesses could all potentially become miniature casinos.”
- “This bill would come at the expense of the Commonwealth in the form of lost tax revenue, gaming industry job losses and lost local share revenue.”
The letter concludes by pointing out the Commonwealth is a better than 50% stakeholder in the casino industry via fees and tax revenue, and finally, that the casino license holders invested in PA with the state “a good-faith partner.”
Legislative leaders mum on SB 1256
All members of the legislature got the letter.
Vgt Gaming Machines
But the letter addressed Corman in particular, as well as:
- Senate President Pro Tempore Joseph Scarnati III
- Senate Democratic Leader Jay Costa
- Assembly Speaker Bryan Cutler
- House Majority Leader Kerry A. Benninghoff
- House Democratic Leader Frank Dermody
PlayPennsylvania sought comments from all of the legislative leaders. None responded.
But a spokeswoman for Scarnati referred the request back to Corman. “Any questions regarding VGTs and skill games would be best directed at Senate Majority Leader Corman’s office,” she said.
Scarnati is retiring at the end of the session in December. Corman is seen as his likeliest successor should the Republicans maintain their majority in the PA Senate.
Wolf also stays quiet
Governor Tom Wolf, a Democrat who is frequently at odds with the Republican-led Legislature, has expressed quiet opposition to expanding gambling further as contemplated in the bill.
His spokesperson did not respond to a request for comment.
Pennsylvania Skills game distributor has its say
Pace-O-Matic of PA, or POM, hates the bill.
The Williamsport company, which distributes Pennsylvania Skills machines, has been taking its opposition to rival skill games and VGTs to the streets. POM is outing what it says are illegal casinos openly operating in small towns around the state. POM is holding press conferences in front of the businesses. Dossiers on those businesses were handed off to district attorneys in Lancaster, Schuylkill and Beaver counties recently.
POM’s pitch is that its games are legal and its rivals’ are not. That’s because the Beaver County Common Pleas Court six years ago found that an element of skill was necessary to win the three games found on one seized POM device.
For a time, POM used that court win and a subsequent injunction as it distributed more machines and even sued a competitor, saying the rival did not offer a skill game.
But then another court in November 2019 labeled skill games as slot machines. The enforcement injunction was lifted in January 2020. POM has appealed the lifting of the injunction, but that case is plodding through the courts.
PGCB and PA State Police take stances against skill games
The Pennsylvania Gaming Control Board (PGCB) has definitively labeled skill games, including POM machines, as illegal slot machines under the state’s gaming laws.
The PA State Police unequivocally say all gambling devices outside casinos, other than licensed truck stop VGTs, are illegal and subject to seizure.
Vgt Gaming Machines
POM continues, though, to try to differentiate itself from rival wagering device companies, most recently at a Harrisburg press conference.
POM: It’s not us, it’s those other guys
Mike Barley, a spokesman for POM, issued a written statement to PlayPennsylvania when asked about SB 1256:
“While we believe the regulation of skill games will greatly benefit small businesses, restaurants, bars, fraternal clubs and the Commonwealth, SB 1256 promotes the widespread proliferation of VGTs on every corner of Pennsylvania. This legislation would kill the legal skill game industry and countless Pennsylvania small businesses, many [of] which are multigenerational family businesses, in the coin-op industry. SB 1256 puts the interests of large out-of-state companies over these family-owned small businesses.
Vgt Slots Youtube 2020
“While Pennsylvania Skill games, powered by Pace-O-Matic, have been adjudicated legal and require skill, a VGT is a slot machine which directly competes with the games already offered in casinos. Illegal VGTs, masquerading as ‘skill games,’ are already on the street, many in unregulated mini-casinos, and were recently seized by the District Attorney of Berks County.
“The claims that the lottery or casinos have lost revenue due to skill games ring hollow when you examine the numbers. Before the COVID-19 pandemic, the revenues related to casinos and lottery were at record highs. That was at the same time the revenue for skill games [was] growing. We contracted with an independent economist who reviewed the data and found that our games have not had a negative impact on either the casinos or lottery revenues. The lottery’s study was conducted internally and the details have not been released.”
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Lead image credit: AP Photo/Matt Rourke