Skill games' roots in Pa. trace to allegedly arranged Beaver County raid

The skill games that have spread to taverns, social clubs and corner stores all over Pennsylvania in recent years started with one arranged seizure in a small Beaver County social club.

On Tuesday, Nov. 19, 2013, Pennsylvania State Police troopers entered Aliquippa’s American Italian Club in a faded brick building on the corner of Irwin and 20th streets to confiscate what would later be deemed the state’s first skill game.

The incident had been pre-planned to test the game’s legality in Pennsylvania, according to court documents and multiple sources who spoke with NewsWorks Lab.

“I had assurances from the state police that no one was going to get arrested,” Wayne DeLuca, a former lawyer for the game’s manufacturer, Pace-O-Matic, said during a 2020 deposition in a trademark dispute. “It was just going to be a controlled buy, so to speak.”

New details discovered by NewsWorks Lab raise critical questions about the highly unusual origins of an industry that now encompasses an estimated 70,000 skill-game machines across Pennsylvania. The future of those machines hangs in the balance as the clock runs toward Oct. 13, when the state Supreme Court’s June ruling saying the games are illegal slot machines takes effect.

Lawmakers could decide before then to regulate skill games, which resemble slot machines found in casinos but allow losing players to win back their money by successfully completing a complex puzzle.

Pennsylvania State Police “is currently waiting to see if the state legislature responds to the Pennsylvania Supreme Court’s recent decision on skill games,” spokesman Chris Caracino said in an emailed response to questions. “In the absence of any legislative action, PSP is prepared to act.”

The bureau is working with local enforcement agencies on a response that will give business owners an opportunity to respond, he said.

“PSP will strongly encourage voluntary compliance with the court decision and offer a route for businesses and operators to voluntarily remove the machines,” Caracino said.

The Beaver County seizure involved a different, earlier version of the device at issue in the recent Supreme Court decision, Caracino said. He declined to comment on whether the agency worked with Pace-O-Matic to arrange the seizure, saying the employees who were involved no longer work for PSP.

He added that State Police would not answer questions related to the circumstances of the Beaver County seizure because Pace-O-Matic, or POM for short, filed an ongoing lawsuit against PSP in 2022 in Commonwealth Court in Harrisburg, alleging organized harassment by the State Police and its Bureau of Liquor Control Enforcement starting in 2018.

“The Bureau’s relationship with POM was not always hostile,” the company wrote in the initial complaint in that case, noting the “friendly” seizure by State Police in Aliquippa in 2013 as an example.

The state Supreme Court agreed in its June ruling that skill games’ origin story in Pennsylvania traces directly back to Beaver County and the Pace-O-Matic game, which goes by the brand name Pennsylvania Skill.

“That [Beaver County] decision is important… for its role in the history and development of the ‘skill game’ industry in Pennsylvania,” the court order says. “Following the Beaver County case in 2014, the device surged in popularity, as POM and its industry partners touted the ruling in the Beaver County case in their efforts to assure potential customers of the device’s legality.”

The raid

Normally seeing uniformed state troopers enter a club that has a gambling machine would worry workers or owners of a business that serves alcohol. They know they could be arrested if the game is illegal.

The employees and the president of the cozy social club – with a 16-seat bar, four dart boards, a pool table, juke box, and a banquet area that holds about 60 people – didn’t have to worry that night, DeLuca said.

As a trooper took the table-top Pace-O-Matic video gambling machine from the end of the bar, it was all part of a unique, possibly unprecedented, deal between the State Police and Pace-O-Matic, according to federal court records and multiple sources who spoke with NewsWorks Lab.

“Pace-O-Matic in 2013 needed a human being – any human being – to put one of its machines into a location in Pennsylvania for the premediated purpose of having law enforcement seize the device,” Pace-O-Matic wrote in a court filing in the federal trademark case that it won against Pennsylvania Skill Games, later known as Unis Gaming. “The seizure would then trigger a lawsuit from Pace-O-Matic to recover the machine, which (hopefully) would result in a court decision that the device and its software was predominantly a game of skill, not chance.”

The gambit worked. Just over a year later, Beaver County Court of Common Pleas Judge Harry Knafelc ruled the “sacrificial” game – as Pace-O-Matic called the machine in a federal court document – was legal.

“This case is weird and raises a lot of questions,” said John Rago, a professor at Duquesne University’s Thomas R. Kline School of Law, and an expert on criminal law.

DeLuca, a long-time western Pennsylvania gaming-company lawyer who represented Pace-O-Matic, said in an interview with NewsWorks Lab that he came up with the novel plan in 2013 to have the game intentionally confiscated. He also described the deal in two federal civil case depositions.

“The State Police wanted a decision; Pace-O-Matic wanted a decision,” DeLuca said in an interview. “And I thought the best way to do it was to have them pick the game up and let’s litigate it.”

He also decided to place the machine in Beaver County, he said, “because Beaver County is a good county to litigate in and gambling wasn’t a big, offensive thing in Beaver County.”

Pennsylvania State Police

Pace-O-Matic’s website POMWorks.com says it provided its game to the State Police and that “it was subsequently agreed to submit the game to a Pennsylvania Court to determine the legality of the game.”

But Pennsylvania courts do not have a mechanism to “submit” games for evaluation, or, as some states do, to ask the state Attorney General for an opinion.

To get around that, DeLuca said he called Ricky Goodling, who was then corporal of the State Police’s Compliance, Auditing and Gambling Enforcement Unit within the Bureau of Liquor Control Enforcement. At first, he asked Goodling if he thought the game was legal, according to Matt Haverstick, Pace-O-Matic’s current Pennsylvania attorney.

Goodling’s “belief at the time was that we [had] an illegal game,” Haverstick said.

The Beaver County case later convinced Goodling of the game’s legality, Haverstick told NewsWorks Lab.

Goodling could not be reached for comment. After he retired from the State Police in March 2018, he went to work for Pace-O-Matic two months later in May 2018 as a compliance supervisor, the company said. He later moved up to be the company’s state and then national compliance director.

Earlier this year Goodling pled guilty to criminal charges that included taking payoffs from customers so that he would not report them to Pace-O-Matic for not abiding by the company’s rules. Those charges cost him his job in 2023 when Pace-O-Matic first heard about them, company spokesman Mike Barley said.

Goodling is currently serving a minimum of nine months of home detention, which includes a provision that allows him to go to his weekly Gamblers Anonymous meeting.

Goodling was not the only State Police official to later work for Pace-O-Matic.

Goodling’s boss at the time of the seizure, Thomas Butler, was then director of the State Police Bureau of Liquor Control Enforcement. He retired in April 2016, and in August 2020, became one of Pace-O-Matic’s part–time compliance officers working for Goodling in Pennsylvania, according to testimony Goodling gave in the federal trademark case. Butler did not respond to requests for comment.

Frank Noonan, State Police commissioner from 2011-2015 during Gov. Tom Corbett’s administration, began serving on the Pace-O-Matic board in 2022. He did not return calls left for him at his office.

Typically, under a state gaming statute, State Police officers involved in enforcement – as Goodling and Butler were – are prohibited from working for those businesses for two years after they leave the force.

Goodling, and other State Police officers who came to work for Pace-O-Matic, didn’t have to follow that law, said Barley, the company’s spokesman, because that law refers to businesses that are either an “applicant or licensed entity.”

“At that time, our games were not regulated by the state gaming act, so this provision would not have applied,” Barley wrote in an emailed answer to questions. “Even then, the BLCE held that our games were illegal, and I’m not sure that would have constituted a relationship in the manner defined by statute.”

He added, “Whether this would apply when formal regulations are put in place, that remains to be seen and [is] something we would not oppose.”

Easy ruling

DeLuca said he asked a longtime client and local distributor of games named Albert Unis III to choose a club to place the game.

Unis said in an interview that he chose the American Italian Club – where he already had an ATM machine, according to a copy of the vendor agreement between Unis and the club, included in the federal trademark case – and delivered the game there in October 2013. Unis said he was aware the machine was part of a deal and that he wouldn’t face any trouble after the game was picked up by the State Police.

The Bureau of Liquor Control Enforcement, which investigates gambling devices in businesses with liquor licenses, then assigned local troopers to seize the game.

A bench trial that lasted just a couple hours on the morning of Sept. 26, 2014, featured testimony from conflicting experts about the game’s legality. Pace-O-Matic’s founder and owner, Michael Pace, came from the company’s headquarters in Georgia to testify about how the game was designed specifically for Pennsylvania. And Pace-O-Matic employee Ryan Wood played the game in court as he was asked questions by the attorneys and Judge Knafelc.

On Dec. 23, 2014, Knafelc issued his ruling that found that winning each of the game’s three levels – a series of tic-tac-toe puzzles, a bonus game, and finally a “Follow Me” memory game – on the machine was “predominantly” based on skill, not chance, and therefore not a “gambling device per se.”

“It was a very, very easy decision,” Knafelc said in an interview with NewsWorks Lab. “I played around with the game myself and maybe one out of 20 times I screwed up. You could use skill to win.”

Neither the confiscation of the game nor the court case got any public attention at the time. There was no news coverage. The American Italian Club didn’t even know there was a case after the game was taken back in 2013, said Danny David, the current president of the club, which has about 250 members.

“I don’t think we made much money on [the game] because nobody knew what it was,” David said in an interview. “So, when they took it, I figured they just took it because no one played it.”

Neither the Beaver County district attorney’s office nor the Pennsylvania Attorney General’s office, then led by Kathleen Kane, appealed Knafelc’s ruling. Kane did not respond to attempts to reach her. Current Attorney General Dave Sunday’s office also did not respond to questions for this story.

Albert Torrence, one of two Beaver County assistant district attorneys who handled the case in 2014, said the office had not anticipated the broader implications. He said it seemed “like a local issue to us” at the time.

“I think it was a question of resources for us, and I just don’t think it was seen as important for us,” Torrence said. “I think there was more of a strategy involved than we knew at the time.”

Torrence and Nick Francalancia, his co-counsel for Beaver County, said they never were told the seizure had been a “controlled buy,” as DeLuca put it.

“If that had happened that way [as an arranged confiscation], we would have gotten it into evidence,” Francalancia said, “and we would have possibly appealed knowing that.”

Questions raised

If prosecutors had known the seizure had been arranged, they “could have just chucked everything out” and not allowed the case to move forward, said Andrew Richards, an instructor in the Department of Criminal Justice and Intelligence Studies at Pittsburgh’s Point Park University.

An arrangement between Pace-O-Matic and the State Police also could have violated case law that requires each of the two parties in a case to have “real adverse interests in order for a court to take a case,” said David Harris, a professor of criminal law at the University of Pittsburgh’s law school.

“From one point of view, this [Beaver County] case is simply a test case,” he said, “and from another point of view the parties aren’t really in opposition.”

Whether it is legal or proper protocol for the State Police to participate in an arrangement that benefits a private company is an open question, legal and criminal experts say. None of the experts that were interviewed for this story, nor those involved in crafting the arrangement, said they had ever heard of the Pennsylvania State Police participating in such an exchange.

“The alleged arrangement is absolutely unusual,” Duquesne’s Rago said. “I’ve never heard of anything like that.”

NewsWorks Lab is a public-benefit company owned by Trib Total Media to produce high-impact, accountability journalism as a free, open-source resource. You may find more information at NewsWorksLab.com.

Sean D. Hamill and Sophia Lucente are contributors to NewsWorks Lab.
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