The Rise of Pace-O-Matic: A Controversial Leader in the Skill Games Industry

The gambling landscape in the United States is undergoing a significant transformation, with "skill games" emerging as a major player. At the forefront of this blossoming — yet contentious — industry is Pace-O-Matic, a company founded by one of the industry’s most innovative minds, Michael Pace. Established in 2000, Pace-O-Matic has quickly become synonymous with skill-based gaming, generating both excitement and debate within the gambling community.

The Visionary: Michael Pace

Michael Pace’s journey into the world of gaming began over four decades ago, during which he made remarkable strides in the evolution of gambling technology. With a robust portfolio that includes the introduction of the first electronic countertop casino game, Little Casino, in 1980, and the launch of the Turbo 340 controller board in 1989, which became the foundation for game creation across many casinos, Pace established himself as a formidable force in the industry. Furthermore, his creation of Pot of Gold in 1990, the first electronic pull tab game, paved the way for electronic gaming as we know it today.

Under Pace’s leadership, Pace-O-Matic has emerged as a leader in the realm of skill games, introducing innovative titles such as Amigos Locos, Bombs and Bombshells, and House of Voodoo. While the company does not disclose the number of games in operation, its impact on the American gambling landscape is unmistakable.

The Business Model: Revenue Sharing with Operators

One of the pillars of Pace-O-Matic’s success is its commitment to supporting small businesses. According to Rachel Albritton, the company’s senior communications director, a staggering 80% of the revenue generated from its games is returned to business operators and local organizations that host the machines.

"This income," Albritton shared, "is used to make location updates, pay competitive wages, combat rising costs, and donate to charitable causes." Many establishments that offer Pace-O-Matic’s skill games, including restaurants, bars, and convenience stores, report that this supplemental revenue is crucial for their sustainability. For some, it has been the difference between closure and continued operation in a challenging economic environment.

A Booming Sector: The Skill Games Market

The global skill games market is rapidly expanding. Estimated at nearly $31 billion in 2022, it is projected to reach $85.34 billion by 2030, according to Fortune Business Insights. This growth speaks volumes about the increasing popularity of skill-based gaming, which, unlike traditional slot machines that rely solely on chance, encourages players to employ strategy and skill.

Despite this booming growth potential, the skill games industry remains largely unregulated in the United States, leading to significant controversies amongst stakeholders. The unregulated nature of skill games has ignited debates about fairness, taxation, and competition with traditional casinos.

The Controversy: Clashes with Traditional Casinos

The growth of skill games, particularly in states like Pennsylvania, has led to significant pushback from traditional retail casinos. Casino operators argue that skill games undermine their business and have campaigned for regulatory changes to deem them illegal.

In a decisive move this summer, several Pennsylvania casinos filed a joint lawsuit seeking a tax on skill games that is equal to the rates enforced on casino slot machines — a staggering 54%. This lawsuit was a response to a proposed 42% tax on skill games that failed to make it into the final budget presented by Governor Josh Shapiro for the 2024-2025 fiscal year.

Conclusion: A Future Full of Possibilities

The ongoing tug-of-war between skill game proponents and traditional casino operators highlights the evolving nature of the gambling industry. As Pace-O-Matic continues to lead the charge in introducing innovative skill gaming experiences, the outcomes of current legal battles and regulatory discussions will undoubtedly shape the future landscape.

As the recognition of skill games grows and their potential revenue streams become increasingly vital for small businesses, there’s no denying that the conversation surrounding Pace-O-Matic and the skill games industry will remain one of the most relevant and debated topics in the world of gambling. The question remains: Will the surge of skill games lead to wider acceptance and regulation, or will it remain a lightning rod for controversy? Only time will tell.