Federal investigators have seized more than $400,000 from a retired Pennsylvania State Police corporal who, until recently, served as compliance director for Pace-O-Matic, the maker of Pennsylvania skill games at the center of a legal quandary over whether they are gambling devices.
The Internal Revenue Service’s Criminal Investigation branch posted a notice of forfeiture on Sunday listing $443,052 in cash and accounts seized from Rick Goodling, who worked as national director of compliance for Georgia-based Pace-O-Matic Inc, according to a notice posted online by the IRS.
A spokesman for Pace-O-Matic said Goodling resigned from his position with the company more than a month ago after company officials became aware of the IRS investigation regarding his personal tax filing.
“We have and will continue to cooperate fully with the IRS investigation and will continue to cooperate with law enforcement regarding this issue,” spokesperson Mike Barley said in a statement provided to the Capital-Star.
Goodling did not return a call for comment on Monday.
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Pace-O-Matic is the state’s leading distributor of skill games – slot machine-like devices that allow players to pay to play a game to win a jackpot. The company contends, and a state court has agreed, that the games are distinguishable from slot machines because players must use skill to win, rather than relying on chance.
The Pennsylvania Attorney General’s Office last week filed a petition in the state Supreme Court to appeal a November Commonwealth Court decision that skill games are not gambling devices and therefore are not illegal.
Goodling testified in a Senate Community, Economic and Recreational Development Committee hearing on skill games in October that he retired from the Pennsylvania State Police in 2019 after 27 years. During his service, Goodling said he became recognized as a national expert in illegal video gaming devices and led the state police gambling unit for more than 15 years.
In a 2019 House Gaming Committee hearing, Goodling testified that Pace-O-Matic has a team of former state troopers and liquor enforcement officers tasked with visiting the company’s clients “to weed out illegal gaming machines that should not be in the marketplace.” The team reports illegal machines to state police and encourages organizations such as fire companies and VFW halls to replace illegal gambling machines with skill games, Goodling testified.
The company says skill games provide a vital stream of revenue for small businesses and fraternal organizations.
Pace-O-Matic does not disclose how many machines it has in operation in Pennsylvania or publish revenue figures except in the District of Columbia and Wyoming where it is required by law to do so. According to the Wyoming Gaming Commission’s annual report, distributors of Pace-O-Matic’s game Cowboy Skill reported a combined $74.5 million in revenue in 2022.
IRS spokesperson Eric Smith said the agency could not comment on the investigation into Goodling’s tax filings beyond what the public notice states.
According to the notice, on Nov. 14 and 15, IRS Criminal Investigations seized from Goodling $152,862 in cash and froze Goodling’s bank accounts at PESCU Credit Union in the amount of $81,871, at PNC Bank in the amount of $194,413, and Bogowe Consulting in the amount of $13,906.
While litigating the legality of its devices in Pennsylvania, Pace-O-Matic has also pushed to have the machines regulated and taxed, which lawmakers who support the idea say would raise millions in new revenue for the state.
The company has been politically active, donating more than $1.8 million to state campaign committees since 2017 including $43,500 to state Sen. Gene Yaw (R-Lycoming) who is the prime sponsor of legislation to regulate and tax skill games. Miele Manufacturing, which builds Pennsylvania Skill Game units for Pace-O-Matic, is located in Yaw’s district. Yaw’s law firm has also filed lawsuits on behalf of Pace-O-Matic against lobbyists it accuses of intentionally spreading false information to damage its business.
Pace-O-Matic faces opposition from the gaming industry and from lawmakers who say the games have been a scourge in their communities, bringing crime and enticing minors to use the devices.
Sen. Minority Leader Jay Costa (D-Allegheny) told the Capital-Star last year that Pennsylvania’s gaming law was written to hold casino operators accountable to a strict set of regulations and that their investment in complying with the law is diminished by unregulated gaming machines.
Read the story on the Pennsylvania Capital-Star website.