Pa. company pleads guilty in illegal video gambling scheme, but charges have been dropped against the owners

A Pennsylvania company has pleaded guilty to a crime stemming from its work installing hundreds of illegal video gambling devices across the state — but its owners appear to be off the hook.

Schuylkill County-based Deibler Brothers Novelty Co. pleaded guilty Friday to corrupt organizations, a first-degree felony, and was ordered by a judge to forfeit $3 million to the state in cash and assets, according to the office of Pennsylvania Attorney General Dave Sunday.

The company is owned by brothers Arthur Deibler, 34, and Donald Deibler, 33, and their friend Joel Ney, 35, each of whom was charged in 2024 with multiple felonies, including corrupt organizations and conspiracy.

Court records show the charges were withdrawn Tuesday. Sunday’s office said that was part of the plea agreement, which also required the company to pay the asset forfeiture up front.

“We expect those charges to be dismissed by the attorney general,” said defense lawyer William J. Brennan, who represents the Deibler brothers along with Michael T. van der Veen.

Prosecutors say Deibler Brothers marketed its illegal devices as legal skill games — the slot machine-style games that have proliferated across Pennsylvania — and paid kickbacks to an executive at a device vendor.

State lawmakers have repeatedly pledged, but so far failed, to tax and regulate the games. The Pennsylvania Attorney General’s Office has argued that the games are illegal slot machines — essentially unregulated casino games — but courts have thus far disagreed.

“For many years, the legal status of games of chance has been a ping-pong ball in the court system,” Brennan said. “From day to day, it’s hard to follow what the current state of the law is. This corporation has done everything it can to try to remain compliant in a changing legal landscape. This result allows all the parties to move on and put this matter behind them.”

Sunday, a Republican, said in a statement Monday that the plea resolution “secures a substantial forfeiture of assets to the commonwealth.”

“This company was warned time and time again and continued to snub its nose at state regulations by flooding Pennsylvania counties with illegal gambling machines,” he said.

A grand jury presentment accused Deibler Brothers of supplying thousands of illegal video gambling devices — modified slot machines — to convenience stores, bars, and gas stations across more than a dozen counties.

From April 2021 through November 2023, the company received more than $1 million a month from the distribution and operation of the machines, according to the presentment from the 50th Statewide Investigating Grand Jury.

In an effort to “disguise” its use of illegal slot machines, Deibler Brothers also paid $150,000 in illegal kickbacks to an executive at device vendor Pace-O-Matic, the presentment said.

The executive — Ricky Goodling, a retired Pennsylvania State Police corporal and Pace-O-Matic’s former director of national compliance — pleaded guilty last week to state money laundering charges. He also pleaded guilty to federal tax evasion charges.

Deibler Brothers sought to commingle its illegal games with legal Pace-O-Matic machines to try to “dupe” law enforcement authorities and store owners into thinking they were the same, the presentment says.

Pennsylvania courts have ruled that Pace-O-Matic games are legal games of skill, not chance, because they include a memory component that distinguishes them from casino-style slot machines. But most of the machines distributed by the Deibler Brothers had no such secondary element and were therefore illegal, the presentment said.

Goodling used his authority at Pace-O-Matic to quash complaints about Deibler Brothers and another firm that paid him kickbacks, according to the grand jury.