Pennsylvania Novelty Game Company Pleads Guilty in Sweeping Illegal Gambling Case

In a landmark development that has sent shockwaves through Pennsylvania’s gaming industry, Deibler Brothers Novelty Company has admitted guilt in what prosecutors are calling one of the state’s most extensive illegal gambling operations. The case, announced by Pennsylvania Attorney General Dave Sunday on February 9, 2026, reveals a complex web of illicit gaming machines that infiltrated businesses across more than a dozen counties.

The Schuylkill County-based company pleaded guilty to corrupt organizations, a first-degree felony, in Schuylkill County Common Pleas Court. As part of the plea agreement, Deibler Brothers was placed on probation and ordered to forfeit a staggering $3 million in cash and other assets to the Commonwealth. This substantial penalty represents one of the largest forfeitures in Pennsylvania’s ongoing crackdown on illegal video gaming operations.

Attorney General Sunday didn’t mince words when addressing the company’s actions. “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 stated emphatically. The Attorney General emphasized that this conviction marks the second major victory in recent days against offenders contributing to the chaotic environment of illegal video gaming in the state.

The case against Deibler Brothers Novelty Company is the culmination of a multi-year investigation involving the Pennsylvania State Police, the Attorney General’s Office, and the Bureau of Liquor Control Enforcement. Investigators discovered that the company had installed hundreds of unlawful video gambling machines in bars, convenience stores, and other small businesses across the state. These machines were often marketed in ways that suggested they were legal, creating confusion among both operators and customers about what state law actually permits.

What makes this case particularly intriguing are the connections that have emerged to other figures already under federal scrutiny. The owners of Deibler Brothers Novelty – Arthur Deibler, Donald Deibler, and Joel Ney – were affiliated with Rick Goodling, a retired Pennsylvania State Police corporal and former Director of National Compliance for Pace-O-Matic, a major supplier of so-called skill games.

In a twist that adds another layer to this complex case, Goodling pleaded guilty last week to money laundering charges. Federal authorities allege that from 2019 through 2022, Goodling concealed taxable income by mislabeling cash payments from gaming operators as business travel expenses. These payments, prosecutors claim, were made in exchange for allowing continued use of Pace-O-Matic machines outside company rules. The scheme resulted in “a tax loss of over $100,000 to the United States,” according to the U.S. Attorney’s Office.

Goodling, who now faces up to five years in federal prison, had previously served as a compliance officer for Atlanta-based Pace-O-Matic. Interestingly, as recently as 2023, he had publicly defended skill games as legal, arguing that they rely on player ability rather than chance. This defense now stands in stark contrast to the guilty plea he entered just days before the Deibler Brothers case was announced.

The Deibler Brothers case is part of a broader push by state and federal authorities to rein in illegal gambling activity in Pennsylvania. The Pennsylvania Gaming Control Board has also increased its enforcement efforts, recently adding 22 people to its involuntary exclusion lists. These individuals are now barred from casinos, video gaming terminals, and regulated online platforms.

The investigation revealed that Deibler Brothers Novelty Company had operated with apparent impunity for years, placing machines in locations far beyond their Schuylkill County base. The company’s reach extended to bars, convenience stores, and other small businesses across more than a dozen counties, creating a network of illegal gambling operations that authorities say generated millions in illicit revenue.

One of the most concerning aspects of the case is how the machines were marketed. Authorities say that Deibler Brothers used deceptive tactics to suggest their machines were legal, exploiting loopholes in public understanding of gaming laws. This strategy not only violated state regulations but also put small business owners at risk of unknowingly participating in illegal activities.

The $3 million forfeiture ordered as part of the plea agreement is significant not just for its size, but for what it represents. This money will go directly to the Commonwealth, potentially funding further enforcement efforts or other state initiatives. It also sends a clear message to other operators of illegal gambling machines that the state is serious about enforcement and willing to impose substantial penalties.

The case has broader implications for the gaming industry in Pennsylvania and beyond. As states grapple with how to regulate new forms of gaming, particularly skill-based machines that occupy a gray area in many jurisdictions, the Deibler Brothers case serves as a cautionary tale. It highlights the importance of clear regulations and robust enforcement mechanisms to prevent exploitation of legal ambiguities.

For small business owners who may have unknowingly hosted these illegal machines, the case raises important questions about due diligence and liability. Many of these establishments were likely approached by Deibler Brothers with promises of easy revenue, unaware that they were participating in an illegal operation. This aspect of the case may prompt a broader conversation about how to protect small businesses from predatory gaming operators.

The connections between Deibler Brothers and Pace-O-Matic, as exemplified by Rick Goodling’s involvement, also raise questions about oversight within the gaming industry. How could a former compliance officer for a major gaming company become entangled in such a scheme? This aspect of the case may lead to calls for stricter background checks and ongoing monitoring of industry personnel, particularly those in compliance roles.

As the dust settles on this case, many are watching to see what comes next. Will this conviction lead to further investigations into other operators of skill games or similar machines? How will the $3 million forfeiture be used, and will it fund additional enforcement efforts? And perhaps most importantly, how will this case shape the ongoing debate about the regulation of skill-based gaming machines in Pennsylvania and other states?

The Deibler Brothers case represents a significant victory for law enforcement in their battle against illegal gambling. However, it also serves as a reminder of the challenges that remain in regulating an industry that continues to evolve and find new ways to operate in legal gray areas. As technology advances and new forms of gaming emerge, states will need to remain vigilant and adaptive in their approach to regulation and enforcement.

For now, the conviction of Deibler Brothers Novelty Company stands as a stark warning to others who might consider flouting state gaming laws. It demonstrates that even sophisticated operations with apparent connections to established industry players are not beyond the reach of the law. As Pennsylvania continues to refine its approach to gaming regulation, this case will likely serve as a reference point for years to come, shaping policy and enforcement strategies in the ongoing effort to maintain the integrity of the state’s gaming industry.

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“Flooding Pennsylvania counties with illegal gambling machines”

“Snubbing its nose at state regulations”

“Substantial forfeiture of assets to the Commonwealth”

“Disorganized environment of illegal video gaming”

“Multi-year effort involving state police and Attorney General’s Office”

“Connections to figures already under federal scrutiny”

“Retired Pennsylvania State Police corporal entangled in money laundering”

“Tax loss of over $100,000 to the United States”

“Up to five years in federal prison”

“Publicly defended skill games as legal”

“Rely on player ability rather than chance”

“Push by state and federal authorities to rein in illegal gambling activity”

“Involuntary exclusion lists”

“Banned from casinos, video gaming terminals, and regulated online platforms”

“Landmark development in Pennsylvania’s gaming industry”

“Complex web of illicit gaming machines”

“Deceptive tactics to suggest machines were legal”

“Exploiting loopholes in public understanding”

“Small business owners at risk of unknowingly participating”

“Cautionary tale for the gaming industry”

“Clear regulations and robust enforcement mechanisms”

“Due diligence and liability for small businesses”

“Predatory gaming operators”

“Oversight within the gaming industry”

“Stricter background checks and ongoing monitoring”

“Significant victory for law enforcement”

“Challenges in regulating an evolving industry”

“Legal gray areas in gaming”

“Adaptable approach to regulation and enforcement”

“Reference point for years to come”

“Maintain the integrity of the state’s gaming industry”

“Stark warning to others who might consider flouting state gaming laws”

“Beyond the reach of the law”

“Refine its approach to gaming regulation”

“Shape policy and enforcement strategies”

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