SKILL GAMING
Regardless of the state’s criteria, if it deems skill gaming as gambling, its statutes and regulations would dictate its governance.
without a multistate agreement, the pool of players would be limited, making it difficult to achieve enough liquidity to match players. Alternatively, the games could be designated as esports which would fall under mobile sports betting, thereby allowing many more states to offer them. Again, there would still be the requirement for a multi-state agreement for liquidity purposes. The state would also need to permit wagering on esports, and their laws would need to permit the players to wager on the esports events that they participate in. A third alternative would be to simply regulate them as games of skill. This approach would still raise the issue of how each state differentiates between skill gaming versus gambling, but it would permit each game to be evaluated on a case-by-case basis for suitability. This would eliminate guesswork regarding which games can be offered legally. Regulation in the retail space While online skill-based gaming presents notable challenges, the legality of certain skill games in the retail environment is a pressing concern. Manufacturers of these games have found innovative ways to disguise what looks like a slot machine as a skill-based game. Others have found ways to combine skill with randomness that skirt local laws often inviting legal challenges. Despite these games potentially meeting legal definitions of skill, players aren’t easily fooled. Even those believing they can consistently outplay these games soon realize otherwise. As these games permeate truck stops, convenience stores, and other venues nationwide, the regulated gaming industry is taking notice. Casinos and slot machine manufacturers see these games as direct, unfair competition, urging lawmakers to intervene. They argue that these machines evade regulatory standards, licensing, testing, and lack necessary operating controls for things like responsible gaming. Concerns about these games are not confined to industry stakeholders; everyday citizens share their worries. A survey by the American Gaming Association 1 revealed widespread apprehension:
The case for regulation – in the online space Comparing traditional competitive events to online computerized games highlights a significant disparity in visibility and accountability. Unlike observable tournaments, where the contestants are in plain view making it clear who is competing and that they are following the rules, online competitions rely on trust in the operator to ensure fairness, compliance, and ethical conduct. Proponents for regulation would say that an unregulated online competition lacks transparency, because contestants have no way of knowing who they are competing against, the contestant’s age, if they are using technology to assist them, if they are playing a real person or if the outcome has been scripted. Further, unlike regulated gambling, there is no evaluation as to the good character and integrity of the operator, no required testing of the game, no KYC standards, and no regulatory oversight of their operation. Additionally, because computer-based skill games can be completed in minutes, contestants can compete multiple times in one day, leading to issues of responsible gaming. While some skill gaming operators welcome regulation to ensure fairness and deter unethical companies from entering the market, others oppose it citing redundancy, increased costs, and the stifling of innovation. Additionally, those arguing against regulation say they have evaluated state laws and only offer their games where legal. They argue that regulation is not needed because they proactively implement policies to address the age of contestants and fairness, and that they would face legal challenges if they did not strictly enforce those controls. Certainly, regulating skill-based games in the online space does not come without its challenges. For instance, if the games are deemed to be gambling, then only states which authorize online casino games would be able to offer them. Further,
1 https://www.americangaming.org/new/unregulated-skill-machines-are-games-of-chance-say-two-thirds-of-americans-familiar-with-them/
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IMGL MAGAZINE | JANUARY 2024
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