CANADIAN REGULATION
Or, to continue with the verbiage in this article, you are providing a “not-gambling” product.
Gotskill?: Celebrating 10 years and counting The first skill-gaming operator to make headlines was Pong Marketing and Promotions Inc. (“Pong”, and later “Play for Fun” or “SBG”) with its game “GotSkill?”. 3 Here is how the game worked at the time Pong and the AGCO began their dispute. 4 Like a slot machine, GotSkill? has reels that spin to reveal prizes. However, unlike a slot machine, a player is given information about the amount of the potential next win of the machine. Using information about the potential next win of the machine, the player chooses whether to play or not. If the player chooses to play, the game proceeds through two stages. The first stage is known as the “amusement phase” during which reels are presented to a player. If the potential win is not zero, the animation reveals a winning line combination or scatter pay. The second stage is known as the “skill task” which consists of a cursor moving back and forth at a constant speed across an area with 21 bars. Each bar is assigned a percentage value of between 55 percent and 110 percent. Once the player presses the “stop” button, the cursor stops moving. The challenge is to stop the cursor as close to the middle of the area as possible. The closer the cursor is to the middle when it stops, the greater the percentage. If the player stops the cursor in the middle of the area, the player receives 110 percent of the player’s win during the amusement phase. The outcome of the skill task depends entirely on the player’s hand-eye coordination. Once the game is complete, the player’s “actual win” is the amount won during the amusement phase multiplied by the percentage value obtained on the skill task. It was not disputed by the parties that the “skill task” component of GotSkill? is dependent solely on skill and not chance. 5
Skill-game cabinets in Ontario One “not-gambling” product (or maybe it is a gambling product) that has made headlines in Ontario lately is skill-gaming machines. These machines have the look and feel of slot machines, but the gameplay mechanics are designed such that the games are considered games of skill. Skill-gaming machines are physical cabinets that are placed in locations like bars, restaurants, and convenience stores. Ontario is the largest province in Canada, hosting nearly 40 percent of Canada’s population. It is also one of two provinces (along with British Columbia) that do not have video lottery terminals in licensed establishments. Therefore, placing a “not- gambling” machine that looks like a slot machine in a licensed establishment is a high-value proposition, due to the lack of competition with slot machines and video lottery terminals. Ontario is not the only jurisdiction dealing with skill-gaming machines. The U.S. state of Pennsylvania, for example, has been a key battleground state for skill games. Courts in Pennsylvania have determined that skill-gaming machines fall outside of Pennsylvania’s Gaming Act. Therefore, the machines are not subject to the same regulations as slot machines. As with Ontario, these machines are typically found in restaurants, bars, and gas stations. In response to the lack of regulation, a bipartisan bill was introduced in the Pennsylvania Senate in November 2025 that would regulate and tax these machines. 2 Back to Ontario, there have been two notable skill-gaming products available in bars and restaurants over the last few years. The Ontario regulator, the Alcohol and Gaming Commission of Ontario (“AGCO”), has taken markedly different approaches to those skill-gaming products.
2 Pennsylvania Senate Bill 1079, An Act providing for skill video gaming; imposing duties on the Department of Revenue; providing for issuance of licenses for skill video gaming; imposing a fee and criminal and civil penalties; and providing for zoning, retrieved from https://www.palegis.us/legislation/bills/text/PDF/2025/0/SB1079/PN1301, November 14, 2025. 3 The AGCO Information Bulletin describes the game as being provided by Pong. See here: https://www.agco.ca/en/news/info-bulletin-no46-le- gality-got-skill-game-licensed-establishments The applicant in the court case was Play for Fun Studios Inc. (“Play for Fun”), and later became Skill Based Games Inc. (“SBG”). 4 Play For Fun Studios Inc. v. Registrar of Alcohol, Gaming and Racing, 2018 ONSC 5190. 5 Ibid.
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IMGL MAGAZINE | DECEMBER 2025
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