This article is part two in a three part series from Cashplay to educate game developers about the legalities and best practices surrounding skill gaming - both online and mobile.
Skill gaming competitions with real money winnings are legal almost everywhere worldwide, including within most states in the US. In my view, this competitive gaming industry has the chance to have the same positive impact on the gaming community that online poker had in the mid-2000s.
We at Cashplay helped create this wave in the mobile gaming sector at the beginning of 2013 with the introduction of our breakthrough cash tournament mobile skill gaming system.
Our skill gaming platform plugs into thirdparty titles and helps developers monetize their audience in a more engaging way than advertising or IAPs ever could achieve.
Adding our SDK converts single player titles into multiplayer experiences, and makes all eligible games playable for real money
We aim to protect game developers and players who are engaging with this industry through ongoing public education programs.
With this strategy in mind, I've decided to write a series of three articles outlining the basics that every person curious about real money skill gaming would want to know in order to engage with and safely benefit from the massive income and excitement that comes when adding real money into gaming.
We strongly believe that the industry needs to police itself, working only in the black and white of legality.Jarrod Epps
In this article, we tackle the differences in the legal definition of skill games around the world.
Knowing the law
Real money skill gaming is exciting, makes a lot of money and is legal most everywhere when done correctly; however, as this is a relatively new industry you have to be careful not to be misinformed or you can end up in a lot of trouble.
As an example, we were recently introduced to a skill gaming company that claims to use an algorithm to determine the amount of chance a game contains. Based on their analysis of the impact that amount of chance has on the outcome, they then determine if a particular game is a skill game or not.
Rather alarmingly, this company recently decided to go into international markets using this definition to release such titles worldwide.
By definition, a skill game in the vast majority of territories worldwide must have no random chance at all affecting the outcome. Any deviation from this 100% skill factor leads to a game being considered gambling and therefore illegal in most territories. In this case, if you were to act upon the advice you were receiving in terms of the definition of skill, you would be putting your company at risk.
The fact is that getting bad advice, and then acting upon it, can get you in serious legal hot water through fines or even imprisonment.
Although skill gaming is not yet regulated, we strongly believe that the industry needs to police itself, working only in the black and white of legality instead of offering suggestions and solutions that can get game developers and players into trouble.
Examples affecting the legalities of a skill game
A mobile skill game is defined as a game where the determining factor in whether a player wins or loses is the player's ability to make the right decisions, take the right actions and act in a timely and/or precise manner.
If these abilities and their resulting effect on the game's outcome are in any way over-ridden by elements of chance embedded in the game, the game in question can no longer be considered a skill game.
In essence, a game has to offer the exact same opportunities for both players to win the game, without the influence of random luck that can be brought through a deck of cards, a roll of the dice, random number generation or mix or colors/tiles changing the level of difficulty from player to player.
- If player 1 gets X for a board in a puzzle game, player 2 must also get that same X, not X plus something or X brought in with a random mix, at a somewhat different time or within a different part of the screen.
For an example of a game that some consider skill, but which is forbidden by law in most places due to the elements of chance involved, simply look to poker.
While any poker player knows that over the course of a tournament, a long grind worked through the hands of a seasoned pro is likely to deliver the best result, it is at the same time true that a favorable random card on the river can overcome any influence that knowledge, skill and judgment had on the outcome and can hand the game to the lesser player.
Due to this aspect of random chance and its influence on the game's outcome, poker is almost universally regarded from a legal perspective as gambling as opposed to a game of skill.
- To give simple illustration of a skill within mobile gaming, if a driver on a race course goes around a turn and a balloon drops in front of the car, the other drivers competing with this first driver must have that balloon drop in the same place at the same time in the race.
Or, if a game incorporates pre-game choices, such as variations of characters or upgrade element the player can select from a variety of options, as long as both players have the ability to select from that same list, this selection is in fact considered a part of the skill they demonstrate in playing the game.
If instead, the players can gain an advantage by buying certain characters or upgrade options, the element of skill is lost.
In cash tournament instances within Cashplay-enabled games, these premium elements are typically presented equally to all players, giving them a chance to see what upgrades are available within the game.
The resulting effect on our cash players is that they tend to understand more what the premium features do within the game, and they are more likely to go back into non-cash tournament sessions within the game to purchase those upgrades so that they can practice their skill and learn to compete in an identical environment to that which they experience in the cash gaming instance.
Texas is the only US state with case law defining the 'amount of chance' allowed in a skill setting.Jarrod Epps
Taking things a step further with the inclusion of artificial intelligence, say with a sports game like football where defenders react in certain ways, the definition for determining skill remain the same.
If, for instance, all players competing make the same play selections, attempt the same evasive moves and try to complete the same passes at the same time, and if the resulting defense would react to all players in the same way, then the game is still defined as a skill title.
US versus international skill game definitions
It is true that a few variations on how much 'chance' is allowed is defined in a handful of US states, however the vast majority of states go with the premise that pure skill must be the only factor determining the game's outcome, not skill plus some variation of chance.
Texas is the only state with case law defining the 'amount of chance' allowed in a skill setting, however they are alone in their precise assessment and determining law. And, if we all went by Texas law, we'd be driving around with a beer in one hand and a gun in the other. More fun, sure. But is it safer? Definitely not.
Like most US states, under the vast majority of laws in international territories absolutely zero chance is allowed within a skill game. If you want to release a game worldwide with cash tournaments included, you must be sure your game is a pure skill title.
To be clear: there is no such thing as an algorithm that will determine the amount of chance you can have in your game to be legal. You can get in big trouble following bad advice from fledgling advisors or partners who put forth this logic.
As a practical measure, you should be sure that you are comfortable that your chosen supplier can answer all the questions you have in regards to legality, and that they operate best-in-class processes to protect player funds, player identity, your profits and your freedom.
Jarrod Epps is the CEO and founder of leading skill game tournament system Cashplay, which helps game developers to monetize their titles through real cash player versus player tournaments.
To learn more about skill gaming, you can download Cashplay's legal white paper Skill Gaming in the United States, or contact Cashplay at email@example.com