A recent report by the American Gaming Association (AGA) suggests that 65% of Americans familiar with skill-game machines believe the devices are games of chance, like slots. The report also points out that, unlike slots, skill-based machines are not regulated and taxed because they exist in a legal gray area. However, there seems to be considerable public confusion about what “skill” and “luck” really mean.
Skill machines are often found in small businesses like bars, convenience stores, and truck stops. AGA President and CEO Bill Miller said that manufacturers of these machines are tricking consumers and businesses while avoiding regulation and taxation. As for the report’s findings, he added:
These results are further evidence that Americans see these machines as a threat that should be eliminated, not regulated.
Naturally, the AGA is also interested in eliminating unregulated competition to its members’ legal products.
AGA’s previous research estimates that there are over half a million skill machines in the US, accounting for about 40% of all gambling machines in the country.
Furthermore, the AGA report also suggests that a large part of Americans familiar with skill games view them negatively:
- 71% believe skill machines lack player protection available in casinos.
- 64% agree that skill machines are easily accessible to children.
- 56% believe skill games increase crime risk and endanger the site’s employees.
- After being informed of the taxation and regulatory issues, 64% expressed concerns about skill games in their communities.
AGA President Miller added that establishing a legal market is the only way to keep the gaming industry strong and safe. He said skill games are detrimental to the industry as manufacturers fail to address illegal gambling.
How Do Skill Games Differ From Slots?
Found across states like Pennsylvania and Virginia, these games resemble real money slots. However, skill game manufacturers argue that their games are not a form of gambling. By definition, gambling has three components:
- Consideration: You must pay to play
- Reward: You receive something of value if you win
- Chance: Results are random
The element of chance is where manufacturers argue their games differ. Instead, they say skill games require the player’s skills to win. For example, one manufacturer, Pace-O-Matic, says players need “memory retention skills, pattern recognition skills, and eye-hand dexterity” to win.
At the beginning of the year, a judge in Pennsylvania ruled that Pace-O-Matic’s machines are legal. That case has now moved to the state’s Supreme Court.
Some states have tried banning skill games because of their unclear definition and interpretation. Most recently, Kentucky banned the games as of July 1. Virginia also voted to ban them, but that has yet to proceed. Meanwhile, a bill legalizing skill games in Michigan died last year.
Many Players Believe Casino Games Are Games of Skill
AGA’s report aims to show the danger of unregulated skill machines.
However, in citing the percentage of players who consider the machines to be games of chance, the AGA fails to make a meaningful comparison. Many casino games, like poker and blackjack, also blend luck and skill. The perception of these likewise varies from person to person. Some players even hold incorrect beliefs about skill playing a role in purely random games like slots.
One survey by data and analytics group YouGov shows that 35% of US adults believe blackjack is a game of skill, while 44% would consider it a game of chance (the remainder weren’t sure or had never played).
The same YouGov survey found that 54% of respondents believe that poker is a game of skill, while 28% see it as a game of chance.
The game perceived as the most luck-based in the YouGov survey was Go Fish, at 63%, comparable to the AGA’s findings about the so-called “skill” machines.
However, the study only included one game, which, like slots, is devoid of any meaningful decision-making. Only 54% of respondents said Chutes & Ladders was a game of luck, while 11% called it a game of skill.
On the other hand, Connect Four involves no randomness or hidden information. Mathematically, it falls into the same category of games as chess. Yet 21% of YouGov respondents classified it as a game of chance.
These numbers go to show how unreliable player perception can be when it comes to gauging a game’s skill content or lack thereof.
Do Skill Machines Prey on Problem Gamblers?
There is a risk of problem gambling arising from the location of skill game machines in small establishments. Opponents of these machines argue there is no way to control and protect players, especially those with gambling problems.
In a convenience store, where the clerk is busy checking out customers, signs of problem gambling are less likely to be noticed. Additionally, there are no responsible gaming features like self-exclusions. Nothing stops a gambling addict who has self-excluded themselves from gambling to walk in and start playing one of those machines.
Additionally, problem gamblers often have an illusion of control. They believe they possess special skills that give them an advantage. That’s why a machine advertised as needing skills to win is a perfect bait for those players.
A further problem is the accessibility of the machines to minors. Again, a minor could simply walk in and start playing if the staff is busy. That’s why regulation is so important.
The Gray Market Status Quo is the Worst Option
Whether the machines require real skill or should be considered games of chance is debatable. Typically, the decisions they offer are trivial, yet it is possible to make the wrong choice.
The question of what should be done about them. However, either option—banning or regulation—would be preferable to the middle road of allowing them to continue in an unregulated fashion.
Lawmakers in multiple states have tried passing laws to do one or the other, but it’s easier said than done. Whichever direction a state is leaning, it will face resistance.
Pennsylvania is perhaps the most prominent battlefield on which this dynamic plays out. Pace-o-Matic’s court victory has led the Pennsylvania Gaming Control Board to call on lawmakers to provide some clarity. Republican Senator Gene Yaw introduced a bill in April to regulate them. His Democratic peer, Senator Amanda Cappelletti, more recently introduced a rival bill to ban them.
Naturally, Pace-o-Matic and its customers will oppose Cappelletti’s bill, while legal gambling operators like the state’s casinos and lottery are likely to resist Yaw’s.
Elsewhere, there’s a push towards regulation in Virginia. However, it’s coming from a business coalition. The coalition hopes to convince the General Assembly to regulate the machines and let them stay. They believe skill games are good for the community and the industry.