Skill-based gambling machines (SGMs), which merge the chance-based rewards of electronic gaming machines (EGMs) with video game-like skill requirements, are popular among players worldwide. However, evidence suggests those same players don’t always understand the reality of how the games work.
So, just what are SGMs, and how do they differ from traditional EGMs like slots and poker machines?
‘Skill’ Element Impacts Gameplay, Not Payout
As noted, skill-based gaming machines offer players a twist by combining skills often employed in video games with randomized rewards typically associated with EGMs.
However, while SGMs integrate video game attributes, outcomes remain purely chance-determined. Unlike most video games, SGMs can merely suggest the application of skill, even when the possible rewards remain static. Conversely, EGMs involve no pretense—players only need to press the button to prompt each spin.
In practice, the “skill” element of SGMs only translates to whether a player makes a bet, not how likely they are to win. For example, in shooting-style skill games, making a shot is the equivalent of pressing a slot’s “spin” button. When a player misses the target, they are not losing the bet. Instead, it’s as if they attempted to push the spin button and failed—nothing happens.
As a result, a skilled player who hits more targets is making more bets. But that doesn’t change the game’s win rate, also known as return to player (RTP).
Unfortunately, research has shown that players don’t always understand that nuance.
Research Suggests SGMs Boost ‘Illusion of Control’
A recent academic collaboration between Australian and UK researchers compared the appeal and behavioral consequences of playing SGMs to traditional reel-based EGMs. Betting behavior (including bet size and persistence), illusions of control, and players’ subjective experience were of particular interest.
According to the study’s results, SGMs particularly appeal to younger adults, regular EGM players, and those exhibiting increased signs of problem gambling.
The investigation found “no significant difference in overall betting intensity between SGM and EGM players.” However, some groups exhibited faster betting speeds when playing SGMs.
The research team also found that SGM players exhibit greater “illusions of control” than their EGM counterparts.
Despite identical payout structures, people assigned to play SGM showed greater illusions of control, believing in the influence of skill on game outcomes and that practice could improve results.
The researchers say this disconnect is creating new regulatory challenges.
The visual and interactive features of SGMs, while appealing, might contribute to these perceptions, indicating a need for careful regulation and further research on their long-term impacts on gambling behaviour and harm.
A player’s perception of exercising skill, true or not, may plausibly affect betting decisions, said the researchers.
The core of the illusion of control lies in individuals’ beliefs that their skills can impact their results, even when such beliefs are baseless.
The study’s authors added that it is crucial to note EGM players also experience illusions of control. However, these findings suggest that such illusions are “likely more pronounced” for SGM-type games.
More Research Required for SGMs
The researchers behind the study concluded that regulators face “difficult trade-offs” when considering permitting access to novel games, like SGMs, and restricting potentially harmful products.
Our findings reveal risks for vulnerable groups who find SGMs uniquely appealing, yet hold overconfident beliefs about skill and control of outcomes that are particularly prompted by these games.
They also argued that while their results “provide initial insights” into SGM-associated risks, the games require more research to inform definitive policy recommendations.
Specifically, they noted that their study tested only one type of SGM, restricting conclusions about a broader range of games. For instance, fish table games, like those at issue in North Carolina, can have higher betting rates.
As a result, they argued that future studies should investigate randomized assignments, longer play exposure, and more diverse SGM examples. They said considering these variables would produce more “robust and generalizable” insights.
Nevertheless, in the meantime, the team suggested possible pre-cautionary responses, including requiring mandatory pop-up messaging emphasizing the “dominance of chance.”
Further suggestions include enforcing a transparent display of paytables, instituting bet limits, forcibly reducing bet size after continuous losses, and prohibiting the intentional exploitation of cognitive biases.
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