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Chanel Larche, Madison Stange, Kevin Harrigan, Daniel G.
Brown & Mike J. Dixon
University of Waterloo Gambling Research Lab
KTE Knowledge Hub
University of Waterloo, Canada
Prepared for Gambling Research Exchange Ontario
October 2016
Evidence Exchange:
The Current State of Skill-based
Gambling in North America
Final Report
Table of Contents
Executive Summary
Part I: Jurisdictional Scan
Introduction
Methods
Results
Summary
Nevada
New Jersey
Massachusetts
Ontario
Discussion
References
Part II: Scoping Review
Introduction
Methods
Search Strategy
Study Selection and Data Extraction
Results
Description of Included Studies
Discussion of Identified Themes
Theme 1: Structural Characteristics
Theme 2: Groups and Demographics
Theme 3: Harms and Consequences
Theme 4: Responsible Gambling
Discussion
Summary of Findings
Implications for Gambling Behaviour
Implications for Responsible Gambling
Conclusion
References
Appendix
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1
Executive Summary
There are various legalized gambling games in North America that are skill-
based. For example, card games like poker allow players to exercise objective skill in
order to maximize their winnings. Slot machines, by contrast, legally operate as games
of “pure chance”, in that players cannot influence their outcomes by any means.
However, a recently emerging trend in the design of gambling games is to incorporate a
component of objective skill into slot machine type games in the form of arcade-style
bonus rounds. Take, for example, the recent development of a “Space Invaders”
themed slot machine that is now available to players on casino floors in Nevada (Stutz,
2015). This particular game triggers a bonus round where a playerʼs skill (i.e. how well a
player can perform in this game) actually determines the amount of credits they can
gain. Such slot machine bonus rounds allow for the highly skilled to win more money
than those who are less skilled, resulting in a payback percentage that varies with
player performance.
Gambling Research Exchange Ontario issued an Evidence Exchange request for
the purpose of examining these newly developed skill-based slot machines. We present
two forms of research addressing this issue. First, we conducted a jurisdictional scan to
investigate the legal status of these skill-based games, including details about their
definitions found in legislation and how they are currently regulated. Next, we conducted
a scoping review (a type of systematic review) of the current academic literature
highlighting the potential risks and harms such games may present, as well as
responsible gambling initiatives that can potentially remedy or lessen such ramifications.
Below we have summarize the main findings documented in this final report.
Part I: Jurisdictional Scan Summary
• A comprehensive review of legislation and regulations surrounding skill-based
gambling games for each of the specified jurisdictions (Nevada, New Jersey,
Massachusetts, and Ontario).
• Plain language summaries of the changes to existing legislation and regulations
in the examined jurisdictions.
• Inter-jurisdictional comparisons focused on the changes in legislation and
regulations that accommodate the introduction and use of these skill-based
games.
• Implications for the province of Ontario are then discussed.
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Part II: Scoping Review Summary
• Games of skill, or games that involve skill, possess structural characteristics that
differentiate them from games of chance and other traditional gambling games;
legal classifications of these games often varies from jurisdiction to jurisdiction.
• Certain groups, based on age, gender and other demographic characteristics,
may be more vulnerable to the harms of skill-based gambling or may be more
likely to participate in these types of games.
• There are various harms and consequences associated with the involvement in
skill-based gambling forms. Specific concerns surround the development of
erroneous cognitions (particularly the illusion of control) and inaccurate
perceptions of luck and skill in such games.
• We explore responsible gambling strategies to possibly reduce harm that
accompanies participation in these games.
• Implications for gambling behaviour and responsible gambling strategies are
discussed.
3
Part I: Jurisdictional Scan
Introduction
This is a jurisdictional scan of skill-based slot machines in North America. Skill-
based electronic gambling games have been approved for use in three states: Nevada,
New Jersey, and Massachusetts. Pennsylvania has submitted draft legislation outlining
the development and distribution of skill-based games in licensed venues but it is not
included in this scan as those changes have not been approved (Lapetina, 2016). For
Ontario, which this jurisdictional scan is intended to inform, no legislative or regulatory
changes have been announced that will permit skill-based gambling games.
The interest in skill-based slots has come about because the popularity and
profitability of traditional chance-based slot machines is dwindling, especially among
young adults (e.g. millennials). For example, in Ontario, revenue generated from slot
machines and casinos have gradually decreased from $2.13 billion in 2011-2012, to
$1.96 billion in 2013-2014 (OLG, 2013; OLG 2016).
As outlined in the methods section, we consulted the respective legislations and
regulations of each listed jurisdiction for changes regarding the introduction of skill-
based electronic gambling games. The changes in each jurisdiction are expanded upon
in detail in the results section. Finally, we make inter-jurisdictional comparisons that
highlight similarities and differences in the adopted changes. Additionally, any
recommendations for responsible gambling (RG) practices outlined within the legislative
or regulatory changes are emphasized.
Methods
Jurisdiction
Documents Reviewed
Nevada
• Senate Bill No. 9 (SB-9)
• Nevada Revised Statutes
• Regulation 14 of the of the Nevada Gaming Commission
and Nevada Gaming Control Board
New Jersey
• New Jersey Statutes Annotated (N.J.S.A), New Jersey
Casino Control Act & Commission Regulations, Article 1:
4
Introduction and General Provisions
• Division of Gaming Enforcement Regulations, Chapter
69E: Gaming Equipment; Subchapter 13:69E-1.28A
Standards for the approval of a slot machine game
• Division of Gaming Enforcement Temporary Regulations:
Subchapter 13:69E-1.28Y Skill-based gaming
Massachusetts
• The 189th General Court of The Commonwealth of
Massachusetts, General Laws, Part I, Title II, Chapter
23K, Section 2: Definitions
• Massachusetts Gaming Commission, 205 CMR 102.00:
Construction and Application Draft Amendments
• Massachusetts Gaming Commission, 205 CMR 143.00
Gaming Devices and Electronic Gaming Equipment Draft
Amendments
Ontario
• Part VI of the Criminal Code of Canada
• Alcohol Gaming Commission Ontario (AGCO) Electronic
Gaming Equipment Minimum Technical Standards 2014
• Alcohol Gaming Commission Ontario Lottery Licensing
Policy Manual 2016
Table 1. Legislative and/or regulatory documents reviewed for each jurisdiction.
Results
Summary
The following sections outline both existing legislation, regulations and changes
that have recently been approved to allow for new skill-based gambling games in each
of the jurisdictions (Nevada, New Jersey, Massachusetts). We also consider regulations
and law for Ontario, where no changes have been planned or implemented to reflect
skill-based slot machines. For Ontario, we instead highlight the current legal structure
for gambling games involving elements of skill, to draw attention to regulatory changes
recommended should skill-based gambling games be approved in Ontario.
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Nevada
In Nevada, the process of approving skill-based electronic gambling games
began with the approval of Senate Bill 9 (SB-9). The contents of SB-9 were then
incorporated into the Nevada Revised Statutes (NRS), which are always the current up-
to-date codified laws of the State of Nevada (see http://admin.nv.gov/NRS/). Finally,
Regulation 14 of the Nevada Gaming Commission was updated to incorporate the
changes to the NRS. In this section we describe the important aspects of the SB-9,
NRS, and Regulation 14.
Legislation (prior to and after the approval of SB-9 and the revised NRS)
Nevada approved skill-based electronic gambling games in 2015. Prior to these
proposed changes, slot machines in Nevada adhered to the traditional, purely random
chance format. Current definitions of “slot machines” and “gambling games” are drawn
from Chapter 463 of the NRS (section 0191 and section 0153), which states:
“Slot machines are defined as any mechanical, electrical or other device,
contrivance or machine which, upon insertion of a coin, token or similar object, or
upon payment of any consideration, is available to play or operate, the play or
operation of which, whether by reason of the skill of the operator in playing a
gambling game which is presented for play by the machine or application of the
element of chance, or both, may deliver or entitle the person playing or operating
the machine to receive cash, premiums, merchandise, tokens or anything of
value, whether the payoff is made automatically from the machine or in any other
manner.”(NRS Chapter 463, section 0191).
In addition to legal definitions of slot machines, the state of Nevada also established
definitions for all gambling forms including games of skill. All games, whether of chance
or skill, were classified under the broad category “Gambling game”. The definition reads:
“Game or gambling game means any game played with cards, dice, equipment
or any mechanical, electromechanical or electronic device or machine for money,
property, checks, credit or any representative of value, including, without limiting
the generality of the foregoing, faro, monte, roulette, keno, bingo, fan-tan, twenty-
one, blackjack, seven-and-a-half, big injun, klondike, craps, poker, chuck-a-luck,
Chinese chuck-a-luck (dai shu), wheel of fortune, chemin de fer, baccarat, pai
gow, beat the banker, panguingui, slot machine, any banking or percentage
game or any other game or device approved by the Commission, but does not
include games played with cards in private homes or residences in which no
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person makes money for operating the game, except as a player, or games
operated by charitable or educational organizations which are approved by the
Board pursuant to the provisions of NRS 463.409.” (NRS Chapter 463, section
0153)
In the two definitions above, “skill” was not defined legally. It was with the proposed
changes to the legislation put forth in 2015 that lead to the development of a legal
definition of skill in order to encompass skill-based electronic gambling games.
The new legislation for skill-based gambling games, presented by the Senate Bill
9 (SB-9), outlines various legal constraints that help dictate the design, manufacture,
distribution and use of gaming devices that feature “innovative, alternative and
advanced technology” (SB-9, pp. 1). Importantly, the nature of skill in these games is
clearly defined as “the knowledge, dexterity or any other ability or expertise of a natural
person”. Moreover, the skill-based games themselves are also described as “... game[s]
in which the skill of the player, rather than chance, is the dominant factor in affecting the
outcome of the game as determined over a period of continuous play” (SB-9, Section
4d, pp. 3). As elements of skill are expected to be integrated into chance-based games
(e.g., slot machines), the legislation takes care to label these as “hybrid games”. In
hybrid games “a combination of the skill of the player, and chance affects the
outcome[s] of the[se] game[s] as determined over a period of continuous play.” (SB-9,
Section 4b, pp. 2). SB-9 also states that technical standards in operation prior to these
legislative changes must be revised in order to include features that fit these definitions
for skill-oriented games. The legislative amendments to Chapter 463 of the NRS
highlight the updated technical standards for manufacturers, requiring that they:
“ (a) Define and differentiate between the requirements for and the outcomes of a
game of skill and a game of chance; (b) Allow flexibility in payout percentages or
the outcome of a game as determined on the basis of nondiscriminatory
identifiers; (c) Support integration of social networking technologies; (d) Facilitate
among enrolled players the interactive and concurrent play of games supported
by networked server computers; (e) Accommodate secure account wagering and
transactions using electronic commerce; and (f) Require, when applicable,
appropriate information to be disclosed to a player explaining that the outcome of
a game will be affected by skill or identifiers.” (Section 3e-f, pp. 2)
In looking at these specifications, the differences of these games from regular slot
machines are clear. Games specified within this legislation can include the compatibility
with “social networking technologies” and an “identifier”, which essentially allows the
gameʼs difficulty to adapt to the playerʼs level of skill. An exact legal definition of the
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identifier is “any specific and verifiable fact concerning a player or group of players
which is based upon objective criteria relating to the player or group of players” (Section
4c, pp. 2), and also pertains to:
“(1) The frequency, value or extent of predefined commercial activity; (2) The
subscription to or enrollment in particular services; or (3) The use of a particular
technology concurrent with the play of a gaming device.” (SB-9, Section 4c, pp.
3).
Regulations
After the amendments to NRS chapter 463 found in SB-9 were passed, new
regulations for skill-based games and hybrid games were approved and implemented as
Regulation 14 by the Nevada Gaming Control Board (NGCB). These regulations
became effective as of February 15th, 2016 (Lapetina, 2016). Regulations by the NGCB
dictate the constraints for manufacturers and distributors of potential gaming devices,
casino operators (online and brick-and-mortar venues) and the game testing
laboratories. Prior to SB-9 and the revision to the NRS, no NGCB regulations address
any aspects of skill for game manufacturers and casino operators.
As the revised Regulation 14 came into practice, the concepts and definitions of
game features outlined in the SB-9 were expanded to precisely specify how these
games should be manufactured and accessed by the public. Skill-based games or
hybrid games alike must meet minimum technical standards in Regulation 14 before
they can be made available to casino operators. Technical standards mostly address
the mechanisms responsible for determining game outcomes. Specifically, the payback
percentage of the machines “must not be less than 75 percent for each wager available
for play on the device” (NGCB, 14.040, p. 8). However, unlike chance-based slot
machines, the payback percentage for skill-based games is influenced by a variety of
other factors. Outcomes of skill-based or hybrid games must be determined by the
application of: 1) Chance; (2) The skill of the player; or (3) A combination of the skill of
the player and chance. (NGCB, 14.040, p. 8). Skill-based or hybrid slot machines must
also adhere to the following standards:
“Display in an accurate and non-misleading manner: (1) The rules of play; (2)
The amount required to wager on the game or series of games in a gaming
session; (3) The amount to be paid on winning wagers; (4) Any rake-off
percentage or any fee charged to play the game or series of games in a gaming
session; (5) Any monetary wagering limits for games representative of live
gambling games; (6) The total amount wagered by the player; (7) The game
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outcome; and (8) Such additional information sufficient for the player to
reasonably understand the game outcome. (d) Satisfy the technical standards
adopted pursuant to Regulation 14.050”. (NGCB, 14.040, p. 8)
Other regulatory changes encompassing the nature of play and the determination of the
outcomes in skill or hybrid slot machines include, but are not limited to the following:
“(a) All be of the same denomination and have equivalent odds of winning the
common payoff schedule/common award based as applicable on either or both of
the combined influence of the attributes of chance and skill; or (b) If of different
denominations, equalize the expected value of winning the payoff
schedule/common award on the various denominations by setting the odds of
winning the payoff schedule in proportion to the amount wagered based as
applicable on either or both the combined influence of the attributes of chance
and skill, or by requiring the same wager to win the payoff schedule/award
regardless of the deviceʼs denomination. The method of equalizing the expected
value of winning the payoff schedule/award shall be conspicuously displayed on
each device connected to the common payoff schedule/common award. For the
purposes of this requirement, equivalent is defined as within a 5 percent
tolerance for expected value and no more than a 1 percent tolerance on return to
player or payback.” (NGCB, 14.040, p. 9)
To summarize, in addition to the actual, objective skill of the player, the technical
standards applicable to games of skill and hybrid games even extend to how individual
outcomes of the games are produced. In this case, payback percentage is described to
fluctuate or vary based on the factors of chance and skill of the player. The overt, visible
displays of how much skill or chance is involved in determining the outcome of the
game, instructions for play, and the bet minimum/maximum are also expressed within
these guidelines.
Additionally, revised Regulations 14 also emphasize the clear demarcation of the
skill-based slot machines as separate from regular, chance-based slot machines. It
states that “gaming devices that offer games of skill or hybrid games must indicate
prominently on the gaming device that the outcome of the game is affected by player
skill” (NGCB, 14.040, p. 9). It also states that such devices must “use an identifier to
determine which games are presented to or available for selection by a player”
(NGCB,14.040, p. 9)
The definition and details surrounding “identifiers” was broadened from that given
in SB-9 and the NRS to specify the exact functioning of these components and how they
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impact a playerʼs experience based on an individualʼs level of skill. For instance,
identifiers have been specified to affect “payout schedules” such that they “may broaden
and encourage participation in games with skill attributes, by providing, without
limitation, for partial prize awards, and prize awards for games with different themes or
based on the use of identifiers.” (NGCB, 14.100, p. 12). In accordance with the definition
outlined in the SB-9 legislature, the revised Regulations 14 outlines the following factors
that will allow gameplay to vary:
“(a) The frequency, value or extent of predefined commercial activity; (b) The
subscription to or enrollment in particular services; (c) The use of a particular
technology concurrent with the play of a gaming device; (d) The skill of the
player; (e) The skill of the player relative to the skill of any other player
participating in the same game; (f) The degree of skill required by the game; or
(g) Any combination of (a) to (f), inclusive.” (NGCB, 14.010, p. 3).
In addition to Regulation 14 that dictates the nature of player experience, there
are also other featural aspects being introduced that aim to transform individualized
play. The aforementioned “social networking” compatibilities specified by the legislation
was put into practice as modernized “inter-casino linked systems”. Since 1995, the inter-
casino linked systems have been identified as being a “network of electronically
interfaced similar games which are located at two or more licensed gaming
establishments that are linked to conduct gaming activities, contests or tournaments”
(NGCB,14.010, p. 3). Such sophisticated social network systems allow for players of
identical games to legally compete for prizes, either within or between casino venues. In
order to be compatible with skill-based games or hybrid games outlined under the SB-9,
inter-casino linked systems must be modified in the following way:
“...in the case of an inter-casino linked system featuring a progressive payoff
schedule that increases as the inter-casino linked system is played, have a
minimum rate of progression for the primary jackpot meter of not less than .4 of
one percent of amounts wagered. In the case of an inter-casino linked system
featuring a progressive payoff schedule that increases over time, have a
minimum rate of progression for the primary jackpot meter of not less than one
hundred dollars per day. The provisions of this subsection do not prevent an
operator from limiting a progressive payoff schedule as allowed by Regulation
5.112 (5). 2. Shall have a method to secure data transmissions between the
games and devices and the main computer of the operator, as approved by the
board. 3. Shall display the rules of play and the payoff schedule. 4. Shall meet
the applicable minimum standards for internal control that have been adopted
pursuant to Regulation 6.090.” (NGCB, 14.045, p. 9)
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Finally, an important aspect of the modified Regulation 14 is the responsible
gambling measures that must accompany these skill-based gambling games, which
ultimately target manufacturers and skill-based casino operators alike. Typically, the
responsible gambling practices in place are usually generalized to all forms of gambling.
For skill-based gambling games exclusively, “A gaming device must not use a theme
that is derived from or based on a product that is primarily intended or marketed for use
by persons under 21 years of age, or depicts a subject or material that is obscene”
(14.025, p. 7). These skill-based gambling games are expected to have several
commonalities with videogames in general (which are legally available to underage
persons) and thus discouraging underage interest for these particular games is
warranted. Overall, these standards and guidelines clearly reflect the importance of
discouraging underage gambling for this emergent form of gambling.
New Jersey
In New Jersey, temporary regulations have been enacted to allow for the
inclusion of skill-based slot machine games in casinos. We discuss the applicable
legislative definitions and the regulatory changes in this section.
Legislation
NJ Permanent Statutes (5:12-45) defines a slot machine as:
“Any mechanical, electrical or other device, contrivance or machine which, upon
insertion of a coin, token or similar object therein, or upon payment of any
consideration whatsoever, is available to play or operate, the play or operation of
which, whether by reason of the skill of the operator or application of the element
of chance, or both, may deliver or entitle the person playing or operating the
machine to receive cash or tokens to be exchanged for cash, or to receive
merchandise or anything of value whatsoever, whether the payoff is made
automatically from the machine or in any other manner whatsoever, except that
the cash equivalent value of any merchandise or other thing of value shall not be
included in determining the payout percentage of any slot machine.” (pp. 31,
N.J.S.A. 5:12-45)
Regulations
Pre-existing regulations specified various aspects surrounding slot machine
standards and approvals. One aspect of the existing regulations describes how slot
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machine games that involve skill should operate (13:69E-1.28A Standards for the
approval of a slot machine game). Specifically, it is stated that:
“A slot machine game that requires skilled strategy choices, such as video poker,
shall: 1. Have its theoretical RTP calculated based upon the player exercising
optimal strategy during game play; 2. Disclose optimal strategy to achieve the
highest theoretical RTP; or 3. Provide mathematically sufficient information for
the patron to derive optimal strategy in order to achieve the highest theoretical
RTP. (h) When a slot machine offers a play which relies on the knowledge of a
patron, such as a trivia challenge, or their physical dexterity, such as a game
utilizing a joystick, the overall payout percentage shall be calculated based on the
play of the least knowledgeable or skilled patron.” (p. 198, Division of Gaming
Enforcement, 13:69E-1.28A)
Presumably these criteria exist to govern already extant games such as video
poker or video black jack, which do rely on an element of skill. These existing
regulations contrast with the temporary regulations put forth on February 23rd, 2016 that
allow for newer, more advanced skill-based slot machine games (13:69E-1.28Y Skill-
based gaming). These regulations outlined a set of criteria to be implemented for the
introduction of skill-based slot machines. As with other jurisdictions, these regulations
made use of identifiers, defined here as:
“any specific and verifiable fact, used by a slot machine or skill-based game,
concerning a player or group of players which is based upon objective criteria
relating to the player or group of players, including, without limitation: 1. The
frequency, value or extent of predefined commercial activity; 2. The subscription
to or enrollment in particular services; 3. The use of a particular technology
concurrent with the play; 4. The skill of the player; 5. The skill of the player
relative to the skill of any other player participating in the same game; 6. The
degree of skill required by the game; or 7. Any combination of (1) to (6),
inclusive.” (p. 1, Division of Gaming Enforcement, 13:69E-1.28Y)
These identifiers may be used “to determine which games are presented to or available
for selection by a player.” (p. 1, Division of Gaming Enforcement, 13:69E-1.28Y)
A definition of skill-based gambling was also included in the temporary criteria,
specifying it as “any Division approved casino game where game outcome is dependent
in whole or in part upon the playerʼs physical dexterity and/or mental ability.” (p. 1,
Division of Gaming Enforcement, 13:69E-1.28Y) The new temporary regulations also
specify that:
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“Slot machine games with a skill-based component shall be required to
theoretically pay out a mathematically demonstrable percentage of all amounts
wagered, which shall not be less than 83 percent for each wager available for
play on the device; and Games which rely entirely on skill or do not utilize an
RNG are not required to achieve a minimum theoretical hold percentage.” (p. 1,
Division of Gaming Enforcement, 13:69E-1.28Y)
Additionally, “A skill-based game or slot machine with a skill-based component
may provide an adaptive feature to increase the payback percentage in order to improve
the actual RTP.” (p. 2, Division of Gaming Enforcement, 13:69E-1.28Y)
In terms of what information must be displayed to the player, skill-based slot
machine games as governed by these regulations must clearly and accurately display
the following information to the player:
“The rules of play; 2. The amount required to wager on the game; 3. The amount
to be paid on winning wagers; 4. Any rake or fee charged to play the game; 5.
The total amount wagered by the player; 6. That the outcome of the game is
affected by player skill; and 7. Such additional information sufficient for the player
to reasonably understand the game.” (p. 1, Division of Gaming Enforcement,
13:69E-1.28Y)
Additionally, “Gaming devices that offer games of skill or hybrid games shall
indicate prominently on the gaming device that the outcome of the game is affected by
player skill.” (p. 2, 13:69E-1.28Y) Other aspects of game play are also governed by the
regulatory changes, specifically:
“...once a game containing a skill-based feature is initiated, no aspect or function
of the gaming device may be altered during the play of the game based on the
skill of the patron to make an event more or less likely to occur.” (p. 2, Division of
Gaming Enforcement, 13:69E-1.28Y)
Further, “All possible game outcomes shall be available upon the initiation of each play
of a game upon which a player commits a wager on a gaming device.” (p. 2, Division of
Gaming Enforcement, 13:69E-1.28Y)
An interesting facet in the temporary regulations concerns player advantages that
may be gained within a game, which are structurally similar to those in mobile casual
games that involve a social-competitive element:
13
“Skill-based games may contain a feature allowing patrons to gain an advantage
over other patrons provided that all patrons are advised of that feature. Such
features may include but are not limited to patron purchased enhancements,
randomly awarded enhancements or other advantages.” (p. 2, Division of
Gaming Enforcement, 13:69E-1.28Y)
When games allow for one patron to have an advantage over others, the game must:
“1. Clearly describe to all patrons that the feature is available and the benefit it
gives to patrons; 2. Disclose the method for obtaining the feature; and 3. Provide
patrons with sufficient information to make an informed decision, prior to game
play, as to whether or not to compete against a patron who possesses such a
feature.” (p. 2, Division of Gaming Enforcement, 13:69E-1.28Y)
The temporary regulations also allow for players to compete against a computerized or
“skilled house sponsored opponent” as long as the game:
“Clearly and conspicuously discloses when a computerized or skilled house
sponsored opponent is participating; 2. Provides the patron with the ability to
elect whether or not to play against a computerized or house sponsored
opponent; and 3. Prevents the computerized or house sponsored opponent from
having access to information that is otherwise unavailable to a patron (i.e. the
opponentʼs hole cards or upcoming events).” (p. 2, Division of Gaming
Enforcement, 13:69E-1.28Y)
A further guideline specifies that “Peer to peer skill-based gaming shall be monitored for
collusion and money laundering activity using an automated feature or in accordance
with the internal controls of the casino licensee.” (p. 2, Division of Gaming Enforcement,
13:69E-1.28Y)
Massachusetts
In Massachusetts, regulatory changes were put forth in February 2016 to allow
for skill-based slot machines. The details and implications of these changes are
discussed.
Legislation (Law of Massachusetts)
14
Chapter 23K of the General Laws of Massachusetts specifies The
Massachusetts Gaming Commission. Definitional terms include “Game” defined in
M.G.L. Chapter 23K, Section 2 as “a banking or percentage game played with cards,
dice, tiles, dominoes or an electronic, electrical or mechanical device or machine played
for money, property, checks, credit or any other representative of value which has been
approved by the commission” (M.G.L., Chapter 23K, Section 2). This section defines a
“Gaming device or gaming equipment” as “an electronic, electrical or mechanical
contrivance or machine used in connection with gaming or a game.” (M.G.L., Chapter
23K, Section 2). Perhaps most importantly is how slot machines are defined:
“a mechanical, electrical or other device, contrivance or machine which, upon
insertion of a coin, token or similar object therein, or upon payment of any
consideration whatsoever, is available to play or operate, the play or operation of
which, whether by reason of the skill of the operator or application of the element
of chance, or both, may deliver or entitle the individual playing or operating the
machine to receive cash, or tokens to be exchanged for cash, or to receive
merchandise or any other thing of value, whether the payoff is made
automatically from the machine or in any other manner, except that the cash
equivalent value of any merchandise or other thing of value shall not be included
in determining the payout percentage of a slot machine.” (M.G.L., Chapter 23K,
Section 2)
Aspects of skill were included in this definition so that the legislation would not have to
be changed if skill-based slots were introduced. Specifically, a report Gambling
Compliance states that “The inclusion of operator skill in the broad definition gives the
state gaming commission the authority to implement skill-based gaming regulations
without any amendments to the Expanded Gaming Act” (Gambling Compliance, 2016).
Regulations (Code of Massachusetts Regulations)
The existing regulations surrounding structural aspects of gaming devices (205
CMR 102.00, Construction and Application) previously contained no instances of the
word “skill”. General definitions for “game”, “gaming device”, “gaming equipment”, and
“slot machine” are drawn from the existing legislation described above.
Changes to the Massachusetts regulations concerned two specific sections, the
first being Construction and Application (205 CMR 102.00). In this section, amendments
indicated that a game of chance should be defined as “a game in which randomness
determines all outcomes of the game as determined over a period of continuous play.”
(p. 1, Massachusetts Gaming Commission, 205 CMR 102.02) A game of skill is defined
15
as “a game in which the skill of the player, rather than chance, is the dominant factor in
affecting the outcome of the game as determined over a period of continuous play.” (p.
1, Massachusetts Gaming Commission, 205 CMR 102.02) A hybrid game is defined as
“a game in which a combination of the skill of the player and chance affects the outcome
of the game as determined over a period of continuous play.” (p. 1, Massachusetts
Gaming Commission, 205 CMR 102.02) Skill itself is defined as “the knowledge,
dexterity or any other ability or expertise of a player of an electronic gaming device.” (p.
2, Massachusetts Gaming Commission, 205 CMR 102.02) An identifier is defined as:
“any specific and verifiable fact concerning a player or group of players which is
based upon objective criteria relating to the player or group of players, including,
without limitation: 1) the frequency, value or extent of predefined commercial
activity; 2) the subscription to or enrollment in particular services; 3) the use of a
particular technology concurrent with the play of a gaming device; 4) the skill of
the player; 5) the skill of the player relative to the skill of any other player
participating in the same game; 6) the degree of skill required by the game; or 7)
any combination of 1) to 7) inclusive.” (p. 1, Massachusetts Gaming Commission,
205 CMR 102.02)
Other changes were proposed for regulation 205 CMR 143.00, concerning
Gaming Devices and Electronic Gaming Equipment. These included changing a general
statement governing all slot machines to include:
“All gaming devices must determine game outcome solely by the application of:
(1) chance; (2) the skill of the player, or (3) a combination of chance and the skill
of the player. A gaming device that includes any element of chance shall, for that
element of the game, at a minimum, utilize randomness in determination of
prizes, contain some form of activation to initiate the selection process, and make
use of a methodology for delivery of the determined outcome. Any gaming device
may be separated in parts, where some may be within or outside the gaming
device (e.g., gaming devices that function with a system).” (p. 1, Massachusetts
Gaming Commission, 205 CMR 143.01)
Other sets of changes specify what information needs to be displayed to the
player: “The rules of play for a game of skill or hybrid game must describe or display
information adequate for a reasonable person to understand the method of game play
prior to the player committing a wager.” (p. 1, Massachusetts Gaming Commission, 205
CMR 143.01) What needs to be included in the rules is determined by the following
factors: the theme of the game, the general publicʼs already existing knowledge of the
game, how much the game in question differs from comparable games outside the
16
casino environment, and the physical attributes of the game, such as whether it contains
the following:
“inherent skill-based on physical dexterity, endurance and strategy, such as in an
athletic activity; skill-based on expertise, education or experience, such as a word
or trivia contest; and dynamic skill-based on variations in the difficulty or
complexity of a skill activity that change in response to the playerʼs decisions,
acuity, agility, dexterity, game duration or an inherent game feature, such as a
military combat game”. (p. 1, Massachusetts Gaming Commission, 205 CMR
143.01)
These rules must be communicated by displaying them on the device, or in a
tutorial/demonstration on the device or at another location within the venue. If
applicable, rake-off percentages must be displayed to the player.
Changes to game play aspects of slot machine function were also proposed. For
example, the regulatory amendments also state that
“...once a game containing a skill-based feature is initiated, no aspect or function
of the gaming device may be altered during the play of the game based on the
skill of the patron to make an event more or less likely to occur.” (p. 2,
Massachusetts Gaming Commission, 205 CMR 143.01)
With reference to slot machine games that involve skill specifically:
“(a) All possible game outcomes must be available upon the initiation of each
play of a game upon which a player commits a wager on a gaming device. (b)
Gaming devices that offer games of skill or hybrid games must indicate
prominently on the gaming device that the outcome of the game is affected by
player skill. (c) Gaming devices must not alter any function of the device based
on the actual hold percentage.” (p. 3, Massachusetts Gaming Commission, 205
CMR 143.01)
Payouts on skill-based or hybrid slot machines:
“shall be governed by GLI-11, section 3.4.1. In addition to section 3.4.1, for each
enabled paytable, the gaming device must calculate the actual payback
percentage every N games, where N is the number of games necessary to
determine the theoretical payback percentage with a 95% confidence interval
within a range of +/- 5%.” (p. 4, Massachusetts Gaming Commission, 205 CMR
143.01)
17
Payback percentages as specified by the G.L.I standards are 75%, but the various
amendments bring this percentage up to 80% (specified in multiple places in the
proposed changes)
Many of the amendments focus on identifiers, which can be used to govern which
games a player gets to choose from. How identifiers are assigned depends on a specific
set of criteria:
“(a) The frequency, value or extent of predefined commercial activity such as the
patronʼs frequency of visitation or wagering activity at a gaming
establishment(s)/casino(s); activity on social media; or accumulation of rank,
points, or standing in either gaming or non-gaming activity; (b) The subscription
to or enrollment in particular services such as membership in a gaming licenseeʼs
customer loyalty program; (c) The use of a particular technology concurrent with
the play of a game; (d) The level of skill of a patron as identified or maintained by
the gaming system or self-identified by the patron; (e) The level of skill of a
patron relative to the skill of other patrons participating in the same game; or (f)
The degree of skill required by the game.” (pp. 3, Massachusetts Gaming
Commission, 205 CMR 143.01)
Ontario
Legislation
Ontario has not put forth any legislative amendments concerning the inclusion of
skill-based gambling games. Here, we describe existing legislation and regulations that
reflect skill-based casino games (e.g. poker, blackjack, etc.). The federal Criminal Code
of Canada forms the legislative framework for gambling activities in each province. Part
VII of the Criminal Code is the central segment that determines the legality of a
gambling activity. Throughout this section, gambling is generally regarded as an activity
governed by chance. Although chance is not given a legal definition within the code of
law, it has been defined by the Supreme court (R. v. Ross, Banks & Dyson ,1968). The
notion that chance is given predominant attention in the code of law is evident by their
definitions given for slot machines, wheels of fortune, dice and lotteries; here, we focus
on slot machines. In subsection 2 of the Criminal Code, slot machines are defined as:
“...any automatic machine or slot machine that is used or intended to be used for
any purpose other than vending merchandise or services” or (b) that is used or
intended to be used for the purpose of vending merchandise or services if (i) the
18
result of one of any number of operations of the machine is a matter of chance or
uncertainty to the operator, (ii) as a result of a given number of successive
operations by the operator the machine produces different results, or (iii) on any
operation of the machine it discharges or emits a slug or token, but does not
include an automatic machine or slot machine that dispenses as prizes only one
or more free games on that machine.” (Criminal Code, 1976)
As indicated above, the legislation refers to games that operate as games of chance.
There is no mention of player skill being involved in the outcomes of the game. Even
games that have a clear skill element involved, such as poker, are only discussed on
the basis of their aspects of chance, such as “dealing of playing cards”. Among all the
relevant sections in the Criminal Code, gambling games are only legally defined as
games involving chance (e.g. games of chance, or mixed chance and skill; Criminal
Code, 1976). Therefore, games of pure skill (e.g., chess) are not given any specialized
attention under this legislative framework.
Such legislative definitions have been adopted to reflect the gambling practices
and regulations throughout Ontario. Although there is no specific provincial legislation in
place for the games themselves, we have located some that offer insight into how
games are regulated in Ontario and by whom. The next section will explore these
regulations for skill-based games in detail. As a way of establishing a provincial regime
for the regulation of casinos and gambling venues, the Ontario Lottery Gaming
Corporation Act (formerly Ontario Casino Corporation until 1999) was enacted in 1992.
Under the OLGC, operators in Ontario were given authority to “(i) to conduct and
manage games of chance, and (ii) to provide for the operation of casinos”. The Alcohol
and Gaming Commission of Ontario (replacement of the Gaming Control Commission of
Ontario in 1996 with the introduction and passage of the Alcohol and Gaming
Regulation and Public Protection Act) is the current regulatory agency. The role of the
AGCO as regulator of gambling activities includes, among other things: “(i) enforcing
registration requirements and regulating the conduct of persons who supply goods or
services to a casino operation; (ii) approving the actual goods and services supplied in a
casino operation; (iii) approving the games of chance used in a casino operation; and
(iv) approving the operation of a casino.”
Regulations
In their “Lottery Licensing Policy Manual” (2016), the Alcohol and Gaming
Commission of Ontario (AGCO) outlines the following definitions and licensing criteria
for games of skill and ʻhybridʼ games consisting of both chance and skill (Chapter 3,
section 3.1.2) (AGCO, 2016). Specifically, it is noted that “in games of skill, the element
19
of chance is virtually non-existent. Checkers, chess, bowling, tennis, golf and all sports
contests are examples of games of skill.” When describing games with a combination of
skill and chance, “Games of ʻmixed chance and skillʼ combine both elements and
include most games played with cards. Blackjack is an example of a game of mixed
chance and skill” (Chapter 3, section 3.1.2) (AGCO, 2016). Evidently, these licensing
guidelines for manufacturers and operators only include traditional gambling forms,
especially how chance-and-skill hybrids games are framed as being restricted to card-
type games like blackjack.
Additionally, the AGCO also highlights specific technical standards for Electronic
Gaming Machines (EGMs) in the “Electronic Gaming Equipment Minimum Technical
Standards” (2014) for manufacturing and design purposes. Embedded within this
regulatory document is a formal definition of a “skill feature” that is common among the
games of skill described (e.g. video poker). Specifically, a skill feature is defined as a
“play on gaming equipment that requires a patron to make a choice as to how to
proceed in the game, where the ratio of the expected return from optimal play to the
expected return from worst play is at least 1.005.” (AGCO, 2014, pp. 80). Moreover,
Chapter 14 section 8 is of most relevance in terms of the requirements for games of
skill, and what skill can entail in possible machines. For instance, “skill” within EGMs is
articulated as “physical ability”, or “selection” to the extent of conveying “strategy”. As a
control measure for such games, the AGCO outlines that:
“Where strategy or selection advice is provided to the player, it must be fair and
not misleading, and the player must be able to override automatic selection and
reject any or all strategy advice provided. Once a patron has achieved the
highest award offered on a play by a strategy/skill feature, the gaming equipment
must not permit the patron to risk the award by making an additional strategy or
skill choice. If the outcome of a game cannot be impacted by a playerʼs physical
ability, the game must not offer an option to the player which appears to require
physical ability, unless the game provides a disclaimer that states that player
interaction has no impact on game outcome.” (Chapter 14, Section 8, points 1-3)
(AGCO, 2014)
These technical standards govern the extent that “skill” should function in these games.
Importantly, these guidelines also touch upon the way these games must be
unambiguously described to the player - especially in the presence of “skill” features
that in actuality do not influence the outcome. In cases where EGMs involve objective
skill, such games are further regulated by the following standards:
20
“a) The physical ability component shall only affect the amount of the feature
award and shall not affect the amount of the base game payouts; b) If a patron is
awarded the feature, the player must receive some bonus payout; c) It must be
disclosed on the exterior of the gaming equipment (i.e. either on the exterior of a
physical cabinet, or on the video screen any time wagering is possible) that a
player's physical ability will affect the amount of the bonus awarded; d) The
gaming equipment must be able to maintain and display information that can be
used to determine the contribution of the physical ability component to the overall
payback of the game. e) Games that utilize peripherals, or other equipment to
interact with the gaming equipment for the purposes of physical ability based
gaming must employ a mechanism to detect any failure of that
peripheral/equipment, and prevent gaming activity if a failure is detected.”
(Chapter 14, Section 8, points a-e) (AGCO, 2014)
These standards alone seem to suggest that a skill element involving physical ability
can be included in some EGM games, under the condition that it is limited to a “bonus
feature award” only. Because these guidelines specifically make reference to “bonus
awards”, we interpret that this would allow for games that have elements of physical skill
within the bonus rounds (e.g., the “space invaders” bonus round game alluded to in the
Executive Summary).
The technical standards also reflect on the impact on the payback percentage or
any factors that impact the outcome of the game. These are well articulated for games
of mixed skill and chance, such as poker, but become more complex when calculated
within games of “physical ability” or other legalized skill-based games beyond table
games. For example:
“The theoretical payout percentage for games with physical ability features will be
calculated using a minimum ability level. The minimum theoretical payout
percentage must be eighty-five (85.000) percent for all such games.” (Chapter
20, section 1, point 9) (AGCO, 2014)
Regulations also describe the calculation of the payback percentage for games of skill
that are “non-card” format. These regulations include:
“The theoretical payout percentage of skill and/or strategy non-card games that
provide information to the patron that is sufficient to derive the optimal strategy
will be calculated using blind strategy (random choice). The minimum theoretical
payout percentage must be eighty-five (85.000) percent for all such games. The
theoretical payout percentage of skill and/or strategy non-card games that do not
21
provide strategy or selection advice to the patron, and do not provide other
information to the patron that is sufficient to derive the optimal strategy will be
calculated using blind strategy (random choice). The minimum theoretical payout
percentage must be eighty-eight (88.000) percent for all such games.” (Chapter
20, section 1, points 6-8) (AGCO, 2014)
And finally:
“Notwithstanding the payout requirements of 20.1.4 and 20.1.5, such skill and/or
strategy games are permitted if the gameʼs theoretical payout percentage
calculated using blind strategy is eighty-five percent (85.000) or greater.”
(Chapter 20, section 1, point 8) (AGCO, 2014)
In general, Ontario does seem to allow for skill-based or hybrid games involving both
physical ability and choice/strategy. Our interpretation that this is the case is made
cautiously as we are unaware of any slot machine game in Ontario that has bonus
rounds based on physical skill as part of their play.
Discussion
Between the examined jurisdictions (Nevada, New Jersey, Massachusetts and
Ontario), slot machines have already been legally defined. Interestingly, in the American
jurisdictions only, definitions had already contained “skill”, potentially due to regulators
foreseeing the skill-oriented modifications of slot machines in the near future. Definitions
of games of chance, skill and hybrid games (involving both chance and skill) were very
similar across the North American jurisdictionsʼ regulatory changes. For instance, the
concept of skill required to operate these new games is generally defined as knowledge,
dexterity, and expertise that a player possesses. With regards to the functioning of the
actual games, skill-based games were similarly defined as those that allow the skill of
the player to be the dominant factor in affecting the outcome of the game, as opposed to
chance. Hybrid games were also mentioned within the legislative changes for Nevada,
and in turn the regulations for all three jurisdictions. Hybrid games are essentially games
where a combination of skill and chance both contribute to a gameʼs outcome. The
respective contributions of skill and chance determining the outcome within these
games is unspecified. The overarching implication of the changes for skill-based slot
machines are that a given gameʼs outcomes will be influenced by a playerʼs level of skill.
As such, payback percentage within these games will no longer be constant: the
22
maximum payback percentage will vary based on an individualʼs level of skill. To protect
players, a minimum payback percentage is specified, regardless of skill level.
Another common technical standard adopted by the three North American
jurisdictions within their legislative and regulatory changes is the inclusion of an
“identifier” feature for player participation in games of skill. Identifiers are similarly
defined as player information that can be utilized to affect the gaming experience of the
player. The definition given for these features are extremely broad, as the way player
information is gathered and used can vary to include whether or not players use certain
services, or even the level of skill a player may have. Although all three jurisdictions that
included definitions of identifiers used similar, broad descriptions of the characteristics
from which to derive adaptable features within the game, Massachusetts has provided
specific examples of what information will be used to generate these features. For
example, all identifier definitions included some variation of a playerʼs predetermined
commercial activity, which is expanded upon in the Massachusetts regulatory changes
to include “the patronʼs frequency of visitation or wagering activity at a gaming
establishment(s)/casino(s); activity on social media; or accumulation of rank, points, or
standing in either gaming or non-gaming activity” (pp. 3, 205 CMR 143.01). It is unclear
what the exact limits will be for the use of this information. Another example is the
identifier that is based on a playerʼs enrollment or subscription to specific services. This
is expanded upon in the Massachusetts regulations to include “membership in a gaming
licenseeʼs customer loyalty program” (pp. 3, 205 CMR 143.01). Of major concern for this
review is the way in which information is collected and utilized to determine the degree
of a playerʼs skill in a game. For example, indices of a playerʼs skill can include their
own individual skill, as well as their skill in comparison to another player who is
engaging with the same game. As with the other identifiers, Massachusetts further
defines this as skill “identified or maintained by the gaming system or self-identified by
the patron” (pp. 3, 205 CMR 143.01). Finally, each of the jurisdictions defined an
identifier that encompassed the use of a certain technology, presumably a smartphone
or other mobile device. Perhaps added game features will be available to players who
wish to use them in tandem with their regular slot machine counterparts. Overall,
identifiers seem to be designed in a way that allow for more adaptive, dynamic games
that are tailored to the skill and preference of an individual player.
According to Nevada and New Jersey documentation, new skill-based slot
machine games can be developed to encompass a social-interactive or competitive
aspect. The way players of the same game compete varies by jurisdiction. For instance,
Nevada aims to develop games that mirror the concept of “social networking” through
the use of inter-casino linked systems. Inter-casino linked systems were previously
23
established in 1995, and are defined by electronically interfaced similar games that are
linked to conduct tournament style gaming activities. These games can be located in
two different venues. Inter-casino linked games allow for players to compete for the
same prize, as indicated by a progressive payout schedule that increases with the
number of players participating. Additionally, the regulations alluded to the fact that the
current inter-casino linked system will need to be upgraded to accommodate the formats
of the new skill-based games. Any explicit acknowledgement of competitive play is
restricted to the legislative changes (see the SB-9), and is not deliberately outlined
within Regulation 14. Conversely, in New Jersey, regulatory changes specify that
players may gain an advantage over other players, presumably other players who are
engaging in the same game. Specifically, players may purchase enhancements or be
randomly awarded them throughout the game. The regulations also specify that the
competing players must be informed that they are playing against a player who
possesses one of these enhancements. Further, the regulations stipulate situations in
which players may compete against a house-sponsored or computerized opponent. The
presence of a house-sponsored or computerized opponent must be clearly disclosed to
all players, and these opponents must not have any additional information about the
game than a regular player possesses (i.e. there is no unfair advantage).
Finally, a common technical standard outlined by all three North American
jurisdictions was the clear labelling of games of skill and hybrid games as containing
skill-elements, specifically this information must be displayed prominently to the player.
Although this was not framed as an RG strategy in the regulations explicitly, the fact that
players are being informed of the presence of skill helps to increase player knowledge
and eliminate unnecessary confusion between game types. In the case of Nevada, a
responsible gambling measure was highlighted explicitly in the regulations. The
regulation outlines how skill-based gambling games must not contain themes derived
from games that are primarily intended for individuals under 21 years of age. This
specification is presumably included by means of discouraging the attraction of
underage players to these skill-based games.
In terms of Ontario, it is clear that the way in which games are discussed and
regulated differ from other North American jurisdictions due to the limitations outlined by
the Criminal Code. Specifically, the language of the Criminal Code defines legal
gambling games by their chance elements. This language even extends to card games
with a clear element of skill. Games that do contain skill elements are nonetheless
defined by their aspects of chance (e.g. “dealing of cards”, which is a chance-based
event). Despite this, games with the skill elements are not completely omitted from the
regulatory standards outlined by the AGCO. Indeed, separate payback percentage
24
calculation standards are allocated to skill table games as well as non-card games that
involve skill or strategy. Conversely, slot machine regulations outlined by the Criminal
Code do not currently permit skill to be included as a factor to determine an outcome.
However, in Ontario EGM features that give players “physical ability” or selection are
permitted under the condition that they are restricted to bonus games. Yet, the games to
which these specific standards apply are unspecified, and therefore we cannot make
any further assumption as to how the payback percentage functions in games with such
features. Importantly, the fact that the legal definition of slot machines outlined by the
Criminal Code gives precedence to chance-generated outcomes may be a limiting factor
to the introduction of skill-based slot machines in Ontario that allow skill in the base
game, unless a new term is created to clearly distinguish skill-based slot machines from
chance-based slot machines.
In general, the legal frameworks that have characterized slot machine gambling
have been transformed immensely to modernize the gambling landscape for skill-based
or hybrid games. There were similarities among the major changes made to American
jurisdictions, as well as key differences. The standards that dictate the structural
makeup of potential games were relatively uniform, such as the calculation of payback
percentages or the definition of skill or hybrid games. However, there were nuanced
differences between some game features, such as the role of competition within these
games (New Jersey and Nevada) and the inclusion of advantageous features (New
Jersey). A central contrast between the regulatory changes concerns the inclusion of
responsible gambling oriented guidelines. Specifically, Nevada was the only jurisdiction
thus far to outline a method of discouraging underage players from their venues by
omitting themes. However, all jurisdictions mention that that machines including skill
elements must be prominently labelled for the player. Overall, care must be taken when
designing legislative and/or regulatory changes to ensure that the potential risk of harm
associated with these games is minimized.
25
References
The 189th General Court of The Commonwealth of Massachusetts. (2016). Definitions.
General Laws, Part I, Title II, Chapter 23K, Section 2. Retrieved from
https://malegislature.gov/Laws/GeneralLaws/PartI/TitleII/Chapter23K/Section2.
Alcohol and Gaming Commission of Ontario (2014). Electronic Gaming Equipment
Minimum Technical Standards. Retrieved from
http://www.agco.on.ca/pdfs/en/EGM_standards_march2014.pdf
Alcohol and Gaming Commission of Ontario (2015). Registrarʼs Standards for Gaming.
Retrieved from: http://www.agco.on.ca/pdfs/en/guides/4345_g.pdf
Alcohol and Gaming Commission of Ontario (2016). Chapter 3: General Lottery
Licensing Policies. Lottery Licensing Policy Manual. Retrieved from
http://www.agco.on.ca/llpm/en/chap3.pdf
Criminal Code of Canada, R.S.C. 1976, c. 93, s. 10.
Lapetina, A. (2016). Skill-based gaming in the U.S. Gambling Compliance. Retrieved
from, https://gamblingcompliance.com/hot-topics/skill-based-slots.
Massachusetts Gaming Commission. (2016). 205 CMR 102.00: Construction and
Application Draft Amendments. Retrieved from http://massgaming.com/wp-
content/uploads/205CMR102.02-DRAFT-AMENDMENTS-2-19-16.pdf.
Massachusetts Gaming Commission. (2016). 205 CMR 143.00: Gaming Devices and
Electronic Gaming Equipment Draft Amendments. Retrieved from
http://massgaming.com/wp-content/uploads/205CMR143.01-and-143.09-DRAFT-
AMENDMENTS-2-19-16.pdf.
Nevada Revised Statutes (2016). Chapter 463: Licensing and Control of Gaming.
Retrieved from https://www.leg.state.nv.us/nrs/NRS-463.html
Nevada Gaming Control Board (2016). Regulation 14 of the of the Nevada Gaming
Commission and Nevada Gaming Control Board Gaming Statutes and
Regulations. Retrieved from
http://gaming.nv.gov/modules/showdocument.aspx?documentid=2921
New Jersey Statutes Annotated (N.J.S.A). (2016). Article 1: Introduction and General
Provisions. Retrieved from http://www.njccc.gov/casinos/actreg/act/docs/cca-
article01.pdf.
26
Ontario Lottery & Gaming (2013). Annual Report 2011/2012. Retrieved from
http://www.olg.ca/assets/documents/annual_report/annual_report_11-12.pdf.
Ontario Lottery & Gaming (2016). Annual Report 2014/2015. Retrieved from
http://www.olg.ca/assets/documents/annual_report/annual_report_14-15.pdf.
R. v. Ross, Banks & Dyson (1968) , [1968] , S.C.R. 786.
The State of Nevada, Committee on Judiciary (2015). Senate Bill No. 9. Retrieved from,
https://www.leg.state.nv.us/Session/78th2015/Bills/SB/SB9_EN.pdf
The State of New Jersey, Department of Law and Public Safety, Office of the Attorney
General, Division of Gaming Enforcement. (2016). Regulations, Chapter 69E:
Gaming Equipment. Subchapter 13:69E-1.28A Standards for the approval of a
slot machine game. Retrieved from
http://www.nj.gov/oag/ge/docs/Regulations/CHAPTER69E.pdf.
The State of New Jersey, Department of Law and Public Safety, Office of the Attorney
General, Division of Gaming Enforcement. (2016). Temporary Regulations,
13:69E-1.28Y Skill-based gaming. Retrieved from
http://www.nj.gov/oag/ge/docs/TempRegs/skilledbasedgaming.pdf.
27
Part II: Scoping Review
Introduction
Recently, the state of Nevada adjusted their legislation to include elements of
skill in chance-based slot machine games (Stutz, 2015). These changes were issued as
a solution to the general decline in casino profits and patron participation in traditional
chance-based slot machines. This decline was supposedly attributable to a decrease in
young adults who play slots (Feldberg, 2016). This decline prompted game developers
and casino management to seek a new form of slot machine that appeals to young
adults. The design of these new skill-based slots has been greatly influenced by the
design of video games and casual games, which are popular with young adults.
Although some pre-existing bonus features in slot machines have interaction features
that mimic video game play, with these changes, players will now have the ability to
develop skill and actually influence game outcomes: with more skill or expertise in the
game, players can maximize their wins and increase overall success. This decision has
profound implications for gamblers as well as researchers who examine gambling
behaviour. Responsible Gambling (RG) strategies designed to address the potential
harms associated with specific gambling forms are also impacted by these changes.
One prominent concern surrounds the common misperception of skill in purely
chance-based games that already exist in casinos. For example, we know that slot
machine players often exhibit forms of illusory control over their outcomes in a game
(Toneatto, Blitz-Miller, Calderwood, Dragonetti & Tsanos, 1997). This is propagated by
the way players interact with certain structural features present in slot machines,
ranging from the ability to stop the reels (e.g. using a stop button), or modifying oneʼs
betting strategies during gameplay (Ladouceur & Sevigny, 2005; Dixon, 2000). These
beliefs are not a reflection of actual skill; instead, these features influence a playerʼs
perception of their control over the game as a whole. Because of these established
effects on players, the notion of games that contain objective skill elements fuels
concern over the potential for abuse of these games.
Given the growing concern surrounding the development of these games by the
public, researchers, and game regulators (see Berzon, 2016), we set out to review the
extant literature surrounding skill-based gambling. Specifically, we are interested in
investigating the effects of skill-based games that currently exist, and to evaluate the
amount of skill that is actually involved in such games, be this illusory skill (as in slot
28
machine games) or actual, objective skill (as in poker). We also aimed to examine
research that addresses the consequences of these games, with respect to erroneous
cognitions, and the emergence and maintenance of problem gambling behaviour.
Additionally, we aimed to provide a comprehensive overview of the available RG
strategies that have been examined in the literature, that have been specifically
designed to address the harms of skill-based gambling. To this end, we employed a
scoping review methodology to answer the following research questions:
1. What do we know about existing skill-based gambling games (and to what
extent is skill present in such games)?
2. What are the consequences and harms (if any) associated with these
gambling forms?
3. What RG initiatives exist to address the consequences of skill-based
gambling forms?
By targeting these areas of interest in our review, we hope to elucidate the impact that
these games may have on existing or future gamblers. Additionally, by identifying these
impacts, we hope to extend the reviewed evidence, and speculate as to how these
games may be safely integrated into the existing gambling landscape.
Methods
Search Strategy
To undertake our scoping review, we searched a total of four online databases
(PubMed, PsychInfo, Scopus, and ProQuest). These databases were selected based on
their relevance to psychology, public health, sociology, and mental health. These
disciplines encompass the majority of academic research involved in the study of
gambling behaviour and its associated impacts. The search terms consisted of various
combinations of the following: skill, gambling, blackjack, poker, skill slot machine, slot
machine, pokies, fruit machine, electronic gambling machine, lottery, casino, arousal,
harm, consequence, erroneous cognition, distorted cognition, cognitive bias, illusion of
control, illusory control, gamblerʼs fallacy, hot hand bias, health, addiction, problem
gambling, pathological gambling, disordered gambling, pathology, responsible
gambling, intervention, initiative, education, and improvement. General terms (such as
gambling and skill) were searched with truncation where applicable. These terms were
selected in order to capture the wide range of subjects relevant to our research
questions. These search terms yielded 957 results and 306 duplicates were identified
and removed (see Figure 1).
29
Grey literature searches were also conducted on two databases (Gambling
Research Exchange Ontario [GREO] Knowledge Repository Grey Literature and Google
Scholar). Such Grey Literature databases were selected based on field relevance.
Additionally, grey literature sources allow access to resources and information that is
created by and intended for broader audiences and stakeholders (e.g. government, non-
profit, research reports, etc.). The same search terms used for our database search
were applied for the Google Scholar search. Search results were restricted to the first
100 pages, as this was deemed an appropriate cut-off for source relevancy (see
Mackay, Petermann, Hurrell, & Hodgins, 2015). The only search term used for the
GREO Knowledge Repository Grey Literature search was skill, as all publications and
resources available in the database are gambling-specific. Combined, these grey
literature searches returned a total of 143 sources, from which 32 duplicates were
identified and removed (see Figure 1).
Study Selection and Data Extraction
Once we finalized our search results, we then defined a set of exclusion and
inclusion criteria. Initial screening of each sourceʼs title and abstract was undertaken to
ensure that each met the inclusion criteria specified, and was relevant to our research
questions. Upon screening the sources, 646 were removed as they did not meet
inclusion criteria. This left 116 sources to enter the second screening procedure, in
which the full-text of each source was examined. Following this screening, 23 sources
were removed leaving us with a finalized pool of 93 sources.
We reviewed each source for the purpose of identifying key themes. Key themes
were derived from the motivation, design, main findings, and implications of each
source. We took note of the study origin, design and author of each source. A summary
of the characteristics of each source is displayed in the Appendix.
30
Figure 1. PRISMA diagram outlining the scoping review process.
Records identified through
database searching
(n = 957)
Additional records identified
through other sources
(n = 143)
Records after duplicates removed
(n = 762)
Records screened
(n = 762) Records excluded
(n = 646)
Full-text articles assessed for
eligibility
(n = 116)
Full-text articles excluded, with
reasons
(n = 23)
Studies included in synthesis
(n = 93)
Identification
Screening
Eligibility
Included
31
Results
Description of Included Studies
A majority of the studies were conducted in origin, between the years of 1975-
2016. Studies varied in methodology, and ranged from qualitative interviews to case
studies. A complete overview of the source characteristics can be found in the
Appendix.
The pool of publications mainly took the form of quantitative research studies
(78.49%), qualitative (17.20%), and the remaining studies consisted of legal analyses,
statistical modelling, neural network modelling or evaluation of skills training (4.31%).
Discussion of Identified Themes
We established four themes from the final pool of sources: structural
characteristics, groups and demographics of skill-based game players, harms and
consequences associated with skill-based gambling, and RG initiatives or strategies
targeting the harms tied to skill-based gambling forms. The first theme concerns the
structural characteristics associated with a variety of gambling forms that contain (e.g.
poker, blackjack) or are thought to contain elements of skill (e.g. sports betting, slots).
The second theme identified a wide span of groups that participate in the
aforementioned forms of skill-based gambling. These groups were defined based on
demographic variables (e.g. age, gender) or other common group-level characteristics
(e.g. gambling online or offline, playing professionally). The third theme pertained to a
broad array of harms or consequences that have been identified as being associated
with skill-based gambling. The majority of these consequences were cognitive in nature
(e.g. the illusion of control, perception surrounding personal skill and risk) but also
included behavioural and other external ramifications for the player. The fourth and final
theme concerned various RG strategies that were pertinent to the harms associated
with skill-based gambling (e.g. messaging, representations in media, education). It is
important to note that findings within themes may also be relevant to other themes
identified. However, we have categorized findings in this way to highlight the most
dominant theme expressed in each source. Each of these themes are then discussed in
more detail below.
32
Theme 1: Structural Characteristics (n = 16/93)
Structural characteristics are the defining features of gambling activities that
influence how players interact with a game or gambling form. For instance, in games
with a skill element (e.g. poker, blackjack), the playersʼ performance will influence the
potential outcomes of the game. By contrast, in games of pure chance (e.g. traditional
slot machines, roulette), the playersʼ performance will not have any affect on the
outcome of the game, as outcomes are determined randomly and players cannot exert
any influence on the outcome. However, there are various features present in games of
pure chance that foster the illusion that players can build skill and improve their chances
of success in such games. Thus, it is imperative to understand how elements of pseudo-
skill permeate such features and influence the player.
In the literature, poker is generally thought of as objectively containing skill
(Javarone, 2015; Siler, 2010) in that some players can adopt specific strategies to have
a positive expected return in the long-term. However, one study showed that the format
of poker dictates the amount of skill one can apply. Specifically, tournament style poker
games (i.e. where players bet chips in each game, pay an entry fee to play, and are
competing for an overall “pot” of winnings) were found to rely more on rational play and
skill of the player, while cash-based poker games (i.e. where players bet real money in
each game, pay no entry fee to play, and there are no “pot” winnings) were found to be
more akin to regular chance-based gambling (Javarone, 2015). In terms of legal
classifications of the degree of skill present in poker, one study deduced that the
dominant factor in poker is in fact skill (Levitt, Miles, & Rosenfield, 2012). In a similar
vein Siler and colleagues (2010) were able to identify the skills necessary for successful
play in poker: cognitive skills (e.g. risk assessment based on the performance of other
players), accuracy of skill-assessment (e.g. playing in specific stake size games that
match their skill), ability to suppress or control oneʼs own emotions (e.g. avoiding “tilt”,
negative emotions that lead to rash decision-making in play). Similarly, blackjack,
another popular card game played in casinos, combines elements of chance and skill.
One study found that specific skills required to succeed in blackjack (e.g. card-counting)
can be enhanced through targeted training strategies (Speelman, Whiting & Dixon,
2015). Conversely, skill in poker was found to only be influential in the first few games
played (over a long series of sequential games), leading the authors to conclude that
skill is less involved in poker than originally thought (Chan, 2010).
In contrast to games that do involve elements of skill to play, structural
characteristics of other gambling formats have the propensity to induce the illusion that
players can acquire skills to increase their personal success. In gambling forms that
involve placing bets on specific teams or competitors, the expertise of the bettor
33
(domain-specific knowledge in a particular sport) is generally thought to have a robust
influence on the outcome of said bet. However, in actuality, many authors have
concluded that the amount of skill involved in these games is negligible such as in horse
racing (Dickerson, 1979; Browne, Rockloff, Blaszcynski, Allcock, & Windross, 2015) and
in sports betting (Towfigh & Glöckner, 2011; Gainsbury & Russell, 2015; Khazaal, Y.,
Chatton, A., Billieux, J., Bizzini, L., Monney, G., Fresard, E., ... & Khan, R. 2012; Kwak,
2016). It has also been shown that inflated control beliefs strengthen win expectations,
which consequently may lead players to place higher bets (Kwak, 2016). Similarly, in
games of pure chance (e.g. slot machines), players interact directly with structural
features that bring forth the illusion of skill during play. In particular, players feel more
skillful while playing multiline slot machines (i.e. when betting on multiple lines
simultaneously) as opposed to single line slot machines (Dixon, Graydon, Harrigan,
Wojtowicz, Siu, & Fugelsang, 2014). When reel-stopping devices are present on slot
machines, players often misattribute its use to involving skilled action (Ladouceur &
Sévigny, 2005). Some slot machines also feature buttons that allow the players to either
“hold” one of the reels from spinning, or “nudge” a reel to move up or down to the next
desired symbol - although this is an illusory skill (Griffiths, 1990a). These also contribute
to the exaggeration of perceived skill during slot machine play.
Looking to the legal classifications that separate skill-based games (e.g. prize
machines, such as the classic “Claw” arcade games that players pay to play) from
chance-based gambling games, the Gambling Commission (UK) has developed a
systematic model that determines whether or not a prize machine should be considered
a gambling game (see Figure 2; Gambling Commission, 2010). As depicted in the
classification model, the amount of skill and chance involved in a prize machine game is
considered, as well as the way in which the game is presented to the player (e.g.
whether or not it contains predominant gambling themes or actions required to play). If a
game contains both chance and skill, but the element of chance is large enough to
influence the outcome, the game is still considered a gambling game. Additionally, if the
amount of chance involved is negligible (but still present), yet the game still contains
gambling themes and actions on behalf of the player (e.g. spinning a wheel, flipping a
coin), then the prize machine is classified as a gambling game. It is clear that
determining the respective contributions of skill and chance in gambling is at times
rather ambiguous or highly dependent on legislative or contextual parameters that
distinguish gambling from non-gambling activities. It is important for regulators to take
care in drawing a dividing line when separating gambling and skill-based gaming, as it
has broad implications for its accessibility and uptake by the public.
34
Figure 2. Determining whether a game is considered gambling or gaming. Reproduced
from “Is a prize machine a gaming machine?” (Gambling Commission UK, 2010).
Theme 2: Groups/Demographics (n = 37/93)
Our search allowed us to identify particular groups that commonly participate in
skill-based gambling over other forms. Overall, many research studies have examined
age-related differences in gambling involvement. Of particular concern is that children
commonly report gambling on games of skill, although other forms of gambling are
engaged in more heavily, such as lottery games (Ladouceur, Dubé, & Bujold, 1994).
Interestingly, children in grade school report being able to differentiate the role of skill
and luck between game types (Derevensky, Gupta & Baboushkin, 2007). Despite this
35
ability, wagering amounts and risk taking behaviour appears to increase with age in
blackjack play (Derevensky, Gupta, Della-Cioppa, 1996). Many sources reported that
adolescents also frequently bet on games of skill (e.g. betting on games of personal skill
such as pool; Welte, Barnes, Tidwell, & Hoffman, 2009; Adebayo, 1998; Turner,
Macdonald, Bartoshuk, & Zangeneh, 2008; Winters, Stinchfield, & Kim, 1995; Arizona
Criminal Justice Commission, 2006). Additionally, like the aforementioned grade-school
children, adolescents appear to understand the differences between skill and luck
gambling games (Kristiansen, Jensen & Trabjerg, 2014), yet still believe that skill is
involved in gambling as a whole (Gupta & Derevensky, 1996). Adolescents who report
problematic levels of gambling believe that there is more skill involved in all gambling
games compared to their non-problematic gambling counterparts (Delfabbro, Lahn, &
Grabosky, 2006). One study found that skill-based gambling engagement was
associated with more reports of gambling problems among adolescents. Additionally,
participating in gambling activities that involve selecting a winner (e.g. sports betting)
was found to be a significant predictor of gambling problems (Bell & Boldero, 2011).
These findings lead the authors to conclude that skill-based gambling may be
particularly problematic for adolescents (Bell & Boldero, 2011). Among adolescent fruit
machine PGs, “skill” is often thought to be deployed by using specific structural features
that can extend playing time, such that players can stretch their bankrolls through the
use of feature-based strategies (Griffiths, 1993a). Additionally, adolescent fruit machine
gamblers also believe that both luck and skill are involved in gameplay. Specifically,
misidentified skillsets included knowledge of the reels (symbols) and other special
machine features, such as buttons (Griffiths, 1993a). In fact, another study showed that
adolescent slot machine PGs (and higher frequency players) often attributed outcomes
to their own skill rather than luck (Carroll & Huxley, 1994). Other meaningful differences
emerged surrounding gender in this group: specifically, adolescent males tended to
emphasize the importance of skill involved in gambling compared to adolescent females
(Kristiansen, Jensen & Trabjerg, 2014), and adolescent males (moreso than females)
are socialized by their fathers to participate in skill-based forms of gambling (Shead,
Derevensky & Meerkamper, 2011).
Young adults and college students also commonly report playing skill-based
games (Biddix & Hardy, 2008; Gausset & Jansbøl, 2009). Specifically, among college
students, involvement in skill-based gambling tends to vary with major of study, in that it
is a more common preference for business and math students (Williams, Connolly,
Wood, & Nowatzski, 2006; Gausset & Jansbøl, 2009). Additionally, while college
students who engage in skill-based games report spending less time and money on
gambling in general (Williams et al., 2006), engagement with skill-based gambling forms
in this population is nonetheless associated with heightened Problem Gambling Severity
36
Index (PGSI) scores compared to chance-based gambling forms (Boldero & Bell, 2012).
A specific subset of the college student population that has been studied in relation to
skill-based gambling participation is college athletes. College athletes tend to
experience more gambling problems than their non-athlete counterparts, and also
commonly report betting on games of personal skill (Kerber, 2005; Huang, Jacobs,
Derevensky, Gupta, & Paskus, 2007). More generally, athletes not necessarily affiliated
with an academic institution are similarly inclined to play skill-based gambling games
compared to non-athletes (Weiss & Loubier, 2010). This study also indicated that
familiarity and expertise (e.g. increased knowledge) surrounding specific sports may be
a risk factor for PG in this group (Weiss & Loubier, 2010). Of particular interest, as
identified in one study, is the notion that preference for skill or chance-based games
shifts with age (Stevens & Young, 2010; Fang & Mowen, 2009). Specifically, older
adults have been shown to prefer chance-based games as opposed to skill-based
games (Stevens & Young, 2010).
Considering other factors beyond age, gender differences also emerged from our
search results. A common finding concerns how males generally prefer playing skill-
based games more than females (Boldero & Bell, 2012; Gausset & Jansbøl, 2009;
Stevens & Young, 2010; Fang & Mowen, 2009). This is found to be the case with
student athletes (Huang, Jacobs, Derevensky, Gupta, & Paskus, 2007), older adults
(Wiebe, Single, Falkowski-Ham, & Mun, 2004), and individuals who play skill-based
online games (Woods & Williams, 2008). In terms of playing motivations, gamblers who
prefer skill card games play for reasons related to money, excitement, social contact,
and self-esteem (Fang & Mowen, 2009). Significant characteristics in people involved in
skill-based card gambling included competitiveness, interest in numerical information,
and introversion (Fang & Mowen, 2009). Additionally, one study found that gamblers
who prefer skill-based games are typically high in positive emotionality, high in
aggression, and tend to possess low behavioural constraint and levels of magical
ideation (Savage, Slutske, & Martin, 2014). Further distinctions emerge when
considering the mode of skill-based gambling, specifically whether play is occurring
online (e.g. on a gambling website) or offline (e.g. in a brick-and-mortar venue). One
specific finding concerned how the success of online poker players was related to
perceiving oneself to be skillful at the game, yet crucially not overestimating oneʼs skill
level (Griffiths, Parke, Wood, & Rigbye, 2010). External ramifications of online skill-
based gamblers were also observed within our search results, particularly in terms of
more reports of criminal theft and fraud within this group (Woods & Williams, 2008). In
line with online gambling-related harms, increased problem gambling risk was observed
in fraternity members who participated in skill-based gambling online (Biddix & Hardy,
2008). Additionally, online gambling is often undertaken to demonstrate skills, and
37
players who report this motive have been found to be more likely to experience
gambling-related problems (Goldstein, Vilhena-Churchill, Stewart, Hoaken, & Flett,
2016).
There are unique characteristics associated with problem gamblers who prefer
skill-based games, regardless of mode (e.g. offline or online). In particular, these
individuals have been shown to be higher in sensation seeking than other types of
gamblers (Bonnaire, Bungener, & Varescon, 2009). Other characteristics associated
with this population includes the presence of more illegal acts and an increasing
propensity to be male (Challét-Bouju, Hardouin, Lagadec, Burlacu, Valleur, Magalon, ...
& Grall-Bronnec, 2016). Stress and time spent have been found to be significant
predictors of PG in poker players specifically (Hopley, Wagner, & Nicki, 2014). In line
with these findings, research has identified characteristics that dissociate expert and
professional-level poker players from novices and amateurs. Specifically, expert poker
players have been found to be more efficient at processing poker-related information
(St. Germain & Tenenbaum, 2011), and specific poker skills are related to increased
financial success (Leonard & Williams, 2015). Interestingly, professional poker players
do not tend to see poker as a form of gambling, and instead associate gambling with
games that are completely chance-based (Radburn & Horsley, 2011). Compatible with
these results is the finding that semi-professional and professional gamblers are less
likely to engage in chance-based games (Hing, Russell, Blaszczynski, & Gainsbury,
2015). Additionally, semi-professional and professional PGs experience more gambling-
related harm than amateur PGs (Hing, Russell, Gainsbury, & Blaszczynski, 2016).
Theme 3: Harms and Consequences (n = 33/93)
The largest theme that surfaced from our search is the harms and consequences
associated with skill-based gambling. A major facet of these harms include general
erroneous cognitions that players of skill-based games may exhibit. For example, the
illusion of control is a prominent phenomenon that is characterized by an inflated sense
of agency over the outcomes of the game. Langer (1975) formally defines the illusion of
control as “an expectancy of a personal success probability inappropriately higher than
the objective probability would warrant” (pp. 313). These types of cognitions are
problematic in instances where the game is predominantly chance-based. Additionally,
players may overestimate the amount of skill that they possess during play, or in turn,
believe that there is skill involved in a game that is purely chance-based. Conversely,
players may also overestimate the amount of luck present in a game, or may perceive
themselves to be “lucky” (e.g. perceiving symbols or signs as indices of impending
38
fortune). Other consequences associated with these games include impacts on and the
development of problem gambling behaviour.
According to our search results, general erroneous cognitions can range from
perceiving a “skill orientation” during play, to special techniques that players adopt as a
way to increase success. Males have been found to develop an erroneous skill
orientation in chance-based games, and this is also more likely to be found among PGs
(Toneatto et al., 1997). Players who exhibit higher perceived controllability over game
outcomes show a preference for skill-based games (Christie, Wohl, Matheson &
Anisman, 2005). Moreover, in a study of payback percentages and player slot machine
selection, it was found that players were able to differentiate between “tight” (i.e. lower
payback percentage) and “loose” (i.e. higher payback percentage) machines; the
authors noted that this true ability may run the risk of becoming overgeneralized by
players leading them to erroneously believe they can pick machines on which they can
consistently win (Dixon, Fugelsang, MacLaren, & Harrigan, 2013). Additionally, another
study highlighted how higher frequency slots players played machines longer than non-
gamblers, and made more irrational verbalizations and cognitions during play (Griffiths,
1994). These players were also found to play the slot machine faster, potentially
believing that they can accrue more winnings (Griffiths, 1994).
A specific erroneous cognition that is strongly implicated in games that involve
skill (or a combination of skill and chance) is the aforementioned illusion of control, a
belief that one has more control over the outcomes of a game than they do in actuality.
This cognition is particularly pertinent to games that involve skill, as the presence of
some skill elements in a game can promote the overestimation of the amount of control
that the player has over the game. Active illusory control was found to be the most
common erroneous cognition in one sample of gamblers (Toneatto et al., 1997). Illusion
of control is also significantly correlated with problem gambling severity (Teed, Finlay,
Marmurek, Colwell, & Newby-Clark, 2012). Moreover, gamblers who prefer both skill-
based games and skill-and-chance games were found to score higher on illusion of
control measures (Myrseth, Brunborg, & Eidem, 2010). Looking at near-miss outcomes
(e.g. outcomes that fall short of a win in slots), the degree of illusion of control was
found to interact with the motivating effects of near-misses (Billieux, Van der Linden,
Khazaal, Zullino, & Clark, 2012). In a similar vein, near-miss effects are thought to be
partially dependent on skill learning mechanisms in humans (Clark, Liu, McKavanagh,
Garrett, Dunn, & Aitken, 2013). Additionally, gamblers with a higher degree of illusion of
control in games were found to be more likely to reference peak performance (e.g.,
when they were “up”) when experiencing losing outcomes in order to maintain the belief
that they actually have skill (Cowley, Briley, & Farrell, 2015). In a study investigating the
39
impact of videogame play on gambling behaviour, videogame players were more likely
to attribute their gambling wins to having direct control over the outcomes of a chance-
based gambling task (King, Ejova, & Delfabbro, 2012). A related finding posited that
familiarity of gambling-related stimuli influences playerʼs perceptions of control in a
game (Bouts & Van Avermaet, 1992).
Another brand of erroneous cognition includes oneʼs belief or perception of skill in
a given gambling situation. Skill (in any context) was found to be a dominant factor in
the phenomenology of problem gambling, as indexed by the number of instances of the
word “skill” in an online problem gambling forum (Rantala & Sulkunen, 2012).
Additionally, perceptions of streaks and sequences has been found to be dependent on
the context in which they are encountered potentially impacting a playerʼs judgment of
personal skill within a playing session (i.e. with regards to the gamblerʼs fallacy;
Matthews, 2013). Considering the influence of skill-assessment on risk in blackjack, it
was found that if a player perceives themselves to be skillful in a game, in addition to
having a greater amount of expected enjoyment, it also leads them to underestimate the
amount of risk involved in playing (Dean, 2011). For sports betting, seemingly another
skill-based game, bettors have been shown to overestimate their ability to predict an
outcome based on their knowledge and expertise of the sport in question (Cantinotti,
Ladouceur, & Jacques, 2004). Moreover, in the context of slot machines, a case study
of an adolescent fruit machine addict revealed that his initial motivation for play
stemmed from his desire to demonstrate his “skills” to his peers, despite the fact that he
was engaging in a purely chance-based gambling form (Griffiths, 1993b). In both slot
machines and poker, belief in oneʼs own skill was found to be related to gambling
frequency (Zhou et al., 2012). Additionally, in comparison to offline poker players, online
poker players were found to be more vulnerable to a greater perception of skill, among
other cognitive distortions (Cantinotti, Ladouceur & Jacques, 2004). Consistent with the
notion of skill overestimation in the illusion of control, the perceived skill of the player
does not translate into more successful play (Cantinotti, Ladouceur & Jacques, 2004). In
contrast to online poker players, offline poker players have reported that skill is heavily
relevant to play, specifically technical, psychological and financial skills (Bouju, Grall-
Bronnec, Quistrebert-Davanne, Hardouin, & Vénisse, 2013). Additionally, pathological
gamblers reported having greater skill orientation during slot machine play (Källmén,
Andersson,& Andren, 2008), and give more biased evaluations of their performance and
reasons for their suboptimal play (Griffiths, 1990b). Compared to satiated controls,
gamblers with an unresolved need state (e.g. a heightened state of hunger) reported
more skill orientations (e.g. increased wagers) in gameplay, thereby leading to
overconfidence in obtaining wins (Biner, Angle, Park, Mellinger & Barber, 1995).
Similarly, perception of skill (as a consequence of having an illusion of control), tied to
40
positive appraisal during gambling, was found to predict craving to gamble. Perception
of luck was also found to have an influence on craving, and did not vary by game type
(Christie et al., 2010).
Turning to the concept of perceived luck in gambling, a few studies identified the
impact of these beliefs on gambling behaviour as a cognitive distortion. In pure chance-
based gambling activities, beliefs about personal luck leads gamblers to erroneously
conclude that they have influence over their outcome, consequently leading to an
illusion of control (Wohl & Enzle, 2002). Clearly, belief in luck is intimately related to the
illusion of control in gambling, as evidenced by illogical thinking about oneʼs probabilities
of obtaining a specific outcome. This justifies its inclusion as a harm and consequence
of gambling in this review. Perceiving the presence of personal luck in skill-chance
games was found to be more robust than in games of pure chance (Wohl, Young, &
Hart, 2005). Additionally, people who play skill-based games have been shown to hold
superstitious beliefs, which may further contribute to developing an illusion of control
(D'Agati, 2014). That said, beliefs in personal luck were found to be uncorrelated with
gambling severity in one study (Teed et al., 2012).
Skill-based gambling has implications in the development of problem gambling,
and symptoms related to problem gambling. Specifically, it was found that stress
uniquely predicts problem gambling in online poker players, as does having an internal
locus of control (Hopley, Dempsey & Nicki, 2012). Of notable importance is the repeated
finding that harms associated with poker do not resemble those traditionally associated
with problem gambling (Bjerg, 2010). Prominent harms of poker play identified by Bouju
et al. (2013) included emotional harm and time spent gambling, rather than financial
consequences. When controlling for gambling involvement, betting on games of skill,
horse racing and sports lotteries in particular all retained significant relationships with
problem gambling (Afifi, LaPlante, Taillieu, Dowd, & Shaffer, 2014). Overall, negative
consequences associated with skill-based games (e.g., poker, blackjack) are varied,
and are different from those associated with chance-based gambling forms
(Cunningham, Callaghan, Toneatto, & Cordingley, 2005).
Theme 4: Responsible Gambling (n = 7/93)
Currently, there are many strategies available to counteract the harms and
consequences of skill-based gambling. One preventative form commonly endorsed is
education; either to promote increased knowledge surrounding game play or to spread
awareness of the harms associated with skill-based gambling. Although it is a
41
commonly held notion that increased knowledge will lead to more informed decisions
when approaching gambling situations, Lambos and Delfabbro (2007) found that such
knowledge of gambling odds or skills in numeracy are unlikely to decrease risk of
problem gambling. In fact, problem gamblers generally have the same understanding of
gambling odds as NPGs (non-problem gamblers; Lambos & Delfabbro, 2007).
Additionally, some authors have also theorized that online communities may be useful in
combatting the development of PG through increased awareness of symptomatology.
Specifically, virtual online communities of poker players may offer a supportive space to
communicate information amongst players. This information may be related to skill-
development (to aid novice players; Parke & Griffiths, 2011). Among different risk-
groups, NPGs, low-risk (LR) and moderate-risk (MR) gamblers are more supportive of
the term “Responsible Gambling” in general, with NPGs and LRs being more certain of
what RG means (Hing, Sproston, Tran, & Russell, 2016). In terms of RG strategy
adoptions, PGs are less likely to report using control strategies (e.g. using time and/or
money limits) and are more likely to gamble as a way to challenge their skills and to
beat the odds (Hing Sproston, Tran, & Russell, 2016).
Analyses of representations of gambling in the media allows insight into how
attitudes toward skill-based gambling can be adopted. In Western gambling
advertisements (as they aired in Nova Scotia), the majority promote skill-based
gambling forms (e.g. poker and blackjack) over other casino game forms.
Advertisements of skill-based games tended to over-represent the amount of skill
involved to play, in addition to other positive portrayals of such games (McMullan &
Miller, 2008). The presence of RG messaging in these advertisements was negligible,
such that it was limited to age restrictions and presented in a non-salient formats (e.g.
located at the bottom of the screen in small fonts; McMullan & Miller, 2008). Similarly,
the depiction of gambling in Chinese gambling-themed movies was found to be
overwhelmingly positive or neutral, in that negative depictions of the consequences of
gambling behaviour were rarely explored in the films. The most common type of
cognitive distortions portrayed in these films was the illusion of control in chance-based
games. Specifically, skill-efficacy was the most common type of illusory control depicted
in the sample (Un & Lam, 2016).
42
Discussion
Summary of Findings
Overall, the results of our scoping review distilled the relevant literature into four
main themes. First, we were able to infer the impact of the structural features of a game
with respect to the degree of skill and chance involved, and how they are classified
within a legal framework. Our second theme touched on the types of people who play
skill-based games and those who may be most at risk to the negative impacts of these
games. Third, we summarized a broad range of cognitive distortions, harms, and other
consequences that may result from engaging in skill-based gambling forms. This was by
far the most comprehensive and robust of all of the themes identified. This highlights the
importance of considering erroneous cognitions and the wide range of variation in
problem gambling symptomology, attitudes and beliefs that these games may facilitate
in a player. Lastly, we identified a theme concerning RG initiatives. Overall, the paucity
of initiatives available in the literature that are specially designed for skill-based games
highlight the need for the development of new tools and strategies.
Implications for Gambling Behaviour
Although we failed to find any specific studies on the new types of skill-based slot
machines that will be introduced onto casino floors, this review is pertinent to these
hybrid games for two reasons. For one, it allows us to succinctly summarize what we
know about existing games that involve skill or pseudo-skill elements as well as the
harms and risks with which they are associated. Secondly, our findings allow us to
anticipate the types of harms that may potentially be associated with these new,
modified slot machine games. Many studies addressed the illusion of control for purely
chance-based gambling forms. With the introduction of skilled elements into games that
are universally recognized as being exclusively chance based, these cognitive
distortions have the potential to be much more complex and more difficult to address
with the same tactics that are used currently to dispel these distortions in slot machine
players. One distinct possibility is that players may overgeneralize the extent of their
skill when a game involves both skill and chance-based elements. For example, the
study by King and colleagues (2012) demonstrated that video game players had a
greater propensity to attribute their chance-based outcomes to their skill. As video
games traditionally involve the development of specific skills to improve performance
over time (as will the newly introduced skill-based gambling forms), we can speculate
from this finding that an overgeneralization of skill beliefs may manifest with the
43
introduction of skill elements into chance-based games. An additional complication is
the fact that gamblers commonly play multiple slot machines within a gambling session;
as such, it is possible that players may “jump” from one machine that does have a skill
element to another machine that does not, providing further opportunity for skill-related
beliefs to be applied to an inappropriate setting.
The obtained results also highlighted specific groups that may be attracted to
skill-based slot machine games. Most concerning is the recurring finding that underage
adolescents and young adults commonly report betting on games of skill, indicating a
possible preference for these types of gambling activities. Such findings, coupled with
the known link between early exposure to gambling and increased risk of problem
gambling (Wood, Griffiths, & Parke, 2007) make the inclusion of skill elements in slot
machine games particularly worrisome. Males also seemed to gravitate toward skill-
based gambling forms, such as poker, blackjack, sports betting, horse racing, and
betting on games of personal skill such as darts or pool. Although not of immediate
concern (it currently remains unknown whether online versions of the anticipated skill-
based slot machines will be available), in the future, it may be worthwhile to consider
that online gambling seems to facilitate a unique set of problematic conditions for some
gamblers. This is evidenced by the greater number reports of gambling-related
problems amongst individuals who initiated online gambling for the purposes of
demonstrating their own skills to other players (Goldstein, Vilhena-Churchill, Stewart,
Hoaken, & Flett, 2016), and by results showing that frat members who engaged in skill-
based gambling online were at a greater risk for gambling problems (Biddix & Hardy,
2008).
Implications for Responsible Gambling
Findings that addressed the effectiveness of RG strategies specific to skill-based
casino games were generally absent, as most addressed gambling harms more
generally. Pertinent literature has mainly addressed the use of education-centered
interventions as preventative measures from gambling harms. Although education may
intuitively appear as an effective form of prevention, recent research has cast doubt on
the utility of such measures for dispelling the erroneous cognitions or functional
understanding of casino games (Monaghan & Blaszczynski, 2009). In particular,
knowledge of the odds or probability associated with specific gambling games may not
be truly protective against the rise of cognitive distortions in gamblers. Authors have
speculated that the timing of the delivery of information that clearly explains how odds
and probability function in gambling specific situations may act as one way to improve
44
the efficacy or practical use of such knowledge (Lambos & Delfabbro, 2007). That is, if
such information is presented through school curriculum or community programs prior to
any emotional and financial investment in gambling activities, then there is a greater
opportunity of uptake and appropriate use of this information by gamblers.
As we expected, there were no investigations of RG strategies for skill-based slot
machines. One RG strategy that can be used for skill-based gambling is the use of
messaging within games (e.g. through the use of labels to identify the skill-based versus
purely random slot machines), as it avoids the overgeneralization of skill that players
might inappropriately apply to games that use only chance. Additionally, as playersʼ
decisions to play these games are strongly influenced by the appeal of game features,
and the overall expected return determined by skill and chance characteristics, it is
important to ensure that they are represented accurately. Clearly labelling the degree of
skill involved in the particular games, highlighting the amount of efficacy that the player
does have in the game (e.g. how much the payback percentage can be affected), and
the fact that chance is still a dominant component of slot machine games could be
effective strategies in combating any misperceptions that may arise with respect to
these games.
The impact of representations of gambling were also assessed (e.g.
advertisements, movies). We highlight that care must be taken when portraying such
activities to the public. The need for direct communication of RG messaging was also
emphasized through this research. To this end, an optimal RG strategy that may reduce
the level of harm tied to skill-based casino gaming should include public messaging that
expands beyond adherence to age restrictions (as in McMullan & Miller, 2008).
Expanding upon the aforementioned issue of chance-skill classification for games,
public messaging should also incorporate deliberate information about the degree of
skill and chance actually present in skill-based slot machines. Such interventions may
be beneficial in terms of ensuring that players make informed decisions concerning their
gambling activities. Although suggestions can be made for the application and use of
RG strategies to prevent the onset of problem gambling behaviours, these suggestions
must be appropriately developed and thoroughly evaluated to ensure that they are
effective. Moreover, as there was a lack of research pertaining to intervention-based
tools in the source of gameplay within our search that are already in use within venues
(e.g. self-imposed monetary and time limits, self-exclusion), we advocate for the
development of in-game interventions that target the problematic behaviours that
surface in skill-based games.
45
Conclusion
There are some key aspects of the skill-based gambling experience that remain
elusive in the gambling literature. As previously mentioned, future research should aim
to qualify the amount of objective skill involved in currently existing games and games
that will be developed and adopted in the near future. Additionally, there is much work to
be done in developing, evaluating, and implementing RG strategies that are specific to
skill-based gambling forms. As skill-based slot machines are still not yet available on the
casino floor, we can prepare for future research studies that should examine their
structural characteristics, how they influence erroneous cognitions (if at all), and which
groups engage with them. Regulators and operators should be aware of skill-based slot
machine games and how these games may impact the player (in terms of harms and
consequences), and RG strategies that accompany their arrival, maximizing responsible
enjoyment for all patrons.
46
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56
Appendix. Characteristics of documents included in scoping review.
Author/year
Country
Type of Literature
Theme 1: Structural Characteristics
Gainsbury & Russell (2015)
Australia
Quantitative Research
Ladouceur & Sévigny (2005)
Canada
Quantitative Research
(Study 1 and Study 2)
Chan (2010)
China
Neural Network Modelling
Siler (2010)
United States
Quantitative Research
Speelman, Whiting & Dixon (2015)
United States
Evaluation of Skills Training
Javarone (2015)
Italy
Statistical physics/modelling
Barrault, Untas, & Varescon (2014)
France
Interviews with Quantitative
Analysis
Levitt, Miles, & Rosenfield (2012)
United States
Qualitative (Legal Analysis)
Dickerson (1979)
UK
Quantitative Research
(Observational)
Towfigh, & Glöckner (2011)
Germany
Quantitative Research
Dixon, Graydon, Harrigan,
Wojtowicz, Siu, & Fugelsang
(2014)
Canada
Quantitative Research
Khazaal, Chatton, Billieux, Bizzini,
Monney, Fresard, . . . Khan (2012)
Switzerland/
Belgium/
Canada
Quantitative Research
Kwak (2016)
United States
Quantitative Research
(Study 1 and Study 2)
Browne, Rockloff, Blaszcynski,
Allcock & Windross (2015)
Australia
Quantitative Research
(Modelling)
Gambling Commission (2010)
UK
Policy/Legal
Griffiths (1990)
UK
Qualitative
Theme 2: Groups and Demographics
Biddix & Hardy (2008)
United States
Quantitative Research
Boldero & Bell (2012)
Australia
Qualitative Research
Carroll & Huxley (1994)
UK
Qualitative Research
57
Derenvensky, Gupta & Della
Cioppa (1996)
Canada
Quantitative Research
Derevensky, Gupta & Baboushkin
(2007)
Canada
Quantitative Research
Dreber, Rand, Wernerfelt, Garcia,
Vilar, Lum & Zeckhauser (2011)
Sweden/
United States
Quantitative Research
Gausset & Jansbøl (2009)
Denmark
Quantitative Research
Hopley, Wagner & Nicki (2014)
Canada
Quantitative Research
Kristiansen, Jensen, & Trabjerg
(2014)
Denmark
Quantitative Research
Leonard & Williams (2015)
Canada
Quantitative Research
Radburn & Horsley (2011)
UK
Qualitative Research
Shead, Derevensky & Meerkamper
(2011)
Canada
Quantitative Research
St. Germain, Tenenbaum (2011)
United States
Quantitative Research
Weiss & Loubier (2010)
United States
Quantitative (Survey)
Williams, Connolly, Wood &
Nowatski (2006)
Canada
Quantitative Research
Goldstein, Vilhena-Churchill,
Stewart, Hoaken & Flett (2016)
Canada
Quantitative Research
Griffiths, Parke, Wood & Rigbye
(2010)
UK/Canada
Quantitative Research
(Survey)
Welte, Barnes, Tidwell, & Hoffman
(2009)
United States
Quantitative Research
(Survey)
Adebayo, B. (1998)
Canada
Quantitative Research
(Survey)
Turner, MacDonald, Bartoshuk, &
Zangeneh (2008)
Canada
Quantitative Research
(Survey)
Gupta & Derevensky (1996)
Canada
Quantitative Research
(Survey)
Winters, Stinchfield & Kim (1995)
United States
Quantitative Research
(Survey)
Ladouceur, Dubé & Bujold (1994)
Canada
Quantitative Research
(Survey)
Kerber (2005)
United States
Quantitative Research
(Survey)
58
Huang, Jacobs, Derevensky,
Gupta & Paskus (2007)
Canada/
United States
Quantitative Research
(Survey)
Bonnaire, Bungener & Varescon
(2009)
France
Quantitative Research
Fang & Mowen (2009)
United States
Quantitative Research
(Survey)
Savage, Slutske & Martin (2014)
United States/
Australia
Quantitative Research
(Structured Interviews)
Hing, Russell, Blaszczynski &
Gainsbury (2014)
Australia
Quantitative Research
(Survey)
Hing, Russell, Gainsbury &
Blaszczynski (2016)
Australia
Quantitative Research
(Survey)
Delfabbro, Lahn & Grabosky
(2006)
Australia
Quantitative Research
(Survey)
Challét-Bouju, Hardouin, Lagadec,
Burlacu, Valleur, Magalon. . .
Reynaud (2016)
France
Quantitative Research
(Structured Interview)
Arizona Criminal Justice
Commission (2006)
United States
Quantitative Research
(Survey)
Bell & Boldero (2011)
Australia
Quantitative Research
(Survey)
Griffiths (1993a)
UK
Qualitative Research
Weibe, Single, Falkowski-Ham &
Mun (2004)
Canada
Quantitative Research
(Survey)
Stevens & Young (2010)
Australia
Quantitative Research
(Survey)
Theme 3: Harms and Consequences
Biner, Angle, Park, Mellinger &
Barber (1995)
United States
Quantitative Research
Bouju, Grall-Bronnec, Quistrebert-
Davanne, Hardouin, & Vénisse
(2013).
France
Qualitative Research
Bjerg (2010)
Denmark
Qualitative
Bouts & Van Avermaet (1992)
Belgium
Quantitative Research
Cantinotti, Ladouceur & Jacques
(2004)
Canada
Quantitative Research
59
Christie, Wohl, Matheson &
Anisman (2010)
Canada
Quantitative Research
Cunningham, Callaghan, Toneatto,
& Cordingley (2005)
Canada
Quantitative Research
Dean (2011)
United States
Quantitative Research
Griffiths (1990b)
UK
Qualitative Research
Griffiths (1994)
UK
Quantitative Research
Hopley, Demsley, & Nicki (2012)
Canada
Quantitative Research
Källmén, Andersson & Andren
(2008)
Sweden
Quantitative Research
Ladouceur & Mayrand (1984)
Canada
Quantitative Research
Ladouceur, Mayrand, Dussault,
Letarte, & Tremblay (1984)
Canada
Quantitative Research
Langer (1975)
United States
Quantitative Research
MacKay, Bard, Bowling & Hodgins
(2014)
Canada
Quantitative Research
Myrseth, Brunborg & Eidem (2010)
Norway
Quantitative Research
Rae & Haw (2005)
Australia
Quantitative Research
Teed, Finlay, Marmurek, Colwell &
Newby-Clark (2012)
Canada
Quantitative Research
Wohl & Enzle (2002)
Canada
Quantitative Research
(Study 1 and Study 2)
Wohl, Young & Hart (2005)
Canada
Quantitative Research
Zhou, Tang, Sun, Huang, Rao,
Liang & Li (2012)
China
Quantitative Research
Dixon, Fugelsang, MacLaren &
Harrigan (2013)
Canada
Quantitative Research
Matthews (2013)
UK
Quantitative Research
Toneatto, Blitz-Miller, Calderwood,
Dragonetti & Tsanos (1997)
Canada
Qualitative (Interviews)
Billieux, Van der Linden, Khazaal,
Zullino & Clark (2012)
Switzerland/
Belgium/UK
Quantitative Research
Clark, Liu, Mckavanagh, Garrett,
Dunn & Aitken (2013)
UK
Quantitative Research
60
Cowley, Briley & Farrell (2015)
Australia
Quantitative Research
King, Ejova & Delfabbro (2012)
Australia
Quantitative Research
Griffiths (1993b)
UK
Qualitative Research (Case
Study)
Rantala & Sulkunen (2012)
Finland
Qualitative Research
D'Agati (2014)
Italy
Qualitative Research
Afifi, LaPlante, Taillieu, Dowd &
Shaffer (2014)
Canada/
United States
Quantitative Research
(Survey)
Theme 4: Responsible Gambling (RG) Initiatives
Lambos & Delfabbro (2007)
Australia
Quantitative Research
Hing, Sproston, Tran & Russell
(2016)
Australia
Quantitative Research
(Survey)
McMullan & Miller (2008)
Canada
Qualitative (Content
Analysis)
Parke & Griffiths (2011)
UK
Qualitative (Content
Analysis)
Wood & Williams (2008)
Canada
Quantitative Research
Un & Lam (2016)
China
Qualitative Research
Quilty, Avila Murati & Bagby (2014)
Canada
Quantitative Research
