Skill, Chance, and the Unlawful Internet Gambling Enforcement Act

Prior posts on this site about Tournament.com and Kwari have both raised some eyebrows about my particular interpretation of the UIGEA as it relates to games of skill and games of chance. As such, I thought this would be an appropriate time to discuss both types of games, and the reasoning behind my conservative approach to the UIGEA.

Put simply, there are three types of games in the world: games of pure chance, games of pure skill, and games somewhere in between that employ both elements of chance and skill. There are readily available examples of all of them. Lotteries, roulette, and bingo are games of pure chance. All in all, no matter what system you think you're using to select your winning numbers, it's pure luck. You cannot affect the odds of which number will be picked. To be a true "pure" skill game, there must be no chance involved whatsoever, and to that end there are very few, prime examples being chess, checkers, and othello. In any of these games there is no chance element as every move and rule is pre-defined and determined by the rules. After all, rolling a dice, drawing a card, or spinning a spinner are all "chance" elements, even if they are not always treated that way under the law. Between the two extremes lay a spectrum of other games with varying degrees of chance and skill weighing upon the outcome, be they board games or casino games or video games. As such, some games which can be played in either way to be classified as one or the other. Blackjack is typically lumped into the games of chance, even though a card counter would argue otherwise. Poker has been classified both ways. Competitive board gaming, such as Scrabble or Monopoly, would likely be classified as skill since the chance element is so minimal. Of course, these interpretations also vary by county, and the major difficulty with the internet is addressing these games on a multi-national level.

This brings us to the difficult proposition of classifying video games, the vast majority of which I believe fall into the "in between" category. Granted, arcade games are likely games of pure skill, Galaga or Donkey Kong or House of the Dead for example. However most anything else has some chance element to it in a multiplayer context, even if it is minor. The most relevant example would be spawning. In a FPS that has respawning, spawns are the luck of the draw. While many people claim FPS games to be pure skill, there is no amount of skill that can alter the result of spawning in someone's crosshairs. Similarly, in any RTS map, say Starcraft, that has unequal resources at the starting point, there is an element of chance. In a similar fashion, the terrain from a given spawn point may give some players an advantage. The most often cited counter argument is Counter-Strike, where there is no real "spawning." However, even Counter-Strike can have a random element to it if either team is filled out with random players. Even the most skilled players will be severely disadvantaged round after round if their team is arbitrarily filled up with an inept hodgepodge of other gamers. It would be the equivalent of filling out an NFL team with random fans who happen to be in attendance at the game and making them play. Thus, only in the event where both teams are controlled can Counter-Strike be a true "skill" game.

Skill games are not defacto illegal under the UIGEA. In fact, it's rather ambiguous on that matter. When laws are ambiguous, the courts are free to look at elements like legislative history, and one of the key issues the UIGEA hoped to address was online poker. As such, I have been erring on the side of caution in my analysis. Why? Poker has fairly equal elements of chance and skill (skill which includes reading your opponents, an element absent from Blackjack). If poker is covered, then arguably, anything short of a pure skill game could be lumped into the UIGEA if the courts so decide (absent the Skill Games Protection Act). Moreover, the overwhelming sentiment in the US congress seems to be anti-gambling, and thus I would be inclined to surmise that future legislation or interpretation would follow this same thought process. Accordingly, most of my articles have erred on the side of caution in pointing out chance elements that could push certain games into the UIGEA domain. As such, the articles reflect the direction I think the law can go rather than how I would personally interpret it or how I hope it would go. I hope that serves to clarify the two above referenced analyses.