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Should Games of Skill That Offer Cash Rewards Be Regulated as Gambling?

Should Games of Skill That Offer Cash Rewards Be Regulated as Gamblin?
By Richard Dahl on January 31, 2020 11:26 AM

Do you have what it takes to be a Dragon Master?

That's the challenge, or the come-on, posed by Dragon's Ascent, one of the new electronic "games of skill" that are popping up in convenience stores and bars around the country.

If you come upon this game and wonder whether you have the right stuff to master dragons, you might ponder popping in some money to find out. Maybe, when you then further read the instructions, you will be won over by the news that if you are really good at mastering dragons, you can win actual money.

But isn't that gambling? And if it is, you might ask yourself as you're trying to manhandle dragons, why am I doing it in this convenience store?

Virginia, D.C., Pennsylvania Mulling the Question

It's a good question, and it's one that gaming regulators are asking in at least a few locales.

One of them is Virginia, a state that prohibits most forms of gambling, but it's where an estimated 10,000 games of skill have sprouted up over the last three years or so. Why? Because these are games that reward skill, as opposed to luck. And Virginia, like most states, says that games of chance are illegal when money is involved, but games of skill are not.

If that sounds like a hair's breadth distinction to you, then you're in company with a good many lawmakers. In Virginia, legislators see these games (many of which resemble slot machines) as a drain on state-run lotteries and are considering bills to either outlaw games of skill or regulate them.

At the end of January, it was anybody's guess what will shake out in Virginia. But just across the Potomac River in the District of Columbia, policymakers don't want to wait. After the D.C. Attorney General's office concluded that games of skill didn't qualify as gambling, the D.C. Council is seeking the regulation route. A bill under consideration sets restrictions, such as limiting them to players 18 and older and capping them at three per establishment.

In Pennsylvania, a similar battle has been raging recently after Gov. Tom Wolf's administration blamed the machines for siphoning off more than $200 million in state lottery revenue last year. State Police confiscated "suspected illegal gambling" devices in two counties, and a Commonwealth Court judge recently turned aside a challenge and said the seizures may continue while the courts decide whether the machines are legal. Meanwhile, as in Virginia, lawmakers are considering bills that would either ban or regulate the machines.

So, You'd Like to Test Your Skill?

Other than the sticky question of legality, you might be asking yourself: How, exactly, do these machines work?

Essentially, players are rewarded for their skills at downing oncoming threats (like dragons) or adeptly lining up symbols in a slot-machine fashion. Players feed cash into the machines and have the option of pressing buttons that present greater challenges — requiring more money but larger payouts if they are successful. If they come out ahead at the end, they push a button and get a ticket to take to the bar or counter and cash out.

The dollar amounts required by these games are not large. In one reported instance, a Virginia man playing a game called "Pirates" invested $45 and placed bets ranging from 40 cents to $4, ultimately winning $136, for a profit of $91.

Not bad. But as the DC Attorney's office found, the games return between 60% and 95% of the money to players, so maybe the Pirates player was particularly skillful. The Washington Post reported that Dragon's Ascent players "can put as much as $100 into the machine and, with a lot of patience and a keen eye, turn a profit depending on how many winged beasts they snag."

So, the question remains: Is this gambling?

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