Events
IAGA SUMMIT New York 2017
Lynne Levin Kaufman, Partner Casino & iGaming Law practice group, Cooper Levenson
Lloyd D. Levenson is an accomplished trial attorney and recognized expert in complex casino regulatory matters, Levenson is also a well-published author and frequent speaker on a broad range of industry legal issues. He has served as President of IAGA and is now a Counselor to that group. He has twice served as chairman of the Casino Law Section of the New Jersey State Bar Association and also has served as chairman of the Gaming Law Committee of the American Bar Association. In 2010, Stockton University established the Lloyd D. Levenson Institute for Gaming, Hospitality and Tourism (LIGHT) in its School of Business. The Institute combines research, training and management components to fill the need for a comprehensive institute to serve a critical aspect of New Jersey’s economy.
In most jurisdictions slot machines (and table games) must be based on chance. Thus, the popular and lucrative world of skill-based games and related tournaments operated outside the “casino” regulatory framework. By legalising skilled-based gaming, casinos can tap into this market and transform millennials from pure ‘gamers’ to casino ‘gamblers.’
supported the efforts of start-up skilled gaming companies Gamblit Gaming and Gameco, Inc., as well as those of traditional slot machine companies, all who were developing skilled gaming product for the casino floor. Tese skilled game manufacturers began meeting with regulators in New Jersey and Nevada who had been acutely aware that the skilled game market could be at least become a partial solution to diminishing slot play. Te parties worked cooperatively to resolve regulatory concerns, and regulators then: (i) proposed statutory revisions (where needed); (ii) drafted and revised regulations; (iii) developed standards for testing and certification; and (iv) tested and approved games.
What exactly is skilled-based casino gaming? Skilled-based contests are permitted in almost all jurisdictions worldwide, and are not considered ‘gambling’ – so why do casinos need skilled gaming laws and regulations?
As we noted, in most jurisdictions slot machines (and table games) must be based on chance. Tus, the popular and lucrative world of skill-based games and related tournaments operated outside the “casino” regulatory framework. By legalising skilled-based gaming, casinos can tap into this market and transform millennials from pure ‘gamers’ to casino ‘gamblers.’
Although definitions vary, a skilled-based casino game (called a hybrid in certain jurisdictions if chance is involved) is an approved game where game outcome is dependent in whole or in part upon the player’s physical dexterity and/or mental ability. Unlike traditional games, skilled games provide active, social, and competitive experiences. Most significantly, unlike traditional games where each machine must have the same payout odds/rates for
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each player, with skilled games casinos can use objective criteria called identifiers to offer different payout odds/rates to different players.
Identifiers can include a player’s skill, membership in a loyalty program, frequency of play, extent of play, and other factors. Skilled players can be given better odds, and can receive a higher payout. A casino can also reward non-skilled frequent or high volume players with better odds or incentives. And there is more.
In New Jersey for example, skill-based games can include “an adaptive feature” which, when a player is continually losing, offers the player extra chances to win to increase the payout rate. New Jersey and other jurisdictions also permit players to buy or earn “enhancements” to increase the ability to win, as with online video games. Minimum payout percentages are still required if a game has both skill and chance, although in some jurisdictions (New Jersey) a pure game of skill is not required to have any minimum payout.
And here we are. Casino skilled-based games are being introduced worldwide, notably in Great Britain. In the US, casino skilled games have been rolled out in New Jersey, Nevada, and tribal California casinos, with the latter two a short time before this article’s deadline. It is too soon to measure success, but so far so good. As hoped, a younger demographic is participating. Also as hoped, many of these players had never previously gambled in a casino. Per Blaine Graboyes, CEO of Gameco, initial results indicate 60 per cent of the skilled game players are under 40, 50 per cent would not likely have been in the casino if not for the skilled game, and 84 per cent would recommend the games to friends. With social media influencers now a significant driver of commerce, the
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