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Skill vs. Chance: What You Should Know About the Different Types of Gambling

If you’ve ever visited a casino or seen a poker tournament on TV, you’ve probably heard the phrases “game of chance” and “game of skill” thrown around. Most people would agree that a “game of chance” is a gambling situation that involves total randomness, while a “game of skill” is a gambling situation that tests the skill level of the gambler. That seems simple enough… right?

In reality, the truth is not as obvious as you might assume. Even though these two concepts sound straightforward enough, they’re actually far from well-defined. Here’s what you should know about games of skill versus games of chance and how these types of gambling affect problem gamblers.

“Chance-Based” Gambling

Purchasing a lottery ticket, spinning a roulette wheel, playing dice games, pulling the lever at a slot machine, and participating in bingo are all events that have completely random outcomes. Therefore, these examples all fall under the category of “games of chance.”

Another feature of games of chance is that they are played against the house. In other words, the casino (or lottery game creator, etc.) is your opponent rather than another player or a computer.

To draw in potential gamblers, chance-based casino games often advertise huge payouts and flashy prizes. Many online casinos offer a “first spin free” or shower you with game credits to encourage you to keep going. But no matter what you do, your actual chances of winning a game of chance range from very low to almost entirely negligible (for instance, you’re more likely to be struck by lightning than you are to win the Powerball drawing). 

Games of chance are strictly regulated in most states, and as far as the law is concerned, any game of chance that involves money is considered gambling. 

“Skill-Based” Gambling

A game is often considered skill-based when a person’s abilities can impact the outcome of said game. The game is also usually played against other opponents (or a computer). Some examples include poker, Texas Hold ’Em, rummy, and other card games. Dominoes, backgammon, and chess are also examples of skill-based games.

The rewards for these games are often significantly smaller, and many people believe that their chances to win are higher the more they practice, learn, and study. You no longer have to walk into a brick-and-mortar casino to play against opponents, either. There are many online games that are advertised as skill games yet draw in audiences with the promise of big cash rewards.

The Gray Area

The rise of online gaming has made legislating games of chance and games of skill much more difficult. This is made even more complex because differentiating between chance and skill-based games does not always create neat categories. For instance, consider real-life sports betting, which has historically (but not always) been deemed “chance-based.” In many states, it is illegal to wager money on the outcome of sports events. On the other hand, fantasy sports leagues are often considered “skill-based,” and only one state (Montana) has passed legislation that prohibits fantasy gaming.

Betting on horse races is another example of a gray area. Betting on horse racing is prohibited completely in Nevada (a state where casino gambling is extremely common) as well as Texas (a state with only two casinos). Arizona only allows in-person wagers, while Tennessee (a state that harshly fines any and all land-based casinos) still allows online bets on horse racing. As you can see, the logic used to determine these judgments can vary, and verdicts often come down to…

The Test

So how do states (or countries) decide how to classify gambling games? Depending on the type of game being tested, some states use what’s called a predominance test or a dominant factor test. On a scale from “pure chance” to “pure skill,” a game must pass certain thresholds in certain states to qualify as a “game of skill.”

Other states use the material element test. This test evaluates the specific role of chance in a game. If chance plays a role that is “material,” meaningful, or significant, the game is deemed gambling rather than a game of skill.

A few states that don’t use material element or predominance testing rely on the any-chance test. This is an even simpler but much more stringent test: if chance has any type of effect on the outcome of the game, the game is considered illegal gambling.

Skill, Chance, & Problem Gambling

Games of chance are often the first “draw” for people who develop gambling problems because of their low prices and attractive, eye-catching features. However, this isn’t always the case. Sometimes, people struggling with problem gambling attempt to replace one type of gambling with another. For instance, some gamblers give up slot machines in favor of playing poker. Their mental justification often works like this: random winnings aren’t something they can control, but money won by playing card games or other skill-based games is “earned.”

This justification may convince someone with a gambling problem that their behavior is more rational, but many gamblers in recovery have just as much trouble abstaining from games of skill as they do games of chance. At the end of the day, any form of gambling can trigger a gambling problem, and problem gambling can still occur even if you believe you’re making money.

Get Help Now

If you have a gambling problem, the solution isn’t to find a new game to play. Instead, focus on changing your behavior using resources such as Gamblers Anonymous meetings or 800-GAMBLER, our toll-free, 24/7 confidential hotline. We’re here to provide a listening ear, connect you with resources, and help you take back your life once and for all. Call today — we’ll be waiting for you.

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