A game of skill and a game of chance are not that noticeable difference. In many instances, a game will have elements of both chance and skill.
Whether a game is a game of skill or a game of chance will often depend upon which element is the dominant factor in determining the outcome of the game. Skills may include any of the following:
- A learned or developed ability;
- Strategy, or tactic;
- Physical coordination or strength;
- Technical expertise; and
- Knowledge of the means of accomplishing a task.
Does it Matter if a Game is a Game of Skill or Chance?
The legal guidelines and requirements for gambling and casinos are covered by gaming and gambling regulations. Because of the large number of casinos that are operated by Indian tribes today, many concerns related to gaming law fall under Native American and Indian law.
Whether the game is a game of skill or a game of chance may determine whether or not the game is legal in many states. There are many states that allow individuals to participate in games of skill but forbid them from participating or entering in games of chance.
A tribe is only permitted to use the money that is obtained through gambling for certain purposes, including:
- Supporting tribal government initiatives or operations;
- Ensuring the welfare of the tribe’s people in general;
- Encouraging the growth of tribal economies;
- Providing financial support to nonprofits; or
- Assisting with funding local government agencies’ operations.
In the majority of states, gambling is regulated by both federal and state laws. Although the laws in each state may vary, the federal laws will apply in every state.
Federal laws apply to nearly every type of gambling. These laws also influence nearly every aspect of gambling.
Federal laws attempt to cover the gaps in gabling laws that are not covered by state laws. Some of the common areas that are regulated by federal law include:
- The transportation and possession of gambling devices and paraphernalia across state lines;
- Sports betting in states different than the state in which the game is held;
- How and where bets can be made; and
- Internet gambling, to some degree.
The laws that govern gambling have been shaped by acts that have been passed by Congress over the years which regulate different aspects of gambling. Some more the most important federal acts that govern gambling include:
- Wire Act of 1961: This Act deals with individuals using wire communications, such as phones, faxes, etc., to place bets in interstate or foreign commerce;
- Travel Act of 1961: This Act deals with individuals who are involved in interstate travel for the purpose of committing illegal activities, including illegal gambling;
- Interstate Transportation of Gambling Paraphernalia Act of 1961: This Act makes it illegal to transport various items used for illegal gambling such as betting tickets or sports books;
- Illegal Gambling Business Act of 1970: This Act imposes severe penalties for large scale illegal gambling organizations;
- Racketeer Influenced and Corrupt Organizations Act of 1970: This Act imposes heavy fines and jail sentences for individuals who participate in racketeering;
- Professional and Amateur Sports Protection Act of 1992: This Act makes it illegal to place certain kinds of sports bets; and
- Interstate Wagering Amendment of 1994: This Act regulates the state laws on lotteries and prevents out of state individuals from participating in state run lotteries.
Depending on an individual’s activities, the penalties for violating a federal gambling law may be severe. If an individual violates federal gambling laws, they may face:
- Heavy fines;
- Forfeiture of winnings;
- Jail time; or
- Conviction of a felony.
What are Some Common Games of Skill?
There are several games of skill that are legal to bet on. Some of the more common categories of games include:
- Certain card games, such as gin rummy or mahjong;
Fantasy sports leagues.
Does Every State Allow People to Gamble on Games of Skill?
No, every state does not allow individuals to gamble on games of skill. Whether or not this is permitted varies by state.
In addition, the importance of the element of skill in determining the legality of the game may vary by state. There are some states that require skill to be the deciding factor in the outcome of the game.
There are other states that only require that a small amount of skill be involved in the game. Other states do not take chance or skill into consideration.
As previously noted, the federal government and the individual state governments control gambling in the United States. Federal laws forbid specific forms of gambling in every state even though the state gambling laws vary.
It is important to note that if the federal government bans a certain form of gambling, state laws are superseded, or overruled, by the federal laws, and all states are required to follow them. There are, however, legal gambling options in many states.
The legal definition of what is considered gambling may vary by state. Generally speaking, however, whenever an individual bets money or other valuables on the result of a game of chance or has the expectation that they would win money or other valuables if a certain outcome occurs, the individual is considered to be gambling.
Gambling does not include a business transaction that is governed by contract law, including purchasing:
- Life insurance;
- Health insurance; or
- Accident or health insurance.
The statutes in each state will specify what actions constitute legal gambling. These statutes typically include specific examples.
For example, there are numerous forms of gambling that are explicitly mentioned as being lawful under Nevada statutes, although the same activities may be prohibited in other jurisdictions.
State lottery programs are among the most popular types of legal gambling in the United States. Many states will impose an age limit on individuals who are permitted to engage in gambling, in addition to providing a specific definition of what is considered legal gambling.
The majority of states prohibit minors from gambling or engaging in games of chance, which includes:
- Wagering on professional collegiate sports;
- Playing poker; or
- Placing bets on school sports.
The majority of states stipulate that, in order to gamble, an individual must be at least of legal age. There are some states that merely require the individual to be over the age of 18.
Other states require that individuals are over the age of 21 to gamble. There are also laws that apply to internet gaming, or gambling online.
Online gambling includes a variety of games, typically games of chance, where the user makes bets with the hopes of a higher payout than they put in. Common forms of online gambling include:
- Online lotteries;
- Online casinos;
- Online sports betting; and
- Fantasy sports.
Should I Consult a Lawyer?
If you have any issues, questions, or concerns regarding the legality of a game of skill or a game of chance, it may be helpful to consult with an entertainment lawyer.
Your lawyer can answer any of your questions as well as offer advice regarding a game you are considering participating in before you engage in conduct that may be illegal in your state.
If you have been charged with gambling illegally in your state, it is important to consult with an attorney who can represent you in court. Your attorney can advise you if any defenses are available and attempt to negotiate with the prosecution for a more favorable outcome.