Skill Based Games

           Recently, I listened to an industry leader talk about some upcoming changes to casino games.  More specifically, he was talking about the proliferation of regulatory changes that were beginning to allow 'skill based' slot machines.  One of the first things he mentioned was that we've had skill based games for many years, namely video poker.  Okay, so I'm not fond of video poker being called a slot machine.  But, to regulatory agencies, this is the category they generally fall under.  The focus for this week is that this speaker so casually described video poker as a skill based game.

            To say the least, I agree 100%.  But, the industry hasn't always.  Anytime I hear this discussion, I think back to a story my father told me.  I looked through my columns and found the last time I discussed this was more than 10 years ago.  The story is about a court case in Pennsylvania that centered around whether or not video poker was a game of luck or a game of skill.   The judge ruled the game was a game of luck.  I wonder if 20+ years later, he's changed his mind or if the regulatory agencies had to do it for him.  In my opinion, this judge either didn't understand gambling or math, or both!

            The speaker this past week used a scenario whereby the Player would simply press Deal and then Draw without making any decision.  He said this would result in a payback of about 30%.  For full pay jacks or better, it would actually be closer to 36%, but you get the idea.  As you all hopefully know by now, Expert Strategy, will net you more like 99.5%.  That's quite a difference.  Using this scenario, I'm guessing even the judge would rule video poker to be a game of skill.

            But, asking anyone to believe that there is anyone even without any real skill who would play video poker and indiscriminately hit the Draw button without holding cards ever, is really stretching it.  For the court case, an expert was brought in who analyze what might be considered to be a common sense version of strategy.  It probably mimicked the type of strategy one would use at a poker game.  You keep all Pairs, Trips, etc...  You probably go for 4-Card Straights and/or Flushes.  Using this 'common sense' strategy, it was determined that the payback for this strategy would be just below 90%.  This means a reduction of payback of about 10%.  Or an increase in the house advantage of roughly 2000%.  You're not winning very often on a machine with a 90% payback!

            This 10% difference was not enough to sway the judge.  I can't disagree more.  No one is saying that video poker is complete skill, but at what point does the game become enough skill that it can be deemed a game of skill for the purposes of the casino.  It is quite interesting that many states are working on this issue right now as the re-work that regulations to allow a whole new type of skill-based games.  (More on that in a moment).

            I can take any two people in the world and sit them down at two slot machines set for identical paybacks and there is absolutely nothing either one can do to change their payback.  But, if I were to take someone who has never stepped foot in a casino, never heard of video poker and only knows the very basics about hand rankings for poker and I put this person on a machine right next to mine - with both machines with identical paytables, the likelihood that this person can achieve a higher payback than me over time is near ZERO.  For a judge to rule that I have no known skill over this novice is, well, insulting. 

            I'm very happy to hear that as a result of these new other skill based slot machines that the regulatory boards are clearly defining video poker a game of skill.  Maybe someday, they'll even stop classifying them as slot machines (I'm dreaming!)

            So, what is the big deal about these new skill-based games if we have already had video poker for a couple of decades?  Some of these skill-based games are not brain skill.  They are a type of physical skill.  Or at least they create a virtual reality of physical skill.  Imagine if a bonus round in a slot machine involved playing a video game that was not pure luck.  Envision that you have to play around of Space Invaders or PacMan in order to earn your bonus.  How does one go about determining the payback of such a game?

            Now, I assume that even if they use these 'old-style' arcade games, they will be modernized a bit.  Anyone who played these games 20-40 years ago remembers that many of them had patterns that could be followed to complete rounds.  I knew some guys that could play several rounds of Pacman blindfolded and still complete the rounds.  Even if these games are updated to use more robust random algorithms, how does one measure the highest level of skill that can be achieved.  What if the level that is used is so far beyond 99.9% of human skill that it results in the average human achieving a far lower payback?  What if someone sets the payback to the average human and then finds out there is a 0.1% capable of beating the daylights out of the game due to superior skill.  Rainman could count a blackjack shoe perfectly.  But, he'd have no advantage in video poker over any other expert.  What if there is a Rainman type person who can play some other skill based game so perfectly so as to beat the game regularly.

            These are all questions that the inventors of this new generation of games is going to have to wrangle with.  I don't know if I'll be involved in the math aspect of any of these new games.  Either way, I look forward to learning how these issues are resolved.