Skills Games Rake in Millions, Along With Controversy

Published on 11/13/2024 07:14:56

Anyone who keeps up to date with the gambling sector will tell you that change is a constant. While some of the games we play have been in existence for centuries, the way that we access them constantly evolves. For example, crypto assets are now being used almost as much as fiat currency. With the many benefits of crypto such as increased profits and faster transactions, many now opt for crypto casinos compared to traditional ones.

Another form of gaming that is making waves and causing some controversy is skills games, which are fast on the rise.

What are Skills Games?

If you’re familiar with casino games then you definitely know about slots. Featured in media for decades and used by millions each year, you put in money, pull and lever, and hope to win something. The core feature of slots is that they are based purely on luck; there isn’t anything you can do to influence the outcome besides hoping for the best.

This is where skills games differ and why they are so controversial. Skills games are slot-like games that players put money in and hope to profit from. But unlike slots (and as the name suggests) they require a certain level of skill. They have, unsurprisingly, become quite popular over the years, with titles like Graveyard Gold, House of Voodoo, Icy Hot, and Kickers reigning supreme. According to data from Forbes, the skills game industry is on track to be worth $85.34 billion by 2030.

And with this success has allegedly come benefits for the businesses that house these games.  According to Rachel Albritton, senior communications director at Pace-O-Matic, a top skills game company, “80 percent of the revenue our games generate flows directly to our small business operators and the small businesses and fraternal clubs/non-profits that host our games.”

The Controversy Around Them

So, skills games make money for players and small businesses. How and why are they controversial? A lot of this boils down to the fact that they are not regulated in the same way casinos are. Slots, for example, are subject to regulations from the government, and the earnings from them are taxed. Because skills games are technically not gambling, they don’t fall under the same regulations.

The way some in the casino space see it, this is unfair. But beyond that, there is the issue of competition. If a player puts money in slots, the chances of winning or losing are just that - chances. If they put their money into a skills game, they can increase their odds with their skills. It comes as no surprise then that some players are leaving casinos for skills games. Take the state of Pennsylvania, which is one of Pace-O-Matic’s biggest markets. From 2018 to now, slot revenue in the state has only grown by 4%. States that don’t have skills games have seen an average growth of 21% in the same period.

These facts have caused some hostility from the gambling sector which sees skills games as eating into their profits. Besides them, there is the angle of public safety. Any gaming machine that people can win money from is bound to attract some level of conflict. And unlike a casino that has paid security, your local business with a skills game machine might not have the resources to protect its patrons.

A study from the American Gaming Association found that many consumers themselves are wary of these games. 64% believed they were too accessible to children and 56% said that they could lead to more crimes. In light of the controversy, Kentucky banned skills games and while Virginia has taken similar action, companies have found a workaround.

The Issue of Regulations

At this point, the skills games industry is still in a standoff with its critics. There were plans to implement a 42% tax on the games in Pennsylvania but this fell through. In response casino owners in the state filed a joint lawsuit with the Supreme Court asking for a 52% tax on skills games- the same rate that they get taxed at.

On its part, the management of Pace-O-Matic has said that it doesn’t oppose regulations in its industry. On the contrary, it has called for regulation over the years with no success. Speaking on the pushback from the casino industry, Albritton said,

“Casinos oppose skill games because they perceive them as competition, even though there is no evidence to support that this is the case. We have no issue with casinos outside of their attempts to impede on the growth of the skill game market and the passage of common-sense skill game legislation.”

Experts, for now, believe that whether or not new regulations come into play, the skills game sector will only continue to grow.

Skill is the keyword in skill games

Skills games are one of the most interesting forms of gaming we’ve seen in a while. They are technically not gambling games and so, have been able to skirt around typical regulations. But this hasn’t stopped them from being the subject of much controversy, mostly stemming from the gambling sector.

But with rising profits and higher visibility, the next few years will be rather interesting for the skills game sector. It might fall under gambling regulation and pay a higher tax rate or might even face more backlash from the gambling industry. But regardless, experts insist it is here to stay.

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