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game of chance

Advertising a Game of Chance? Contact a Sweepstakes Lawyer

by David Klein

Businesses often use games of chance to promote products, increase traffic to their websites, and increase revenues. When set up correctly, games of chance can be a boon for business. However, when fashioned incorrectly, the consequences include reputational harm, civil litigation and even criminal liability. Games of skill (as opposed to chance) are regulated at both the state and federal level. Each state evaluates games of skill by using either: 1) the dominant factor test; 2) the material element test; or 3) the any chance test. A sweepstakes lawyer can help analyze the risk associated with promoting games of chance and skill based on the various jurisdictional tests.

How do states evaluate games of skill?

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Games of Skill v. Games of Chance – The Legal Analysis

by David Klein

Illegal gambling is generally defined as an activity where a person provides consideration for the opportunity to win a prize in games of chance. Consideration typically takes the form of currency, but it can be anything of value (hence the idiom, losing your shirt). If there is no consideration, or the game is deemed a game of skill instead of a game of chance, then the game will be legal in most jurisdictions.

Traditional games of chance are lotteries, where you buy a ticket to match randomly drawn numbers to win money, and craps, where the prize is dependent on the roll of the dice. However, the bright line rules of games of chance become blurry when skill is involved. Depending on the state, games of skill fall outside of the scope of state gambling laws (in recent years our firm has written extensively on the issues involved in the fantasy sports games of skill debate). This raises the following question:

How do states determine whether the game is one of skill, one of chance or both?

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