With the explosion of online poker, and online gambling in general, the issue of gambling law has seen new applications and a rising interest. The first task of legislators is to define gambling, which is not uncomplicated. Chance and randomness is a difficult area and it is not easy to grasp the meaning of the central concepts. Consequently, there are a number of common misconceptions regarding chance and skill, and they are reflected in the wordings of various legal acts.
Difficulties appear as soon as you try to define "game of chance", a term which any definition of gambling is bound to include. A lot of games involve an element of chance without being games of chance. For a game to be a game of skill rather than a game of chance, skill may be required to be the "dominating factor" when determining the result of the game, or some similar wording.
So how do you decide which factor is dominating? What does domination mean? How do chance and skill interact in the first place, and how can they be compared? First, let's look into something even more fundamental - the nature of chance and skill themselves.
The nature of chance
When we say that something is determined by chance, we mean that its outcome is unpredictable. We cannot know in advance how it will turn out. Chance is often associated with the roll of a die, the distribution of cards, etc., but unpredictability shows up in many everyday situations as well. The time that we must wait for the bus, or whether it will rain tomorrow, are unpredictable, random events.
When an ice hockey player shoots from the blue line, the outcome of the shot is unpredictable. If shots from the blue line always missed, no one would ever try. And if they always scored, shots from the blue line would probably be ruled out. Does this turn ice hockey players into gamblers? No, generally skill is supposed to be the dominating factor in ice hockey, as in most sports.
When two persons decide to have a child, they cannot know what kind of personality they invite to live in their home for the next twenty years or so.
Even the game of chess, often considered as being the epitome of skill games, can be said to contain an element of chance - since the outcome of a move is usually unpredictable, even for the sharpest minds or massively parallel computers. A chess player can often feel lucky when a difficult choice turns out to be advantageous.
Thus, chance, or randomness, is in no way restricted to games. Some games are constructed around a random generator, such as a deck of cards, but one should not think that real life events are less random.
The reason for the unpredictability of an event may vary, from a deck of cards being shuffled to the event being the result of an uncontrollable number of conspiring factors. However, the reason for, or mechanism behind, randomness is not important. Mathematically as well as philosophically, unpredictability itself is a sufficient and necessary requirement for the occurrence of randomness.
The nature of skill
In this perspective, what is skill? In a general sense, skill can be seen as the ability of a person to influence the outcome of events in a desired direction. A skilled person can make things turn out in a way that suits her will.
While chance produces erratic patterns and unpredictable to-and-fro movement, skill introduces a tendency to the movement. Ice hockey players agree that you cannot win all games. The outcome of a single game is unpredictable. But they wouldn't spend all their waking hours in chilly arenas if they didn't believe that skilled players can influence the outcome of games in their favor.
In the case of repeated random events, such as the repeated roll of a die, skill can be said to affect the mean value of the outcomes. Each individual outcome will still be unpredictable, but the outcomes will point in one direction a little more often than in others. Using skill, a player can tweak the chance factor in a desired direction.
In black jack, the skilled player will compare his own up cards with that of the dealer and make an educated decision whether to stand or take a new card. He cannot know if he will in or lose the current hand, but he knows that by choosing the right option he will have a better chance to win.
Skill in games
For a game to involve a skill factor, the game must allow players to make some sort of choice between alternative strategies with different expectations. If all a player need to do is to pull a lever or call a certain telephone number, there is no skill involved in the game.
A game such as online video poker actually involves a certain element of skill, since the player must choose which cards to hold before the draw is performed. True, the decision is usually quite simple, but since it is possible to make bad decisions, skill is involved in the game.
Black jack has a skill factor since it involves decisions of a rather high complexity, and the skilled player will show better results on average than players with less skill.
Roulette, on the other hand, is a game with no skill factor. It doesn't matter how the chips are spread out over the numbered fields, the player always has the same expectation.
Different kinds of lotteries usually don't include any skill. In Lotto, all number combinations have the exact same chances of winning.
Skill vs. chance
So, then, how can we go about to determine which factor dominates over the other? Well, it may come as some surprise, but the answer is that skill always dominates over chance - over time.
No matter how small the mean value resulting from skill is compared to the amplitude of the random variations, no matter how weak the tendency in the erratic movement, it will prevail. Skill works in one single direction and all small contributions adds up, while the erratic variations of randomness cancel out over time. Chance is involved in most games as well as in most real life situations, but as soon as there is any skill involved at all, skill dominates in the long run.
However, this being the case does not mean that a skilled player will necessarily show a profit. Firstly, if the variations are large compared to the skill-induced tendency, a player may not be able to afford enough playing sessions to give variations time to cancel out. This is where the question of bankroll requirements comes in, as is well known in the poker community, as well as among stock traders.
Secondly, all skill in the world is no good if the game is unfair.
In most games, players play under equal conditions. However, in certain games the rules of the game grant one player better chances than the other players (this one player usually being the house). The game is biased, or unfair.
This is usually the case in casino gambling games, such as roulette, slot machines or video poker. Roulette is an unfair game of chance, where players on average must expect to lose a certain fraction of their bets (thanks to the number zero and the way winning bets are rewarded).
Black jack is an unfair game of skill, since even the most skilled player will have a slightly negative expectation against the house. It is true that players who count cards can turn the odds to a slight advantage, but casinos prohibit card counting, which in a sense makes black jack doubly unfair.
Poker is a fair game of skill. All players are equal as far as the rules of the game are considered, and other players win what one player loses - poker is a zero-sum game. However, when poker is played in casinos, the rake skews the game in a way similar to that of the number zero in roulette. Strictly spoken, the rake is not part of the game - it is a mere fee, just as there is a fee when you play golf. On the other hand, the size of the rake is usually related to the size of the pot, and the rake often rubs off a larger fragment of players' bets than, for example, the unfairness factor in roulette, thus probably making poker players as a group bigger "losers" than roulette players.
When comparing games, an important consideration is the level of player interaction allowed. Interactivity adds a further level of skill to a game. Not only must a player make good choices in relation to the mechanisms of the game itself. Furthermore, the skill of one player is tested against the skill of the opponents. This gives the game a social dimension that seems to be very gratifying for practisers of games such as ice hockey, golf, poker or bridge.
In roulette there is no interaction at all between players. The results for one player are not in any way influenced by the choices of other players. Even when several players play on the same table, roulette is strictly an affair between the house and the individual player.
Blackjack is an unfair game of skill with no player interaction. Each player plays alone against the house.
Poker on the other hand is strongly interactive. It is a fair game between interacting players, and the role of the house is restricted to producing unpredictability.
Thus, there seem to be some essential differences between organizing, on one hand, unfair games of chance where players play against the house at losing odds and, on the other, games of skill where players engage in fair competition in a stimulating social context. For any gambling law to gain wide acceptance, it probably needs to reflect these differences.
Skill, fairness and player interaction in some popular games.
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Source: Article provided by the Online Casino and Poker Guide Gambling-win.com.