Research spotlight – Skill-based gambling machines: An opportunity to update evidence to support policy

Research spotlight – Skill-based gambling machines: An opportunity to update evidence to support policy

By IAGR Media

By Dr. Sally M. Gainsbury | Co-Director, Gambling Treatment and Research Clinic, Brain and Mind Centre, Associate Professor, School of Psychology, Science Faculty, University of Sydney

Technological advancements have transformed the gambling industry, including how, when, and where consumers engage in gambling. Many of the innovations have been incremental, updates to analogue versions with similar functions. However, electronic gambling machines (EGMs) in their various configurations internationally (pokies, slots, fixed odds betting terminals, video lottery terminals) in 2019 are substantially different from machines available ten and twenty years ago. This becomes potentially problematic as evidence used to inform policy is often based on studies conducted with older machines, in different style venues, with different populations than currently gamble.

EGMs are now available that incorporate skill-based elements, referred herein as hybrid gambling machines (HGMs), but also known as skill-based gaming machines, skill-based slots, and interactive gambling machines. HGMs incorporate elements central to gaming, including narrative, story, theme, progression, achievement, completion, competition, socialization and of course skill, into the random number generator-based gambling machines. To be regulated as gambling machines, these have a minimum return to player percentage, ensuring that all players, even those with no skill, can experience wins. Skill may be achieved in different forms such as hand-eye coordination, response speed, spatial reasoning, pattern recognition, or problem solving. HGMs may include hand-held devices which range from joysticks to guitars or touchscreens and can be single player or multi-player in competitive or collaborative gameplay. Genres vary to increase appeal and often mimic casual mobile games, popular video or online games or more traditional arcade games.  Some games limit skill to a bonus or feature round and include reel spins, others integrate skill into a greater element of game play. Players with greater skill can improve their chances of winning to a certain extent, as skill-based prizes are generally capped to prevent players from ultimately beating the house advantage and taking large prizes. Some games interact with players and detect skill level to vary the difficulty and chance of winning.

For players, HGMs intent to make gambling fun and enjoyable by introducing social and competitive elements. For gambling operators, a strong motivation is to make gambling appealing to consumers who are not currently interested in slots to broaden their customer (and revenue) base. However, for regulators, it is essential that HGMs are investigated thoroughly and there is sufficient evidence to satisfy legislative tests for example, that the products do not lead to an exacerbation of problem gambling. Currently, HGMs are specifically licensed in several US states, however,  they are being considered in other jurisdictions and some companies have HGMs they claim would be permitted under existing regulatory codes.

The impact of HGMs on problematic game play is not well understood. Some HGMs have a longer time period between bets being placed and outcomes decided, which may slow consumer expenditure. However, previous Australian research found that when rates of play were purposely slowed on EGMs, problem gamblers bet larger amounts, thus increasing their expenditure. HGMs that have a dedicated skill section within a feature or bonus round, may result in increased time on device, but fewer bets placed during this time period. This may act as a break in play and increased cognitive engagement, which could reduce the experience of disassociation (losing track of time and money spend), and increased ability to actively decide to continue or cease gambling. Alternatively, there is some evidence that forced breaks in gaming increase urges to continue play. HGMs that include social interaction may be less conducive to problematic gambling, which is often a solitary pursuit.

Irrational thoughts and erroneous understanding of the chances of winning on EGMs are a central aspect of problematic gambling and players often perceive that they have skill or strategy that can ‘beat’ machines. HGMs which are marketed as involving skill may result in illusions of control – that is, player belief that their skill has a greater influence on the outcome than is accurate. Gamers and gamblers often overestimate their skill and abilities and unlike in gaming, ’practicing‘ on HGMs may be highly costly for gamblers. This feature may thus exacerbate problems among individuals with existing gambling problems and lead to gambling problems among a new cohort of gamblers.

There is currently limited research to assist regulators in understanding the potential impact of HGMs. One HGM manufacturer, GameCo, reports in a Whitepaper that after two and a half years of operation, the average customer is approximately 25 years younger than most slot players. They also report three to four times more play without a loyalty card than slots, suggesting customers are not regular slot players, and thus are creating incremental revenue [SH1] [SG2] . Two studies have been conducted by this author and colleagues (Gainsbury, Philander & Grattan) with a sample of US casino patrons after play on a HGM and among an online sample of US adults residing in states where HGMs are available. The results will be presented in full in academic publications. In both samples, intention to gamble on HGMs was related to positive personal attitudes and perceptions that other people will approve of HGM play. Findings indicate that consumers have some understanding that skill is involved in HGMs and perceive this relatively accurately to be around the same level as in blackjack, however, a large proportion admit that they do not have a good understanding of the role of skill in HGMs. Further, those who have played HGMs appear to have greater levels of irrational thoughts about gambling, greater overall gambling involvement, greater gambling problem severity, and are more likely to be younger than those who have not previously played HGMs.

These results indicate that further efforts to educate consumers about the specific role of skill within HGMs will be necessary if these are approved for play. Playing HGMs does not appear to be sufficient to increase understanding of the extent to which skill determines outcomes, suggesting that the games are not sufficiently informative during play and specific educational materials are required. As with other novel gambling activities, these appear to be attractive to those with existing gambling problems. Further, HGMs do appear to be appealing to a younger cohort, and younger adults, particularly males, are often recognized as a high-risk population due to their propensity to be involved in risk activities. Specific efforts are needed to design customized harm-minimization strategies for HGMs to protect consumers.

It is important to note that the two studies conducted included relatively small, non-representative samples exposed to only a portion of HGMs. No causal implications can be drawn due to the cross-sectional nature of the research. Ongoing research is required to fully understand the impact of HGMs, including on gambling problems. This should include laboratory research and in venue field trials. It is critical that regulators collaborate with researchers and industry, which may include provision of funding and access to machines, venues and participants to conduct rigorous and ecologically valid research. Research needs to include short- and longer-term timeframes to fully investigate impacts over time. This presents an opportunity to similarly reevaluate already regulated EGMs. There is still a relatively poor understanding of the impact of specific structural characteristics on game play and problematic play as well as innovations and augmentations of traditional EGMs. There is a need to replicate previous research on newer EGMs with populations that currently play these and to evaluate the effectiveness of harm-minimisation policies and practices.

Technological innovations and the introduction of HGMs may present an opportunity for regulators to become more involved and supportive of research. Evidence-based policy is critical to ensure that consumers are protected from gambling-related harms. Regulators have a requirement to ensure that products are not harmful and policies and practices designed to minimize harms are effective. Further research is needed for both existing EGMs and new HGMs and could result in significant benefits for consumers and subsequently the broader community.

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