LEGAL FRONT

Skill-Based Games Are Coming to Nevada – Could Indian Casinos Be Next? by Erin Elliott

“The introduction of skill-based games and hybrid games that include aspects of both skill and chance onto the casino floor would likely result in the casino floor appealing to a larger audience.”

ccording to the Entertainment Software Association, factor in affecting the outcome of the game as determined over A approximately 155 million Americans play video games. a period of continuous play.” Skill is defined as “the knowledge, In 2014, consumers spent $22.41 billion on video game-related dexterity or any other ability or expertise of a natural person.” purchases. The average video game player is male and 35 A device that offers a game of skill “must indicate promi - years old. In contrast, the average slot machine player is female nently on the gaming device that the outcome of the game is and over 40 years old. There is obviously a market here that affected by player skill.” For casino patrons that choose to play casinos throughout the United States and their vendors have one of these new skill-based games, their talent and ability been missing. Imagine the potential increase in gaming should have more impact on payout versus the randomness of revenue of Indian casinos if the average video game player joined traditional games of chance. the average slot machine player on the casino floor. The newly adopted regulations not only provide for skill- Video games developed under the Halo and Call of Duty based games, but they also anticipate “hybrid games,” mean - franchises require players to exercise certain levels of skill in ing “a game in which a combination of the skill of the player order to progress to higher levels in the games. The introduc - tion of skill-based games and hybrid games that include aspects and chance affects the outcome of the game as determined over of both skill and chance onto the casino floor would likely result a period of continuous play.” in the casino floor appealing to a larger audience. This larger Game developers are moving quickly to come up with new audience could include traditional video game players and skill-based and hybrid casino games. For example, at the 2015 millennials, many of whom prefer more competitive and Global Gaming Expo, Scientific Games introduced their new interactive games than what is currently available for play in Space Invaders slot machine, which includes skill-based casinos. elements similar to a traditional video game. Other skill-based Nevada has already taken note, and it is anticipated that other and hybrid games were also on display. jurisdictions will follow. On May 21, 2015, Nevada Governor Indian tribes that operate Class III gaming facilities, and Brian Sandoval signed Senate Bill 9 (SB 9) into law, which those companies that manage certain facilities, may want to was promoted by the Association of Gaming Equipment evaluate the impact that skill-based games could have. Indian Manufacturers. SB 9 states, in part, that the “continued growth tribes that wish to pursue the offering of skill-based games will and success” of Nevada’s gaming industry depends on the likely first need the National Indian Gaming Commission promotion of “continued advances in the use of technology in (NIGC) to approve minimum internal control standards for gaming, which improves the entertainment experience, encour - skill-based games. The current NIGC Class III minimum ages innovation and supports expansion of the domestic internal control standards do not specifically anticipate pure technology sector....” Perhaps the same is true for the Indian skill-based games. The NIGC Class III minimum internal gaming industry. The Indian gaming industry will likely find control standards define a “gaming machine” as “an electronic Nevada’s newly adopted regulatory structure for skill-based games instructive. or electromechanical machine that allows a player to play SB 9 directed the Nevada Gaming Commission to create games of chance, some of which may be affected by skill....” gaming regulations to support the introduction of skill-based For tribes interested in the future of skill-based games and games to Nevada casinos. The Commission worked with the the potential for this new market, further investigation is in Nevada Gaming Control Board to draft skill-based gaming order. ® regulations, which were approved by the Commission on September 17, 2015. Erin Elliott is an Associate at Brownstein Hyatt Farber The regulations define a “game of skill” as “a game in Schreck, LLP. She can be reached by calling (702) 464-7016 which the skill of the player, rather than chance, is the dominant or email [email protected].

16 Indian Gaming December 2015