Gambling in Games

I think back to my childhood of some of my favorite games and realize the concept of “chance” played an important role. In many games, the system is made to utilize random chance to extend playability. A game like World of Warcraft utilizes this in item/loot drops. Each enemy has a specified probability of dropping a range of loot. The entire game is just pressing a variety of keys on an elaborate slot machine where the reward is loot instead of monetary credits.

One of Blizzard’s other hit franchises, “Diablo” has gambling functions within the game. The in-game gold is used to purchase unknown item classes with variable stats. This may or may not have been the reason so many users spent countless hours farming the in-game currency. I see little difference in using real Canadian dollars to purchase the in-game currency, and then use these “credits” to purchase items with randomly assigned values; and then potentially “cashing out” by selling these items back in exchange for real world currencies.

Are we training our children to keep pushing the neuro-gratification button? When the games become boring will they make their way to the slot machines? The exploitative American gambling laws we heard about today in Nevada – will the people ever need to leave their computer chairs? When the system is set up such that the “house” slowly dwindles your money while distracting you with flashy lights; or perhaps worse, makes you feel like you’ve accomplished something by destroying a game sprite demon of some kind — do these people even have a …chance?

5 thoughts on “Gambling in Games

  1. geoffpedlow

    I agree there is a considerable luck element to fantasy RPGs. It’s a fundamental part of the game and, as you said, is a primary reason there is endless playability. Buying virtual currency and using it in a luck-based mechanism in hopes of a reward that has real world value would certainly constitute gambling in my view. I think it is for this reason that developers will always have to be very careful to prevent that link from being made.

    I am more interested by the games on the skill side of the spectrum and whether wagering on the outcome of those will be (are?) permitted under Canadian law. I’ve seen a number of efforts to build a back-end system that permits 1 vs 1 match-ups in “skill” games (e.g. FPS games like CS, MW, BF and RTS games like SC, LoL, etc.) where each player puts a wager on the line with the winner taking the pot and the “house” taking their cut. As far as I know, this system would be permitted under criminal law as it does not constitute gambling as long as the game is a game of pure skill (right?). To my knowledge there is no commercially available version of this yet so we can’t know how the courts will react. I’m very curious to see how the courts apply the skill vs chance analysis to highly intricate games. All games have some kind of RNG element to it and at what point does it make the game mixed skill and chance.

  2. Tyler Dennis Post author

    I like the idea of creating a billiards hall environment through Starcraft/LoL match ups. If the wagers were large enough it might be worth purchasing multiple copies of the game as to hide your ranking (or in LoL merely starting additional accounts). A “smurfing” of sorts. I think the gamer nerd rage would reach unprecedented levels should wagers be incorporated into skill based games. And as you say, with any random number generators being thrown into the mix, more and more is left to chance.

    I think the RNG aspect of many games is to dampen/buffer the advantage an experienced player has over a n00b. That’s the problem with a game like poker. It’s difficult to say whether the game is based on skill or luck. A world champion poker player’s advantage is substantially diminished when they face someone that has literally no experience playing. For the n00b, they face a world champion and the game is PURELY based on luck — they have no strategy, they may not know the rules, and their poker face certainly cannot be “read” having little idea about what hand beats what. Concurrently though, for the champion, they might have a slight advantage over the long term by understanding some basic statistics. Do we call that skill? Teach the n00b the phrase “all in” and they very well beat a world champion!

    The more balanced games, (starcraft, LoL etc..) their randomness is minimized, perhaps why there are tournaments with top prizes ranging from thousands to millions of dollars! I wouldn’t support wagering in the games unless they were perfectly balanced, like a game of chess where “both people go first”. LoL is never balanced (they can make more money by over powering one character thereby incentivizing people to play them and increase the likelihood of purchasing skins etc…).

    The bigger issue is, we’re talking about games turning into jobs… I’m not a parent, but I feel like if I was, I wouldn’t be encouraging my kids to get involved in any of it. Good way to destroy the industry.

  3. Dianna Robertson

    with regards to the issue of on line games of chance vs skill and gambling, issues may also arise related to tax in Canada. Based on my limited knowledge of Canadian tax law, gambling is considered a past time (as opposed to business activity) and therefore not taxable. when partipating in an on-line game (where there are prizes and cash) I suspect that Canadian tax law will eventually start to look closer at whether these games are mere chance or skill based and tax accordingly.

    1. Tyler Dennis Post author

      A very good point Dianna! Though, from my (very) limited knowledge of Canadian Income Tax law, from M.N.R. v. Morden [1961] C.T.C. 484; gambling with little sophistication is considered a past time. Should the gambler develop their habit such that it’s highly organized and looks more like a business, the payouts will be considered income from business income. The test is a “reasonable expectation of profit” – should the gambling be considered a business, the losses are also deductible.

      Video games raise an evidential issue though, one of the factors the courts would no doubt look at is length of time spent “logged in”. If, on the evidence, the gambler is recorded logged into an online casino from 9am-5pm 5 days per week, I suspect they’re going to have a difficult time convincing anyone it’s NOT business income. The person that runs into random casinos from 9-5 doesn’t necessarily have the same burden. Worse, it’s so easy to keep a secondary window open (or program to do it for you) to track your winnings and losses whilst playing on a computer. Not that I’m in the casinos terribly much, but I’ve never observed a diligent gambler keeping track of their ups and downs in the fashion akin to book keeping/accounting.

      1. Dianna Robertson

        Tyler; I suspect that the casinos would quickly go out of business if patrons starting to actually keep track of their ups and downs 🙂
        you do raise an interesting point about on line gaming and gambling; it leaves a clear trail to show a pattern of behaviour that could be used by CRA to show a business (through reasonable expectation test).


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