Frequently Asked Questions (Regulatory and Legal)

Updated October 18, 2022

WHAT EXACTLY IS A SKILL BASED GAME?

The simplest definition for a skill-based game is a game in which the outcome is determined primarily by physical or mental skill rather than purely by chance. These are often characterized in law as bona fide contests of skill. A very common definition found in many states is a “bona fide contest of skill, speed, strength, or endurance in which awards are made only to entrants or the owners of entries.”

Most people are probably familiar with winning prizes for skill-based games in the context of carnival or county fair games, for example as the “Ring Toss” (tossing rings around targets), the “Balloon Pop” (popping balloons with darts), or the “High Striker” (hitting a target with a sledgehammer that sends a measuring device upwards). In each case a player pays for a chance to play the game each of which requires some type of skill or strength and depending upon success is able to win a prize, sometimes cash but usually a large stuffed animal.

More high profile examples of real cash prizes for skill-based contests abound: the Professional Golfers Association (PGA) Tour where the 2021-2022 season prizes total over $481 million and where individual tournaments takes place in a variety of U.S. states, the Iditarod dog sled race across Alaska where the total purse is over $500,000, or the classic basketball halftime half-court shot contest where the prize is usually a car. Fans of esports and video games might be familiar with the “The International” competition for Dota 2, the “Fortnite World Cup Finals”, or the “LOL (League of Legends) World Championship”.

One could argue, and many online poker companies have argued, that skill-based games exist in most casinos today in the form of poker. In fact, some courts have found that certain poker games such as Texas Hold’em are in fact skill-based, though unfortunately most states have not. Although fantasy sports and daily fantasy sports are most often regulated under a different set of laws with their own regulations, they are considered by a few states to be skill-based, as the knowledge of the players and their performance statistics can be the dominant factor in determining a win.

Today, skill based games with real cash prizes are available through major media and internet companies such as Google, Apple, and Yahoo. It is only recently that the application of skill-based contests to esports and video games for recreational players has occurred.

ARE REAL-CASH SKILL-BASED TOURNAMENTS THE SAME AS GAMBLING?

You may be surprised to learn that paying to enter into and winning prizes in a skill- based contest is not considered to be gambling in the majority of US states and many countries worldwide. That is why a carnival operator can give the winner of the Balloon Pop a giant teddy bear and why the first place winner at the PGA’s Waste Management Phoenix Open wins $1,476,000.

The most widely accepted legal definition of gambling requires three specific things: (1) the award of a prize, (2) paid-in consideration (entrants pay to compete), and (3) an outcome determined by chance. A competition that awards real-cash prizes is not gambling unless all three of the elements are present. With respect to skill-based gaming the most relevant element is that of chance.

There are two major legal tests used in the U.S. regarding whether something is considered “chance” that would make a game be considered to be gambling, each test considers the level of chance in a game. These tests are called the “dominant factor test” and the “material element test”.

The dominant factor test is the most common U.S. state legal test used to determine whether a game is skill-based or chance-based. Essentially, if chance has more than the majority of the effect of determining a winner or score in a game then a game will fail the dominant factor test, if skill makes up more than the majority then it will pass the test. A clearly skill-based game, for example, is chess where there is no chance during gameplay that effects the game. An example with more chance is Scrabble, the letters in your hand and what order players play in are determined by chance but how you play the letters and for the score obtained is highly skill dependent. Scrabble is so skill dependent in fact that the top Scrabble players in the world often come from the same small group of people. Given that there is some chance but that skill is the major or dominating factor Scrabble would pass the dominant factor test.

The material element test is the second most commonly used test in the U.S. It is used by a handful of states to determine whether a game is skill-based or chance-based. The test asks whether chance plays a significant or material role in determining the outcome of a game. For example in the game Backgammon players generally use a great deal of skill, but the roll of the dice is random with the result being that a series of good or bad rolls can determine the winner or loser of the game despite the skill used. Some states have determined that such a game has a material element of chance – the dice rolls – and as a result would not be considered a game of skill. Although skill is dominant, chance plays a significant role in determining the game's outcome.

As may be clear the “Material Element” test is a more restrictive test than the Dominant Factor test. Games which are considered skill-based under the material element test will also pass the dominant factor test.

There are a number of other unique limitations in different states, for example, some states do not allow any card games to be considered as skill-based, others exclude dice games, some consider certain types of poker to be included, and others do not. Triumph tracks and limits real-money cash tournaments use in jurisdictions where the game to which it is applied is not allowed.

To make sure that the real-cash games are allowed in the jurisdictions were the tournaments can be played Triumph applies a rigorous compliance screening process to ensure that each game meets either the applicable legal test in the jurisdictions in which it offers the games to the public.

As a result the outcomes of each game in the Triumph system are not determined by chance but rather by a player's skill or ability. Triumph’s selection of games, its screening process, and its ongoing compliance activities are what allows Triumph to offer its tournaments in the majority of U.S. states and many non-U.S. countries.

WHAT SERVICES DOES TRIUMPH PROVIDE?

Triumph operates a digital platform that handles player matching, legal compliance, anti- cheating, player account management, tournament design, leader board tracking,

cross-marketing, and other features that integrate with digital games. The Triumph platform allows game developers to focus on what they do best – design fun games and lets players take their gaming to the next level in competitions for real-cash prizes.

As we love games and gaming we also publish our own games which use the Triumph platform.

If you are a game developer and are interested in integrating the Triumph Platform you can apply here.

WHAT CRITERIA DOES TRIUMPH USE TO DETERMINE WHICH GAMES ARE SKILL-BASED?

Triumph applies a rigorous initial screening and ongoing compliance review of its games to ensure that they meet applicable legal standards. The initial review process includes an analysis of chance-based elements in either gameplay or the awarding of score, collection of game compliance information from developers, analyzing starting conditions creation and/or map and feature generation, obtaining and applying advanced statistical analysis to gameplay data, and a very rigorous qualitative analysis – a fancy way of saying we spend a lot of time playing the games.

The following are a few key issues we consider in determining whether a game is skill based and whether awarding real-cash or other valuable prizes is allowed or not:

Are points awarded based on skill? For example, is a target that is harder to hit worth more than a target that is easier to hit.

Are there elements of chance in awarding points? As would be the case, if for example, targets of similar difficulty to hit had different points associated with them or random or variable points.

How are ties or draws handled between players? In a draw scenario Triumph returns player entry fees to each player less the Triumph fees.

Does the game's format allow a skilled player to consistently outperform a less skilled competitor? Here we use a variety of gameplay statistical analyses.

Is the game free of critical decisions that can only be made by guessing? For example, the game Battleship under original rules requires guessing, however, if a person is provided a short opportunity to view the opposing players board such that memorization is important it may become a game of skill.

Are there clearly defined and articulated rules? Triumph provides gameplay rules for each game - usually they are quite simple – and also provides the opportunity to practice each game.

Is there a predetermined chances of success? This would be true, for example, if in a multiplayer game only a subset of players were allowed to continue regardless of score or skill.

Do random events exist that materially affect the gameplay? For example, in PacMan if the ghosts were randomly placed on the game map as opposed to coming from known locations.

Is increased score in the game dependent on skill level? Here statistical analysis helps identify players scores and connects their scores to skill in the game.

Is the value of the prizes associated with increased score, such that higher scores are awarded higher value prizes? This may not be the case if the points awarded are random or subject to random multipliers.

Is it possible to “seed” randomness in a head to head game? Taking the PacMan example, in a head to head game, we’d make sure the ghosts are generated in the same location for each player.

After release Triumph’s maintains on ongoing compliance review for each games includes tracking game updates for variances from the initial screening and the collection and analysis of gameplay data. As Triumph was founded by big-data experts we use the large amounts of game data generated to help create fun tournaments and the best gameplay environments for players, for example, in some cases through skill- based matching, as well as to ensure compliance with the applicable legal tests through the use of a variety of statistical models.

One of the most important statistical models we create is a modified Elo rating system. This is a rating system applicable to skill-based games that you may be familiar with if you have ever seen a Chess score. The Elo rating system is a mathematical method that identifies a player’s chance of winning between two players of the same game. Being able to create and track changes in player Elo scores and related statistical analysis derived from it, for example player improvement over time, provides a basis for determining and ensuring a game is, in fact, skill-based and to what extent.

WHAT IS THE LEGAL STATUS OF SKILL-BASED TOURNAMENTS IN THE UNITED STATES?

Federal law in the United States does not prohibit skill-based real-money tournaments. The Unlawful Internet Gambling Enforcement Act of 2006 is the most significant piece of legislation in this regard and it restricts financial transactions associated with "betting or wagering" if the "betting or wagering" is illegal where it is initiated or received. As skill- based games are not considered gambling in the jurisdictions in which they are offered by Triumph they are exempt from the UIGEA.

Said another way, there is no federal prohibition applicable to Triumph games as long as the player’s activity is legal in the state or jurisdiction where it originates and in the state or country where the prize is received. As you can imagine Triumph staff spend a lot of time tracking the changes in legal status and insuring that the players are located in the proper jurisdiction.

WHERE DOES TRIUMPH OFFER REAL-CASH PRIZES IN ITS COMPETITIONS?

As previously stated, the legality of skill-based competitions in the United States is determined at the state level, and Triumph has taken extensive measures to ensure that its products are fully compliant with all applicable laws.

As of today, Triumph provides real-cash prize competitions in jurisdictions covering over 75% of the U.S. population excluding only: Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Kentucky, Louisiana, Maine, Maryland, Mississippi, Montana, Nebraska, New Hampshire, New Medico, South Carolina, Tennessee, Puerto Rico, and Washington. We continue to track changes in law with or without the addition of compliance features to offer skill-based games where allowed.

HOW DOES TRIUMPH MAKE SURE THAT MY PLAYING OF ITS GAMES IS ALLOWED?

Triumph’s platform uses global positioning system (GPS) data to make sure that a player is in a location where playing the Triumph games for real-cash prizes is allowed. You can sign up for an account anywhere and withdraw money from your account from anywhere but you will not be able to play the games in jurisdictions in which real-cash competitions are not allowed. We also check for very private network (VPN) use and disallow gameplay from devices employing VPN systems – apologies to those of you trying to play at work!

HOW FAIR ARE THE TRIUMPH GAMES?

Triumph takes the fairness of gameplay very seriously as it is important to creating a great gameplay environment for players as well as for compliance purposes. In order to make sure the games are fair we use digital technology to check devices on which games are played for functions that would allow for cheating, we publish the gameplay rules in its Terms of Use or in the game itself, depending on the game or tournament type we may apply some level of skill-matching, and we provide the opportunity to play the games for free – in fact we may pay you to learn our games - just select “Practice” in most Triumph games. We also take our Terms of Use seriously and ban players who violate them.

STILL NEED TO CONTACT US?

For legal, regulatory, and compliance support email [e-mail].

For customer support related to skill-based tournaments or accounts email [e-mail].