Measuring skill and chance in games

Arbeitspapier

Online and offline gaming has become a multi-billion dollar industry.However, games of chance are prohibited or tightly regulated in many jurisdictions. Thus, the question whether a game predominantly depends on skill or chance has important legal and regulatory implications. In this paper, we suggest a new empirical criterion for distinguishing games of skill from games of chance: All players are ranked according to a "best-fit" Elo algorithm. The wider the distribution of player ratings are in a game, the more important is the role of skill. Most importantly, we provide a new benchmark ("50%-chess") that allows to decide whether games predominantly (more than 50%) depend on chance, as this criterion is often used by courts. We apply the method to large datasets of various two-player games (e.g. chess, poker, backgammon, tetris). Our findings indicate that most popular online games, including poker, are below the threshold of 50% skill and thus depend pre-dominantly on chance. In fact, poker contains about as much skill as chess when 3 out of 4 chess games are replaced by a coin flip.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper Series ; No. 643

Classification and Topics

• Classification: Wirtschaft ; Sports; Gambling; Restaurants; Recreation; Tourism ; Noncooperative Games
• Subject: ELO ; ranking ; games of skill ; games of chance ; chess ; poker

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Duersch, Peter ; Lambrecht, Marco ; Oechssler, Joerg
• Event: Veröffentlichung
• (who): University of Heidelberg, Department of Economics
• (where): Heidelberg
• (when): 2017

Further information

• DOI: doi:10.11588/heidok.00023867
• Handle: http://hdl.handle.net/10419/179272
• URN: urn:nbn:de:bsz:16-heidok-238671
• Last update: 10.03.2025, 11:42 AM CET