Current Addiction Reports (2020) 7:229–236
https://doi.org/10.1007/s40429-020-00309-9

GAMBLING (L CLARK, SECTION EDITOR)

Skill-Based Electronic Gaming Machines: a Review of Product
Structures, Risks of Harm, and Policy Issues
Dylan Pickering 1

& Kahlil S. Philander

1,2

& Sally M. Gainsbury

Published online: 22 April 2020
# Springer Nature Switzerland AG 2020

Abstract
Purpose of Review Skill-based gaming machines (SGMs) add interactive and/or skill features to electronic gaming machines
(EGMs), often modelled on elements from arcade, video, online, or mobile games. Availability of SGMs is expanding in the USA
and internationally, but evidence of the impacts of these machines is lacking. To provide direction to policymakers and the
scientific community, this review critically evaluates the relevant literature and suggests future avenues for research and consumer protection measures.
Recent Findings Early data suggests that SGMs are most appealing to younger demographics and are likely to attract participation from regular gambling or gaming populations, potentially those with pre-existing problems. Studies of skill elements within
other gambling activities indicate that players tend to overestimate their level of control in gambling situations that are determined
by chance. Skill involved in SGMs could elicit illusions of control in players, which may contribute to the development of
gambling problems.
Summary The impact of introducing SGMs is still relatively unknown. There is limited robust ecologically valid research on the
use of these machines within gambling venues. It is possible that, like other new gambling activities, the introduction of SGMs
may lead to harm. Vulnerable populations may include young adults, those with pre-existing problems, and those already
involved in gambling and video/mobile gaming. Preliminary consumer protection strategies include player education techniques
and account management tools, paired with an empirical evaluation framework. Future studies, including laboratory and field
trials, are needed to examine if SGMs more strongly appeal to at-risk gamblers, to determine whether players recognise skill
versus chance components, and understand the relationship between involvement, increased cognitive distortions, and problem
gambling.
Keywords Skill-based gaming machines . Hybrid gaming machines . Illusions of control . Problem gambling . Consumer
protection . Harm minimisation

Introduction
Electronic gaming machines (EGMs) that include a skill
element, referred to herein as skill-based gaming
This article is part of the Topical Collection on Gambling
* Kahlil S. Philander
kahlil.philander@wsu.edu

Science Faculty, Brain and Mind Centre, School of Psychology,
Gambling Treatment and Research Clinic, University of Sydney, 94
Mallet St, Camperdown, Sydney, NSW 2050, Australia

Carson College of Business, School of Hospitality Business
Management, Washington State University, 915 North Broadway,
Everett, WA 98201, USA

machines (SGMs), have emerged as a new category of
gambling. These machines are reportedly designed by
gaming machine manufacturers to attract younger and
more diverse consumers [1••, 2]. Precipitating the development of SGMs are decreased participation rates in standard EGMs (e.g. ‘slots’, ‘pokies’, ‘VLTs’) and a growing
preference for gambling activities emphasising skill and
player-experience [3, 4]. Although several variants of
SGMs exist, they may be simply described as a hybrid
between arcade, video, online, or mobile games and
EGMs. This category of machines reflects an integration
of player skill, interaction, and impact into a primarily
chance-determined game that must produce outcomes determined by some technical boundaries, such as minimum
return to player percentage (RTP%) regulations.

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As of December 2019, SGMs are legally available in five
US jurisdictions: New Jersey, Connecticut, Nevada,
California, and Georgia [5–7]. In other US jurisdictions, including Virginia and Pennsylvania, there are cases where
SGM manufacturers have claimed that these are games entirely of skill, rather than skill and chance, and therefore should
not be classified as a gambling product [8]. Similar legal strategies were used in Ontario, Canada, but those arguments
failed to withstand legal challenges [9, 10]. Gaming machine
providers are seeking regulatory approval and expansion of
SGMs into other regions, including Australia, the UK,
Netherlands, and Macau [11]. Various factors complicate the
licensing process, including the inadequacy of existing legislative codes and standards for the unique structural composition of SGMs.
Given the novelty of this new technology, there is a lack of
empirical data to inform policymakers about impacts that may
be associated with SGMs, including potential harms and the
specifics of prevention and harm minimisation strategies required to counter impacts. Notably absent is study of the machines’ potential to cause or exacerbate problem gambling,
defined as spending excessive time and/or money gambling,
which leads to serious harm affecting personal finances, relationships, and mental health [12]. To provide direction to
policymakers and the scientific community, this review article
provides a detailed description of the structural features and
variations of SGMs, assesses current data on SGM player
demographics, proposes potential paths for SGMs to cause
harm to players based on theoretical and hypothesised mechanisms, and outlines consumer protection strategies that may
be useful in preventing harms.

segmented bonus game play, which may be triggered randomly in an otherwise traditional reel game. In most cases, the
RTP% of SGMs is set below 100% to guarantee positive gross
gaming revenue—even the most skilled player cannot expect
to overcome the house edge and win money over the long-run
in those games. Less common are SGMs that provide adequately skilled players with opportunities to achieve a positive
long-run return [1••]. In these cases, industry revenue is
earned from a larger proportion of less skillful players.
As a new product offering, SGMs are undergoing a period
of rapid innovation and multiple configurations have emerged
(see Table 1 below for actual product examples). Machine
designs include various games themes (e.g. first-person shooter, sports games, solving puzzles, and traditional arcade
games), unique hardware (e.g. touchscreens, joysticks, controllers), and player skill domains (e.g. literacy, pattern-recognition, hand-eye coordination, response speed, target
accuracy).
There is an ongoing experimentation in SGM design elements. It is presently unclear whether this category will be
attractive to consumers and what features they may prefer.
Due to the dynamic nature of the industry and changes in
regulatory approval processes, it is likely that industry practices will continue to evolve this machine class with new variants emerging over time. At this stage, casinos may be uncertain of how to market SGMs and where to position them on
the gaming floor. In initial field tests in New Jersey, trialled
SGMs were less popular than expected and casinos removed
the machines as they failed to generate adequate returns [14].

Player Demographics and Risk Factors
Structure and Variants of SGMs
Traditional EGMs incorporate multiple (often simulated) spinning reels that contain varied symbols that are consistent with
the overall game theme. Players bet by selecting the number of
lines and the size of the bet to place on individual reel spins
and win credit if certain patterns of matching symbols are
shown when the spinning stops. EGMs vary extensively by
the theme of the game, size of minimum bet, outcome distribution, and additional features (e.g. free spins, the ability to
bet on in-game random outcomes such as card flips) as well as
local and linked jackpots. Outcomes are determined entirely
by chance using a random number generator set to return
approximately 90% of total wagers to players [13].
In contrast, SGMs offer players some degree of influence
over gambling outcomes by introducing skill elements into
games. This may vary from players being able to influence
the size or multiplier of wins but not the number of wins, to
skill influencing the outcomes for all aspects of game play.
Other ways in which skill may be incorporated is through

SGMs are more likely to attract a younger adult demographic.
Gamblit, an industry manufacturer, reports that a 10,000-person survey they conducted with SGM customers found those
consumers had an average age of 36, compared with the average age of traditional EGM players of 58 [7]. Another SGM
manufacturer, GameCo, reported that after 2.5 years of operation, their customers were, on average, 25 years younger than
the standard EGM player [15]. One possible explanation is
that younger adults prefer gambling games that are more interactive and incorporate components of skill [16].
Additionally, familiarity with the game titles and mechanics
of the non-gambling version of games could play a role in
attracting this demographic [1••]. The attraction of younger
players is important from a risk perspective. Younger adults
are more likely to develop gambling problems, in addition to
other mental health and substance use disorders [17–19]. No
academic studies have examined participation rates in SGMs
using representative samples of gamblers or the general
population.

Curr Addict Rep (2020) 7:229–236
Table 1
Product

Skill-based gaming machine product examples
Game description

Pay structure

Gamblit and
A first-person shooter where players run through a landscape of Higher bet increments give players access to more functional
PikPok’s ‘Into the
zombies. The goal is to dodge or kill zombies and move as
in-game features (e.g. gun ammo, guard dog) and a higher
Dead’
far forward as possible before dying.
pay table. Players win money by completing up to three
missions (e.g. kill 30 zombies).
Gamblit’s ‘Lucky
Similar to a word search puzzle, the goal is to identify and trace Letters from correctly identified words go towards filling
Words’
(using a touch screen) as many words as possible on a 4 × 4
segments of five successively more difficult payout meters.
letter grid within a 30-s time limit.
Win amounts for each of the filled meters are randomly
determined.
Gamblit’s ‘Pacman
Up to four players compete against each other in an arcade
A spinning wheel randomly determines the cash prize amount
Battle Arena’
game of Pacman Battle Royale. The aim is to be the last
at the beginning of the game. Bet size influences the potential
Pacman standing by eating or avoid being eaten by other
payout amount. The last player alive wins the cash prize.
players and game-controlled ghosts.
GameCo’s ‘Nothing An arcade-style basketball shootout game. Players must use
A potential cash or token amount is displayed onscreen
but Net 2’
hand-eye coordination by pressing a button at the appropriate
immediately before each shot. Tokens can be used to access
time. Players catch a simulated on-screen ball to make a bet,
features that provide a player advantage. Players spin a
and then make a shot by stopping a line marker in a bar
progressive jackpot reel if they are able to make 10/15 shots.
meter; they get 15 shots per game.
Gotskill? Skill games Games largely resemble normal EGMs with spinning reels and Payout amounts earned from spinning reels are based on a
various themes (e.g. ‘All American’, ‘Devil’s Hot’, ‘Tropical
random multi-line pay table. Players have an opportunity to
Paradise’). The skill mode is activated when players earn a
increase (or decrease) the win amount by up to 110% in the
winning spin reel combination. In skill mode, the goal is to
skill mode. If they can do this, players can theoretically
stop a fast-moving line marker in the centre point of a bar
achieve a positive RTP%.
meter.
Queen of Virginia
Game play starts with spinning reels revealing a 3 × 3 grid of Similar to an EGM, winning reel combinations are based on a
Skill games
themed symbols. Example game themes include ‘Wild
random multi-line pay table. Each symbol is worth a
Beasts’, ‘Amigos Locos’, and ‘Pirates’. Like a game of
different amount, including bonus and free game symbols.
The manufacturing company claims that highly skilled
tic-tac-toe, within a time limit, players search for two of the
individuals can win every time they play.
same symbols on a horizontal, vertical, or diagonal line, then
touch the appropriate symbol to complete a full line of three.
Scientific Game’s
Triggering the bonus feature on a standard Atari Space Invaders If the skill bonus is selected, player performance during the
‘Space Invaders’
themed EGM allows players to choose between random free
game will determine what level of three progressive jackpots
spins and playing the skilled arcade-style game.
they can win.
Wymac Gaming
After triggering the bonus feature in a reel-based EGM game, In the skill feature, points are earned by killing monsters that
Solution’s
players use a console-like controller to battle waves of
vary in strength and difficulty. Total score at the end of the
‘Fortunes of the
monsters in a third-person medieval fantasy arena. During
timed game determines what level of four progressive
Brave’
normal reel play, a bonus currency is accrued that can be
jackpot amounts is won.
used to customise a player’s avatar within the skill feature.

It is plausible that individuals with existing high levels of
gambling involvement and gambling problems will be among
the first to participate in SGMs. Prior research shows that
individuals with existing gambling problems engage in multiple gambling activities and gravitate to new gambling products [20–24]. Emerging gambling products and modes of access have demonstrated a higher uptake among people with
existing gambling problems. These include Internet gambling
[25], esports betting [21, 26], and daily fantasy sports [27]. A
recent study by Gainsbury and colleagues [28••] found that in
a crowdsourced sample of 232 Mechanical Turk participants,
those with experience playing SGMs reported higher involvement in other gambling types and mobile games, and had
more severe gambling problems (in addition to being younger
and male). Research suggests that personality traits such as
impulsivity and novelty seeking, in addition to the desire for

variety among highly involved gamblers, may explain why
individuals with existing problems are attracted to new gambling variants [20]. In these cases, SGMs may not represent a
causal factor in gambling problems, though they may exacerbate problems [29]. As new cohorts of gamblers engage with
SGMs, it may be possible to delineate the role the games play
in the development of gambling problems.
Findings from Gainsbury et al. [28••] suggest that SGMs
could hold appeal to people who play mobile or video games.
These populations are increasingly being exposed to gambling
activities through the incorporation of gambling themes and
mechanics within games [30], including social casino games
use of gambling mechanics to earn in-game credits or currency, and ‘loot boxes’ (i.e. random in-game prize draws). A
plausible hypothesis is that individuals could ‘migrate’ from
these gaming activities to gambling due to the structural

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similarities and shared commercial brands [31]. Studies have
shown that adolescents and adults who play gambling-themed
games, including social casino games and loot boxes, are
more likely to engage in monetary gambling and experience
gambling problems [31–34]. A similar effect might be expected with adolescents migrating from video or mobile games to
playing SGMs when they reach legal gambling age.

Mechanisms for Potential Harm in SGMs
EGMs are associated with the most gambling-related
harm compared with any other form of gambling. The
Australian Productivity Commission [35] reported that approximately 80% of individuals who access gambling
help services identified EGMs as the cause of most of
their problems. Shared structural characteristics in EGMs
and SGMs may contribute to the development and maintenance of gambling problems. EGM play is characterised
by rapid and continuous betting [36]; outcomes are known
almost immediately after the bet is placed (~ 3.5 s per
spin; [37]), and the random intermittent nature and variable size of payout of EGMs means that players are unaware of the timing or amount of their next win [38].
Payout size and frequency in SGMs is mostly variable
and play is continuous. The skill features allow players
to offset some of the randomness in games and to decelerate or create a natural break from the rapidness of game
trials, but the more complicated game structure of SGMs
may lead to greater immersion. While study of links between game complexity and immersion is limited, multiline slot machines have been found to be more immersive
than simpler single-line games [39–41]. SGMs may be
comparable in some ways to other forms of continuous
skill-based gambling, such as blackjack, poker, or inplay sports betting, but also may lead to immersive states
more similar to video games.
A potential concern about games with skill components
is that players may overestimate the role of skill, eliciting
competitiveness and leading to attempts to chase losses
and ‘beat’ the games [42•]. SGMs appear most likely to
reinforce these cognitive distortions through impacts related to illusions of control, which refers to players’
misplaced beliefs in their control over events that are determined by chance [43]. It is one of several erroneous
gambling-related beliefs characterised by a failure to understand how gambling activities have negative long-run
expected values [44•, 45]. Several experimental studies
have demonstrated that people behave as though chance
outcomes are determined by skill when some element of
competition, familiarity, or choice is introduced into
games. For example, the act of rolling dice or choosing
lottery ticket numbers, as opposed to someone else doing

so, has been shown to increase peoples’ confidence in
achieving a winning outcome [43, 46, 47]. Personal biases
play a key role in this phenomenon as gamblers tend to
attribute their wins to personal skill, whereas losses are
rationalised as the result of some external uncontrollable
event [48]. Stronger illusions of control have been found
in problem gamblers compared with healthy controls
which suggests they may be etiologically linked to problem gambling [49]. The important role of cognitive distortions in the development and maintenance of problem
gambling is emphasised in key conceptual models of
gambling addiction [50–52] and in the treatment of gambling disorders [53].
SGM products introduce an explicit skill component into
the game structure of traditional EGMs, which may further
reinforce illusions of control in players. Lending support to
this proposition, Gainsbury et al. [28••] found that SGM
players reported higher levels of erroneous gambling cognitions (including illusions of control) compared with non-SGM
players. Those individuals were also less knowledgeable
about the respective roles of skill and chance in SGMs and
EGMs, even though self-belief in their level of knowledge
was higher.
Player skill typically has a sufficiently small impact that
even highly skilled players will lose over the long run.
Confounding the issue are less typical SGM variants where
a very small proportion of highly skilled players could theoretically win consistently (e.g. Gotskill? Skill games and
Queen of Virginia skill games [see Table 1]). The variation
within the SGM category may increase player misunderstanding of the relative roles of skill vs. chance and the extent to
which it is possible to turn a profit if they possess relevant
knowledge or skills.
It is conceivable that individuals involved in video or
mobile gaming will inaccurately attribute a high role of
skill to SGMs. The use of familiar game titles, console
game-style controllers, and an equivalent level of graphics
may have a compounding effect on this illusion of control. While practice and persistence enhance gaming skill
and expected outcomes, skill has a smaller role in determining SGM outcomes than typical video games, and ongoing play can be costly. In an experimental study involving a gambling task with video-game-like features, King
et al. [54•] found that participants who regularly played
video games and gambled exhibited greater illusions of
control compared with participants that only did one or
the other activity. In an Australian survey, social casino
game players who gambled as a result of these games
were significantly more likely to report that they played
the games and gambled to improve their gambling skills
[31]. These findings suggest that individuals who game
and gamble may be vulnerable to erroneous beliefs that
gaming experience will help them to win on SGMs.

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Potential Protective Features of SGMs
Certain features of SGMs may protect players from gamblingrelated harms, especially when compared directly with traditional EGMs. Skill game elements can slow down the speed of
the game and betting by extending individual bets across approximately 30 to 60 s of play. This creates a longer duration
between outcomes of game trials. Individuals may also receive a break-in-play when multiplayer variants require
players to wait for others to join the game. Breaks in play
theoretically provide an opportunity for gamblers to make an
informed choice to continue to gamble, and there is some
evidence that these may reduce continuous gambling [55].
In contrast, the capacity to play rapidly on EGMs is associated
with a higher frequency of wagers over prolonged periods and
difficulty stopping, particularly among problem gamblers
[37]. Therefore, the naturally occurring breaks in SGMs and
fewer betting options may reduce excessive gambling within a
single session and the negative impact of high financial
expenditure.
SGMs are expected to promote social interaction, especially in multiplayer machines and via spectator-like behaviour
from other casino patrons. This may serve as a protective
factor because problematic gambling has been associated with
gambling alone and in secret [56, 57], and social bonding is a
protective factor for problem gambling [58].
Compared with repetitious and non-cognitively demanding
EGM reel spins, SGMs likely involve greater cognitive engagement given higher levels of game interaction. Players
may therefore be less likely to ‘zone out’ and lose track of
the time and money they spend [59]. However, greater absorption in SGMs related to achievement-driven motivation may
still result in spending more time and money than intended.
Experimental evidence has shown links between intense immersion (i.e. ‘zoning in’) during EGM play and risk of problem gambling [60, 61].

Strategies for Consumer Protection
Informed decision-making is believed to be an important feature of responsible gambling by individuals [62, 63]. Health
promotion campaigns aimed at the general public may wish to
focus on the intrinsic value of SGMs as an entertainment
product to be enjoyed in moderation, emphasising the social
aspects of play. It appears reasonable that SGM marketing
communications should emphasise that they are a gambling
product not a video game, cannot be mastered or beaten, and
should not be perceived as a way to make money.
To minimise the risk of existing players developing problems, it may be important to provide clear information on how
each machine operates in terms of RTP% and the role of skill.
This needs to be done in a manner that is easy to understand by

players, potentially involving a graphical display [64]. Built-in
game tutorials can explain the important elements of the machine, without the need to place a wager. Due to the varying
elements in game design, player education may need to be
game-specific, targeting illusions of control with the intention
to prevent persistent play and excessive spending. On-device
messaging may therefore be an important intervention. In
EGMs, dynamic pop-up messages have been shown to reduce
irrational beliefs about gambling [65] and are most effective
when placed in centre-screen during play [66]. Computer animations and graphs can facilitate communication of complex
abstract ideas in a general entertainment setting [67].
Product variation within the category of SGMs, including
differing degrees of skill involved, presents a challenge for
educating players using consistent messages. For example, a
message that “all players will lose in the long run” may be true
for traditional EGMs but does not hold for all SGMs.
Credibility of an educational campaign may be reduced if
players become aware of misleading message content; therefore, messages should be matched appropriately to individual
games or game types. During gameplay, it may be important
for individual SGMs to clearly signpost when outcomes are
influenced by skill and when chance dominates. Finally, as
players are likely to conflate SGMs with EGMs, educational
strategies should extend to both activities, with the aim to
clearly distinguish the features of one from the other.
Clinically, one aspect of cognitive behavioral therapy
(CBT)—the recommended treatment approach for gambling
problems [68]—is to replace erroneous gambling cognitions
with more accurate beliefs. Many CBT programs are geared
towards purely chance-based EGM gambling; therefore, cognitive restructuring techniques may need to be adapted for
treatment of problems with SGMs [53]. As stated in
Chrétien et al. [53], ‘the thoughts of gamblers that participate
in gambling activities that involve some skills would forcibly
be different from the thoughts of gamblers that choose games
of pure chance’ (p. 109). Clinicians may therefore need to be
upskilled so that they are knowledgeable about the structural
characteristics of SGMs, the specific types of cognitive distortions they elicit, and how to effectively address these
differences.

Conclusions and Future Directions
The availability of SGMs is growing rapidly. These machines
are expanding into multiple US jurisdictions and several other
countries are considering regulatory approval. While the longrun take-up and engagement with SGMs is unclear, the limited
empirical evidence suggests that they appeal more strongly
with the intended younger adult demographic that may already be involved in non-gambling video gaming. This increases risk to consumers as the target market for SGMs is

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known to be more susceptible to gambling problems compared with older demographics [17–19].
Lack of knowledge about impacts of SGMs on problem
gambling prevents the development of an informed regulatory
framework to license EGMs that contain elements of skill. It is
plausible that SGM players may be at greater risk of developing illusions of control than traditional EGM players, due to
the injection of some skill into an otherwise chance-based
game structure. Player education techniques targeting cognitive distortions, accompanied by account management tools
that include limit-setting options, may be a positive initial
strategy for consumer protection.
To support evidence-based regulatory decisions, it is essential that studies are conducted based on samples of SGM
players in order to understand their unique personal characteristics, attitudes, and motivations. We suggest several key research priorities for future studies: (1) characteristics of individuals attracted to these games and their unique risk profiles;
(2) players’ understanding of skill versus chance features of
SGMs; (3) effects of play on increasing cognitive distortions;
(4) effect of SGMs on gambling including persistence within a
gambling session, chasing losses, initiating new gambling sessions, dissociation/immersion, and impact on use of other
gambling products; and (5) the effectiveness of consumer protection measures in preventing or reducing gambling harm.
Beyond these priorities, there remains substantial opportunity
to study SGMs, including exploration of the diverse structural
characteristics in the games and examining etiological links of
SGMs to other forms of gaming and gambling.

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