Are skill game tournaments gambling?

Question

We consider whether a skill-based online multiplayer game with some entry fees to a tournament and prizes for winner and sub-winners (consists of entry fees) is in US and EU law classified as a gambling/hazard game.

The game is not based on random (e.g. like bingo) and it is not a card game (like poker). The game's meaning is to be as skill-based as possible.

Of course, it depends on the application of legislation in each country, however, we would like to find a uniformly applicable model or any clear regulations that could be applied.

Most regulations seem to be very vague by definition and we fear of possible sanctions.

Is available any global resource that describes / monitors this problem across the world (or in US and EU at least)?

Answer 1

In the U.S. this will be dependant on State Gambling Laws, but typically it would only be illegal if the money was taken for a private Lottery (legally speaking, only the government is permitted to run lotteries, and the specific nature of a lottery is a game where a prize of monetary value is awarded to a participant by a mechanism of random chance). Typically, skill based games are not Lotteries as the prize is determined by a non-random selection based on some metric of judgement (skills, though subjectively judged contests, like a Beauty Pageant or Body Builder competition can occur.).

E-sports tournaments are typically Skill based rather than random chance, and thus permitted. Typically, the recent problem with many E-Sports is that the games themselves use Lockboxes as a form of micro-transactions to fund the game's development and sustainable and the mechanics of Lockboxes are sufficiently random that it might qualify as a lottery if the possible prizes could be considered items of value.

Answer 2

Gambling requires a wager

something (such as a sum of money) risked on an uncertain event

An entry fee paid to participate in an event is not a wager even if the event offers prizes.

Note that a wager on the outcome of the event or matches within an event by non-participants is gambling. And side bets by participants are usually strictly prohibited because of the risk of cheating.

For example, consider horse racing (or any other sport); the participants (owners/trainers/jockeys/horses) pay an entry feat to compete for the prize money - this isn’t gambling. Others can bet on the outcome- this is gambling.