6 Objective Principles that Differentiate between Games of Skill and Games of Chance
The rise of skill-based Real Money Games (RMG) has revolutionized India’s online gaming sector, contributing significantly to the digital economy. In 2023, the sector recorded revenues exceeding INR 16,500 crore, becoming the largest contributor to the Indian online gaming market. However, despite its tremendous growth and potential, skill-based gaming often gets unfairly confused with gambling. This misunderstanding raises challenges in regulation and perception. Fundamentally, gambling involves staking something of value on uncertain outcomes, relying solely on luck, whereas skill-based RMGs rely on a player’s expertise, making them both legal and distinct.
To provide a clear distinction, we have developed a comprehensive framework that provides statistical principles to identify games of skill. This framework is based on six critical user behaviors, each of which highlights the distinction between games of skill and games of chance:
High Skill Prevails Over Low Skill. In skill-based games, players with greater experience and expertise consistently outperform beginners or less-skilled participants. For instance, in a game like Chess or in Zupee Ludo, a seasoned player has a higher likelihood to defeat a novice because the outcome depends on strategic decision-making and foresight, not chance. This contrasts with gambling, where even an unskilled player can win as the game depends on sheer luck.
Free Will Impacts Outcomes. Skill-based games allow players to exercise their decisions to influence outcomes, including the ability to intentionally lose. For example, a player can deliberately make suboptimal moves to lose a match. This autonomy in decision-making demonstrates that outcomes are determined by players choices and skill, unlike games of chance where luck is the sole determinant.
Skill level correlates with Player Winning Percentages. In games of skill, winning percentages are directly proportional to the player’s ability and expertise. As players improve their strategies or sharpen their knowledge, their likelihood of success increases. In contrast, games of chance, such as a roulette wheel, show no such correlation, as the outcomes remain random regardless of player involvement.
Performance Improves With Practice. A hallmark of skill-based games is that players get better over time through consistent practice and learning. For example, in trivia-based games, players develop faster recall and more accurate answers as they play more. This contrasts with gambling, where repeated play does not increase the odds of success since the outcomes are entirely random.
Consistency Post-Learning Curve. Skill-based games exhibit a predictable and consistent pattern of success for players who have surpassed the learning curve. Once a player understands the mechanics and strategies, they are able to perform reliably in subsequent games. Gambling lacks this feature since even experienced players cannot predict outcomes with certainty.
Exceptional Win Percentages are unachievable in Games of Chance. The win rates seen in skill-based games for exceptional players are virtually impossible to replicate in games of chance. For instance, a highly skilled player in Zupee Ludo can maintain a high win rate due to their ability to read the game and make strategic decisions, while in a game like slot machines, high win rates are impossible as the outcomes are entirely random.
These factors differentiate games of skill from games of chance. As a category creator and industry leader, Zupee has spearheaded research to objectively distinguish between the two, becoming the first company ever in India to implement globally recognized testing methodologies to validate the skill factor of its games.
All the games on Zupee are rigorously tested on real game data and in a simulated environment using the six objective principles outlined above. These tests ensure that every game complies with global standards and emphasizes skill as the primary determinant of success. By setting this precedent, Zupee is fostering trust and innovation in the gaming industry, enabling the ecosystem to grow responsibly while safeguarding player interests.
