Regulators and industry experts are taking the issue of unregulated skill games seriously and urge legislators to do the same. At the summer meeting of the National Council of Legislators from Gaming States (NCLGS) in Pittsburgh, a panel discussed the spread of unregulated skill games across several states and emphasized the need for decisive government action.
Oklahoma state Representative Chris Kannady moderated the panel, which included:
Anthony Gaud, co-CEO, Gaud-Hammer Gaming Group (G3);
Matt Hortenstine, general counsel, J&J Ventures;
Jeff Morris, vice-president of public affairs, Penn Entertainment;
Kurt Steinkamp, chief of staff of the Michigan Gaming Control Board;
Eric Weiss, managing director, North America for compliance solutions provider IC360;
Michael Pollock, senior policy adviser for Spectrum Gaming Group.
The Proliferation Challenge
Hortenstine and Weiss highlighted the sheer number of existing skill games, making it challenging to eliminate them completely. Weiss compared efforts in some states, including Pennsylvania, to a game of ‘Whack-a-Mole’, where shutting down one location leads to another popping up. In Pennsylvania, machines seized by police are often returned to owners after court rulings favor skill-game providers.
Legislative and Regulatory Cooperation
Michigan’s Steinkamp suggested that state legislators work closely with regulators to understand the risks of unregulated gaming and share their insights to shape policy effectively. Pollock, who has testified as an expert witness in skill-game court cases, argued that these games should be shut down entirely. He emphasized that obtaining a gaming license has always required manufacturers and operators to prove their integrity through rigorous scrutiny, a process bypassed by skill-game operators.
Financial Impact on Licensed Casinos
Pollock compared the idea of regulating and taxing skill games to licensing illegal casinos in new jurisdictions, a practice seen in Ontario where grey-market operators were offered licenses when the regulated market launched in April 2022. Penn’s Morris pointed out that skill-game manufacturers have disregarded existing rules and have not proven their integrity. Licensed operators are losing millions in potential revenue to these games, and states are missing out on tax revenue.
A Call for a Level Playing Field
All panelists agreed on the need for a level playing field if skill games are to be regulated and taxed. These games must be subject to the same scrutiny, player protections, responsible gaming safeguards, and tax rates as casino slot machines. Additionally, their numbers and locations should be restricted, and they should not be allowed in places where they cannot be monitored.
GaudHammer Gaming Group Leading the Way
Anthony Gaud discussed how grey-market operators profit without implementing Know Your Customer (KYC) protocols, user protections, or algorithm fairness disclosures. This lack of regulation results in significant risks for consumers. In contrast, Gaud highlighted how GaudHammer Gaming Group is leading the way in developing regulated games of chance and real money video games, ensuring transparency, fairness, and player protection.
The Genie Can Be Put Back in the Bottle
Contrary to the belief that "we can’t put the toothpaste back in the tube," the panelists stressed that with serious legislative and regulatory action, the proliferation of unregulated skill games can be controlled. Measures such as stringent regulations, proper licensing, and limited locations can prevent the unchecked spread of these games, protecting both the industry and consumers
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