New Jersey Issues Rules for Skill Gaming

The New Jersey Division of Gaming Enforcement has posted temporary regulations to govern the manufacture and sale of skill-based gaming devices to the eight casinos of Atlantic City.

New Jersey and Nevada are leading in providing for slot machines with payback percentages that vary according to the skill of the player. It is part of a push, supported by the American Gaming Association, to draw new players into the industry from the vast millennial generation, which is larger than the baby-boom generation now dominant in the industry.

Millennials like competition and social interaction, and have shown no interest in the traditional slot machines that now dominate casino floors. Manufacturers and operators have been trying to determine how to offer games similar to the smartphone games like “Candy Crush,” competitive video games and arcade-game experiences to which the younger generation is drawn.

Member suppliers of the Association of Gaming Equipment Manufacturers have been working with regulators in both states to determine what form skill games should take.

Under the New Jersey regulations announced last month, casinos and manufacturers will be required to prominently display messages informing players that the outcome of their wagers can be influenced by their physical or mental skills, rather than the pure chance of traditional slot machines.

The rules also maintain the 83 percent minimum return-to-player requirement of current New Jersey law—regardless of the skill of the player. Games under this category will offer a theoretical RTP percentage based on chance, and a maximum payback percentage based on the capabilities of the most skilled players. The rules also prohibit casinos from making the games harder or easier to win while a game is in progress, based on the perceived skill of the player.

Other rules include monitoring programs to guard against collusion or money laundering in multi-player peer-to-peer games.

“This is another important step towards implementing skill-based gaming in the Atlantic City gaming market,” said DGE Director David Rebuck. “Although the division has had the authority to authorize these games for some time and announced in October 2014 an initiative for manufacturers to bring their skill-based games to New Jersey, the industry requested specific regulations to guide their efforts to create innovative skill-based products.”

The New Jersey skill rules mirror those adopted last fall by Nevada regulatory authorities, so skill games are likely to be approved in both jurisdictions simultaneously.

However, companies that bring their skill-based products to New Jersey before any other jurisdiction will have the additional advantage of the “New Jersey First” law, which provides that gaming products submitted first in the state or simultaneously with other states will be tested, approved and available fore placement within 14 days.

“While the division does not currently have any skill-based products in its Technical Services Lab, we are in discussions regarding several products, and hope the clarity provided by these regulations will bring even more submissions in this cutting-edge area that converges traditional casino gaming with the skill-based gaming so popular with millennials,” said Rebuck.