Skill Games Focus: Why Online Skill-Based Gaming Is Not Gambling

The debate over what we commonly define as a skill game has reached a new level. At the Global Gaming Expo on September 28, industry leaders gathered to discuss the future of online skill gaming in 2026. It quickly became clear that the industry is struggling with a massive image problem and outdated legal frameworks. While many people associate skill games with physical devices in bars that look almost identical to slot machines, the world of digital skill games is entirely different. It is no longer about chance, but about strategic depth and the user's actual control over the gameplay.

The distinction from classic gambling is the decisive sticking point. Providers like THNDR or Topdog are actively trying to free their products from the stigma of pure gambling. The focus is primarily on the technology in the background. While algorithms decide on wins and losses in online casinos, the human factor is intended to predominate in skill gaming. This is not just a philosophical question, but a deeply legal one that determines licenses, taxes, and access to app stores. The industry is growing rapidly, but regulatory authorities often lag decades behind as they try to evaluate modern apps with laws originally written against post-war organized crime.

Numbers and facts

The discussion centered on various approaches to defining skill. Desirée Dickerson, CEO of THNDR, explained that her games are developed for third-party providers such as sports betting sites and lotteries. She defines skill as games whose outcome is determined by factors within the player's control. Justin Narang, Co-CEO of Topdog, emphasized that his company focuses on real-time sports games like football and basketball that do not use a random number generator (RNG). A special focus is on the learning curve. Narang criticized the unfair practice of some companies that pit highly skilled bots against real players, which distorts fair competition.

Another problem is the lack of a uniform definition. For example, THNDR does not offer card games in Arizona, instead relying on derivatives of Sudoku or Tetris to circumvent legal hurdles. The issue of youth protection also plays a major role. Dave Rebuck, former Director of the New Jersey Division of Gaming Enforcement, warned that children's arcades today could look almost like casinos. He emphasized the need to educate consumers about what they are engaging in to avoid social harm.

"Most of the state and tribal regulators are trying to determine, 'Is it a gambling game?' We're kind of stuck in these old definitions [crafted in the 1950s and 1960s]." - Dave Rebuck, Former Director of the New Jersey Division of Gaming Enforcement

Background

The legal classification of games in many countries, particularly the US, is based on three different tests: the Predominant Factor Test (does skill predominate by more than 50 percent?), the Material Element Test (does chance play a significant role?), and the strict Any Chance Test (does any chance lead to a classification as gambling?). Since many online games contain elements like random item drops or dynamic spawn points, they quickly come under fire. To avoid these conflicts, game manufacturers are now working with the International Gaming Standards Association to develop their own industry protocols. The aim is not to look for loopholes, but to proactively ask for permission instead of having to ask for forgiveness later.

Why it matters for German players

For German players, the distinction between skill games and gambling is of enormous importance due to the Interstate Treaty on Gambling 2021 (GlüStV 2021). In Germany, online slots are subject to strict rules, such as the 1 Euro stake limit per game and the monthly deposit limit of 1,000 Euro, monitored via the LUGAS IT system. Real skill games, where chance plays no or only an absolutely subordinate role, theoretically do not fall under these strict restrictions. However, the line is thin. As soon as a provider promises winnings for a fee and chance does play a role, German regulation by the Gemeinsame Glücksspielbehörde der Länder (GGL) takes effect. German users should therefore always check whether a provider is on the official GGL whitelist if the game even remotely resembles gambling. A "skilled slot," as described by THNDR, would likely be scrutinized very critically in Germany, as the appearance already suggests proximity to the regulated market.

What it means for GGL-licensed casinos

For licensed German online casinos, skill elements could be an opportunity to make the offer more attractive without violating player protection requirements. However, the GGL is often cautious about innovations. Casinos must ensure that hybrid forms do not lead to bypassing the strict requirements for the random number generator or the transparency of winning chances. While the US debate shows that developers want to move away from RNG, this remains the basis for the certification of slots in Germany. Foregoing the RNG while simultaneously maintaining a slot look could lead to regulatory complications in Germany rather than exemption from requirements.