Measuring Skill in Games with Random Payoffs: Evaluating Legality

Games, such as carnival or electronic/video games, may award prizes in some U.S. states only if the game's outcome depends sufficiently on skill. Otherwise, the game is classified as a gambling device and therefore illegal in most jurisdictions and states. This paper offers a practical methodology to determine what percentage of a game's payoff deviation can be attributed to skill. This measure of skill is designed to apply to a new class of games that have come to market in which a player in given a task, with no hidden elements, to complete. For completing this task, a random prize is awarded.