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Company takes state to court over arcade-style game

['Clark Kauffman', 'More From Author', '- September']

Date: 2021-09-01 00:00:00


At what point does an arcade game become a gambling device that is subject to state regulation?

That’s the question raised in a new lawsuit brought by the Trestle Corp. against the Iowa Department of Inspections and Appeals. The company wants a judge to review and reverse a departmental finding that its arcade-style “Game of Skill” is actually a game of chance and therefore a state-regulated gambling device.

In February, Trestle filed a petition with DIA, seeking a declaratory order that its Game of Skill, which is sold to bars and restaurants for their customers to play, is a game of skill that shouldn’t be treated as a gambling device.

In May, company officials demonstrated the game for department officials and argued its game is nothing more than an amusement device, with the outcome primarily determined by the skill or knowledge of the operator.

The device offers different “game themes,” such as “The Duck Game” and “Bug Crazy,” that a player can select on a touch-screen display. Players insert their money into the device and can potentially win “credits” they can either use for additional game play or redeem for merchandise.

Both games are what are called “nudge games.” For example, the Duck Game presents the player with five spinning reels, similar to a slot machine, with each reel presenting different symbols to the player. As with a slot machine, a “win” is achieved when the reels stop and display the same symbols.

Although a player may select the “stop” button to manually stop the reels, the reels will always stop in a predetermined fashion. Pushing the “stop” button at any particular time doesn’t affect the combination of symbols that is displayed once the reels stop.

A player can sometimes “nudge” one of the wheels to create a winning combination of aligned symbols. According to Trestle, this is the point at which skill, rather than chance, comes into play: Once a winning combination of symbols is displayed, a player is then shown a circular meter, similar to a speedometer, with an arrow indicator that traverses at a consistent speed. The meter shows various percentages, from 55% to 110%, that modify the prize amount awarded during the spinning-reel phase of the game. The player can hit the “stop” button to halt the arrow’s movement and determine the actual prize amount, and unlike the spinning-reel phase of the game, the player’s timing does affect the percentage selected.

DIA ruled in July that the device was a game of chance, and not a game of skill.

According to the agency, the device’s randomized ordering and value of the games determined which players are awarded a prize at the conclusion of play. “Unless a player is fortuitous enough to encounter positive-value prize screens during play of the game, player skill or knowledge is relegated to, at best, a secondary role in producing a successful outcome,” the agency’s director, Larry Johnson Jr., ruled.

Matthew Phillips, one of the founders of Trestle Corp., testified last summer at a hearing in the District of Columbia. He claimed the game eliminated the element of chance which meant that, at least in theory, it might not make any money for the owners and could actually lose money.

“With the player having to physically select symbols and also physically use a timing mechanism button, too, that is really based on skill,” Phillips said. “The player has more interaction with the game as opposed to just a slot machine, if you will, that you might see in casinos in Maryland, where they just press a button and sit there, you know, slouching in a chair.

“It provides a form of entertainment that’s engaging to the patrons, especially for establishments that, you know, that serve liquor. And it keeps the players, you know, in the establishment having fun and enjoying themselves – as opposed to just going in, having a couple of beers and then just leaving for the night.”

A hearing date has yet to be scheduled in the Iowa case, and DIA has not yet filed a response to the lawsuit. A similar lawsuit was filed last year by a different company challenging DIA’s definition of a gambling device.

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