How did the 2002 South Carolina AG distinguish a video game of skill from an illegal game of chance?

Plain-English summary

A legislator asked how to tell whether a machine was an illegal game of chance and whether a game of skill could award merchandise. In August 2002, an Assistant Attorney General favored the “dominant factor” test: the key was whether chance or player skill controlled the outcome. The opinion stressed that South Carolina's Supreme Court had not expressly adopted that test. A particular machine's status still required investigation by law enforcement and, ultimately, a court fact finder.

The letter treated gambling as involving consideration, chance and a prize. It said substituting merchandise for cash did not cure a paid game dominated by chance. Conversely, it cited an earlier AG view that an entry fee and prizes for a genuine game of skill, such as golf, did not violate the lottery law. It cautioned that a skill-based activity could still be implemented in a way where chance dominated prize results, and that wagering on a skill contest remained unlawful.

Currency note

This opinion was issued in 2002. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did a small amount of skill automatically make a video game lawful? A: No. The AG focused on which factor actually determined the result.

Q: Did awarding merchandise instead of cash avoid the gambling analysis? A: No. The opinion said either could be a prize when payment and chance were also present.

Q: Had South Carolina's Supreme Court formally adopted the dominant-factor test? A: The letter said it had not expressly done so; the AG drew support from a dissent and other jurisdictions.

Background and statutory framework

The letter interpreted Section 12-21-2710's prohibition of specified machines and devices pertaining to games of chance. It discussed the dissent in Johnson v. Collins Entertainment Co. Inc. and State v. Stroupe on whether chance or skill dominates. It listed manual dexterity, judgment, and actual control over outcomes as relevant considerations, but warned that software-driven icons could create only an appearance of skill.

Citations and references

• Section 12-21-2710: prohibited gaming devices.
• Johnson v. Collins Entertainment Co. Inc.: dissent discussing dominant factor.
• State v. Stroupe: cited out-of-state formulation of the test.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/august-28-2002/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/04/02aug-28-harrison.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLES M. CONDON
ATIORNEY GENERAL

August 28, 2002

The Honorable James H. Harrison
Chairman, Judiciary Committee
South Carolina House of Representatives
P.O. Box 11867
Columbia, South Carolina 29211
Re:

Your Letter of July 30, 2002
Criteria for Games of Chance Pursuant to S.C. Code Ann. §12-21-2710

Dear Representative Harrison:
In your above-referenced letter, you ask this Office to" ... issue an opinion that would provide the criteria for determining if a machine was an illegal game of chance as prohibited under S.C. Code Ann.§ 12-21-2710. You also request that this Office" ... address the issue of the legality of awarding merchandise to a contestant or player if a machine is determined to be a game of skill versus a game of chance." i

LAW/ANALYSIS

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Criteria for Determinine Games of Chance
Section 12-21-2710 provides in pertinent part as follows:

It is unlawful for any person to keep on his premises or operate or permit to be kept on his premises or operated within this State any vending or slot machine, or any video game machine with a free play feature operated by a slot in which is deposited a coin or thing of value, or other device operated by a slot in which is deposited a coin or thing of value for the play of poker, blackjack, keno, lotto, bingo, or craps, or any machine or device licensed pursuant to Section 12-21-2720 and used for gambling or any punch board, pull board, or other device pertaining to games of chance of whatever name or kind, including those machines, boards, or other devices that display different pictures, words, or symbols, at different plays or different numbers, whether in words or figures or, which deposit tokens or coins at regular intervals or in varying numbers to the player or in the machine, but the provisions of this section do not extend to coin-operated nonpayout pin tables, in-line pin games,
~

REMBERT C. DENNIS BUILDING

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POST OFFICE Box 11549

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COLUMBIA, S.C. 29211-1549

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TELEPHONE: 803-734-3970

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FACSIMILE: 803-253-6283

The Honorable James H. Harrison
Page 2
August 28, 2002

or to automatic weighing, measuring, musical, and vending machines which are
constructed as to give a certain uniform and fair return in value for each coin
deposited and in which there is no element of chance (Emphasis added).
The statute makes illegal the mere possession of certain machines and devices regardless of their use
or intended use. See State v. 192 Coin-Operated Video Game Machines, 338 S.C. 176, 525 S.E.2d
872 (2000); Squires v. South Carolina Law Enforcement Division, 249 S.C. 609, 155 S.E.2d 859
(1967); State v. Appley, 207 S.C. 284, 35 S.E.2d 835 (1945). Machines and devices that fall within
the proscriptions of§ 12-21-2710 are therefore considered contraband per se. State v. 192 CoinOperated Video Game Machines, supra. While the statute specifically mentions such machines and
devices as "slot machines" and "punch boards," it also outlaws any "other device pertaining to games
of chance of whatever name or kind ..." A game of chance is simply a "game in which chance rather
than skill determines the outcome." See Black's Law Dictionary. It is the opinion of this Office as
well as a majority of jurisdictions in the United States that the "Dominant Factor" test is the
appropriate test to determine whether a game is a game of chance. (Numerous state and federal
citations included in endnote 1). That is, a game is a game of chance when chance predominates
over skill in determining the results of the game. See OPS. ATTY. GEN. DATED AUGUST 2, 2001,
SEPTEMBER 5, 1995, DECEMBER 5, 1978.
While our Supreme Court has not expressly adopted the Dominant Factor test, the dissent
in Johnson v. Collins Entertainment Co. Inc., 333 S.C. 96, 508 S.E.2d 575 (1998), gives an
indication that such would likely be the case ifthe question was ever specifically presented. In his
dissenting opinion, Justice Burnett, joined by now Chief Justice Toal, opined that " ... where the
dominant factor in a participant's success or failure in a particular scheme is beyond his control, the
scheme is a [game of chance], even though the participant exercises some degree of skill or
judgment. If a participant's skill does not govern the result of the game, the scheme contains the
requisite chance necessary to constitute a [game of chance]. On the other hand, if through the
exercise of skill or judgment a participant can determine the outcome, the scheme is not a [game of
chance]." 508 S.E.2d at 584, 585. Justice Burnett noted that his" ... opinion is supported by the
majority of jurisdictions which have considered this question." Id. 1
Courts considering whether elements of skill are involved in the playing of a game have
looked to the game's requirement that the player exercise such things as manual dexterity, eye-hand
coordination, reflexes, muscular control, and concentration. See U.S. v. 294 Various Gambling
Devices, 718 F.Supp. 1236 (W.D.Pa.,1989); and Wnek Vending & Amusements Co., Inc. v. City
of Buffalo, 434 N.Y.S.2d 608 (N.Y. 1980) (overruled on other grounds). Stated another way,
judgment, practice, or adroitness are elements to consider in such an evaluation. State v. Stroupe,
76 S.E.2d 313 (1953). Intellectual abilities have also been viewed by courts as important elements
in determining whether the outcome of a game is dominated by skill. For example, in In Re Allen,
377 P.2d 280 (Cal. 1962.), the California court held bridge to be a game of skill given the fact that
prevailing requires deductive analysis, psychology, alertness and mental superiority.

The Honorable James H. Harrison
Page 3
August 28, 2002

I

The mere presence of one or more of the above mentioned skills, however, does not mandate
that a particular game will be designated a game of skill rather than a game of chance. As the
Supreme Court of North Carolina stated in State v. Stroupe, 76 S.E.2d 313 (1953), whether a game
" ... is a game of chance or a game of skill is not whether it contains an element of chance or an
element of skill, but which of these is the dominating element that determines the result of the
game ... " The Stroupe Court stated their test alternatively as " ... whether or not the element of chance
is present in such a manner as to thwart the exercise of skill or judgment." Id. at 317. Games have
been determined to be games of chance where " ... the skill of the player may increase the player's
odds of winning but ultimately the player's skill cannot determine the outcome, regardless of the
degree of skill involved." Opinion Of The Justices, 795 So.2d 630(Ala.2001 ). Similarly, it has been
held that the mere fact that a knowledge of the law of probabilities may aid a player in maximizing
his short term winnings does not make a game one of skill where this knowledge has no effect on
the ultimate outcome. Collins Music Co. of North Carolina, Inc. v. North Carolina Alcoholic
Beverage Control Commission, 451 S.E.2d 306 (1994). And, as Justice Burnett stated in his dissent
in Johnson v. Collins, 508 S.E.2d at 587, " ... skill should be defined in terms of the ability to obtain
the desired outcome--a certain [icon, image, etc. ]--rather than the ability of one player to play more
judiciously than another."
Moreover, machines which incorporate into the manner of play the random selection of icons
and images through their programming or software must be viewed skeptically when performing a
skilVchance analysis. It has been held that such machines, producing images by virtue of a computer
program unknown to the player, present only the "illusion of skill." Score Family Fun Center, Inc.
v. County of San Diego, 275 Cal.Rptr. 358 (Cal.App. 1990). Also, machines which have as part of
their programming the ability to control the percentage of times players win (sometimes referred to
as retention ratio or payout ratio) have been viewed as games of chance, despite the existence of
some aspects of skill. See Collins Music Co. of North Carolina, Inc. v. North Carolina Alcoholic
Beverage Control Commission, 451 S.E.2d 306 (1994); and U.S. v. 294 Various Gambling Devices,
718 F.Supp. 1236 (W.D.Pa. 1989).
Awardine Merchandise for Games of Skill
The elements of gambling in South Carolina are consideration, chance and prize. See OPS.
ATTY. GEN. DATEDAPRIL23,2002&JANUARY 8, 2001. Ifthe first two elements, consideration and
chance are present, the awarding of any prize whether it be money or merchandise is illegal. On the
otherhand, this Office has previously opined that the payment of an entry fee and the awarding of
prizes for a game of skill (golf) does not violate this State's lottery laws (lottery defined as
consideration, chance and prize). See OP. ATTY. GEN. DATED MARCH 24, 1986. I am aware of no
changes in our laws which would alter the conclusion of the 1986 opinion. It should be noted,
however, that this Office has also opined that, even though the nature of a particular game may be
skill-based, South Carolina's gambling laws are implicated ifthe application of the game is such that
the outcome and awarding of prizes is dominated by chance. See OP. ATTY. GEN. DATED
SEPTEMBER 5, 1995 (even though golf is a game of skill, hole-in-one contest is chance). Of course,

The Honorable James H. Harrison
Page 4
August 28, 2002

placing a wager on the outcome of any skill-based activity is illegal (i.e. betting on the outcome of
a sporting event).
CONCLUSION
It is the opinion of this Office that the appropriate test to apply when determining whether
a game is a game of chance or a game of skill is the Dominant Factor test. The question of whether
any particular machine or device is an illegal game of chance must be determined initially by law
enforcement and ultimately by the fact finder in a court of law. Further, a violation of this State's
gambling laws occurs when the elements of consideration, chance and prize are present. If one of
the elements is completely removed from the equation, the gambling laws do not appear to be
implicated.

This letter is an informal opinion only. It has been written by a designated Assistant Attorney
General and represents the position of the undersigned attorney as to the specific question asked.
It has not, however, been personally scrutinized by the Attorney General and not officially published
in the manner of a formal opinion.

David K. Avant
Assistant Attorney General
DKA/an

I

1. United States v. Marder, 48 F.3d 564, 569 (1st Cir.), cert. denied, 514 U.S. 1056, 115 S.Ct. 1441,
   131L.Ed.2d320 (1995) (Under Massachusetts law, "[C]hance must predominate over skill in the
   results of the game, or the element of chance must be present in such a manner as to thwart the
   exercise of skill or judgment in a game."); Johnson v. Phinney, 218 F.2d 303, 306 (5th Cir.1955)
   ("With respect to the element of chance, the authorities are in general agreement that if such element
   is present and predominates in the determination of a winner, the fact that players may exercise
   varying degrees of skill is immaterial; and the game or device is a lottery."); National Football
   League v. Governor, supra at 1385 ("I conclude that the legislative interpretation of the term lottery
   together with the weight of authority in other jurisdictions would persuade the Delaware Supreme
   Court that 'lottery' should be interpreted to encompass not only games of pure chance but also games
   in which chance is the dominant determining factor."); Morrow v. State, supra at 129 ("We agree
   that the sounder approach is to determine the character of the scheme under the dominant factor
   rule."); State ex Inf. McKittrick v. Globe- Democrat Pub. Co., supra, at 713 ("[A] contest may be
   a lottery even though skill, judgment, or research enter thereinto in some degree, if chance in a larger
   degree determine[s] the result."); People v. Settles, 29 Cal.App.2d Supp. 781, 78 P.2d 274, 277

The Honorable James H. Harrison
Page 5
August 28, 2002

I

(Cal.App.Dep't Super. Co.1938) ("The test of the character of a game or scheme as one of chance
or skill is which of these factors is dominant in determining the result."); Finster v. Keller, 18
Cal.App.3d 836, 96 Cal.Rptr. 241 (Cal.Ct.App.1971 ); In re Interrogatories, supra at 598 ("Article
XVIII, Section 2 [of the Colorado Constitution] is violated if chance is the controlling factor in the
award."); Tinderv. Music Operating, Inc., 237 Ind. 33, 142 N.E.2d 610, 614 (lnd.1957) ("Ina lottery
the winning of a prize is dependent primarily, if not solely, upon chance. In none of said cases was
the prize dependent upon the skill or manipulation of the player. This is a significant factor not
contemplated in a lottery."); Commonwealth v. Lake, 317 Mass. 264, 57 N .E.2d 923, 925
(Mass.1944.) ("[A] game is now considered a lottery ifthe element of chance predominates and not
a lottery ifthe element of skill predominates."); State v. Hahn, 105 Mont. 270, 72 P.2d 459, 461
(Mont.1937), overruled on other grds. State v. Bosch, 125 Mont. 566, 242 P.2d 477 (Mont.1952)
("The test of the character of the game is not whether it contains an element of chance or an element
of skill, but which is the dominating element that determines the result of the game."); State v.
Steever, 103 N.J.Super. 149, 246 A.2d 743 (N.J.Super.Ct.App.Div.1968) (football pool was lottery
because it involved substantial element of chance); Hoff v. Daily Graphic, Inc., 132 Misc. 597, 230
N.Y.S. 360, 363 (N.Y.Sup.Ct.1928) ("The test of the character of the game is not whether it contains
an element of chance or an element of skill, but which is the dominating element that determines the
result of the game."); State v. Stroupe, 238 N.C. 34, 76 S.E.2d 313, 317 (N.C.1953) ("[T]he test of
the character of [the game] ... is not whether it contains an element of chance or an element of skill,
but which of these is the dominating element that determines the result of the game .... "); Stevens v.
Cincinnati Times-Star Co., 72 Ohio St. 112, 73 N.E. 1058, 1061 (Ohio 1905) ("[I]f the dominating,
determining element is one of chance, that element gives character to the whole scheme.");
Commonwealth v. Laniewski, 173 Pa.Super. 245, 98 A.2d 215, 217 (Pa.Super.Ct.1953) ("It is
sufficient that chance be the dominant factor."); Roberts v. Communications Investment Club of
Woonsocket, supra at 1211 ("In deciding whether the element of chance is present, we adopt, as have
most jurisdictions which have faced this issue, the 'dominant factor' doctrine, under which a scheme
constitutes a lottery when an element of chance dominates the distribution of prizes, even though
such a distribution is affected to some degree by the exercise of skill or judgment."); D'Orio v.
Startup Candy Co., 71 Utah 410, 266 P. 1037, 1038 (Utah 1928) (chance must be dominating
element); Seattle Times Co. v. Tielsch, 80 Wash.2d 502, 495 P.2d 1366 (Wash.1972) (en bane)
(dominant factor test); State v. Hudson, supra at 558 ("[A] lottery exists, even though skill,
judgment or research enters to some extent, if chance predominates in the determination of the
result."); see also Statev. Wassick, 156 W.Va. 128, 191 S.E.2d283 (W.Va.1972); Statev. Dahlk,
111Wis.2d287, 330N.W.2d 611, 617 (Wis.Ct.App.l 983)("Chanceratherthan skill must therefore
be the dominant factor controlling the award in a lottery. Most jurisdictions apply the 'dominant
factor' test, by which a scheme is a lottery if chance dominates even though some degree of skill or
judgment is present.").