New Research Report Released on the Skill-Based Gambling in Australia

September 26, 2023 | Gambling

Central Queensland UniversityJune 2023 – The aim of this study was to explore the risk of problem gambling and gambling-related harm associated with skill-based gaming machines (SGMs). The research consisted of an environmental scan, a literature review, a skill-based experiment, interviews with SGM gamblers and a skill-based survey.

Findings indicate that SGMs may increase gambling harm and encourage repeated play among people who are already experiencing a gambling problem. Young males and people who play videogames are among those most likely to gamble more intensively on SGMs. It was also found that people who already play electronic gaming machines are most likely to be attracted to SGMs.

The  study was  led  by  researchers at  Central Queensland University.

Executive Summary


 Gambling Research Australia commissioned this research program to assess the implications of incorporating skill-based components into electronic gambling machines (EGMs), and how such innovations may contribute to gambling harm and the risk for developing gambling problems. The primary objective was to investigate the impacts of skill-based features in EGMs on gambling behaviour. In this report, EGMs with skill-based features are referred to as Skill-based Gambling Machines (SGMs). Skill-based gambling machines are a particular kind of electronic gaming machine that permits players to apply their skills, rather than solely relying on chance, to impact the game’s result. Unlike conventional EGMs that rely on a random number generator to determine the outcome, skill-based gambling machines offer players the chance to employ their physical dexterity, strategic thinking, or knowledge to enhance their prospects of winning.

In practical terms, the research program aimed to assess how the introduction of skill and apparent skill in SGMs influences:

  • illusions of control, chasing losses and other cognitive processes,
  • the impact on the pattern of play, increases in the risk of gambling-related harm or exacerbation of problem gambling, and
  • the potential appeal of skill-based gambling machines to at-risk

The research questions (RQs) posed by Gambling Research Australia are reproduced at the start of each data-driven study section, below, where they have been principally answered. These questions use the term “gaming” to refer to “gambling” in accordance with industry practice, but the latter term is used by the study authors throughout the report to distinguish gambling from video-gaming. This distinction is important since some survey questions in the project address internet gaming disorder separately from a gambling disorder.

Literature Review on Skill-based gambling machines (SGMs)

The literature review revealed that SGMs have been introduced in the US in the last decade and have been recently introduced in Australia on a trial basis. The design of SGMs incorporates aspects of skill- based play, and often mimics the operation of classic videogames. However, concerns have been expressed about the potential for SGMs to contribute to harmful engagement, as they may create false impressions of positive returns and enhance illusions of control. The “VICES” framework, which was

developed for understanding the potential risk for automating traditional casino games, is relevant to SGMs. The framework was developed and detailed in the GRA-sponsored report Innovation in Traditional Gambling Products (Rockloff et al., 2016). The framework considers the dimensions of (V)isual and auditory features, (I)llusions of control, (C)ognitive complexity, (E)xpedited play, and (S)ocial aspects on game design. According to the reviewed literature, SGMs are expected to be popular among younger and male gamblers who have higher rates of gambling problems and tend to prefer skilled gambling products. A qualitative study found that gamblers can struggle to fully understand how these products work, leading to confusion regarding their operation and an increased risk of problematic and harmful gambling. Nevertheless, there is only limited research on the appeal of SGMs, which highlights the gap that the current research program helps to address.

International Environmental Scan

What skill-based technology for gaming machines is currently available or being considered in Australia or overseas? RQ 1

The research program began with an environmental scan that documented the features of existing skill- based machines (skill-based gambling machines or SGMs), including hybrid machines incorporating skill and non-skill (reel-based) components. Presently, only a few SGMs have been approved in some jurisdictions of Australia, including the states of New South Wales, Victoria, Western Australia and Queensland. Pop Shots Witches Coven is operating in New South Wales, Victoria, and Western Australia, while Megamatch Jelly Kingdom, Megamatch Lucky Harvest, Pop Shots – Witches Coven Deluxe, and Pop Shots – Wild Mermaid Deluxe are approved for use in Queensland. All games have skill- based elements within won bonus-rounds of play but otherwise operate with spinning reels like a traditional Electronic Gaming Machine (EGM). These Hybrid Gaming Machines (HGMs) are the most popular type of skill-based game installed worldwide. In contrast, some games approved for use overseas incorporate skill-based elements throughout play. For instance, the Brookhaven Experiment, which is set within Gamblit’s signature Virtual Reality Cube (VRC), offers a game more akin to a high-end arcade experience.

Thematic analysis was used to identify key themes from environmental scan data. The findings show that these games often have intense music and graphics that aim to attract a younger, non-gambling demographic. The integration of skill components and social features in these games may result in expedited play and illusions of control, which increases the risk of gambling problems and harm. The

environmental scan highlights the need for further investigation to assess the risks and benefits for players to better inform regulators, legislators and the public.

Expert Submissions and Interviews

Experts were asked to submit evidence and participate in interviews to aid a current understanding of the topic, and to better inform the design of subsequent research-program components. Interviews were conducted with gambling experts from Australia and the United States (US), and written submissions were provided by stakeholders. The results showed that SGMs offer new opportunities but also come with potential new risks, such as heightened illusion of control over gambling outcomes and additional complexity affecting players’ understanding of game outcomes. Moreover, the nostalgic appeal of the skill-based gambling machines (SGMs), often replicating the look and feel of classic videogames, as well as unique social aspects of play, can differentiate them from traditional EGMs.

SGMs were seen by US regulators as an effort to “future-proof” the gambling industry. These findings helped aid in the design of survey questions for the subsequent internet surveys of US skill-based players (see below) that provided a better understanding what features are most appealing.

Skill-based Experiment

How accurate are gamblers in understanding the level of skill involved in skill-based gaming, and the odds of winning? RQ 3

Does skill-based gaming increase the ‘illusion of control’ and what is the potential impact? RQ 4

What is the potential impact on the pattern of play e.g., length and frequency of playing sessions, player loss per session, loss of control of gambling, gambling intensity and level of immersion? RQ 5

The experiment was designed to evaluate the impact of skill-based gambling games on player gambling- behaviour, as opposed to only self-reports that can be prone to recall errors and other biases.

Nevertheless, some self-report measures were also included for the analyses. This experiment involved 1,260 past-year gamblers, 46.3% female, playing an online skill-based gambling machine (SGM). An SGM was programmed to mimic the look and feel of the classic videogame, SeaWolf™, and a novel alternative we called SpaceFox. A control condition used the same graphics and sounds but presented the SpaceFox game in a more-traditional reel-based arrangement. The correlational results showed that people who already play EGMs and those with gambling problems are the people most attracted to these games.

Participants had generally inaccurate assumptions about the operation of both skill-based and reel-

based games, with their beliefs being significantly more inaccurate for the skill-based game. In particular, the skill-based game was found to have increased illusions of control compared to the reel- based “control” game and was also more immersive. Nevertheless, the skill-based game showed no evidence of increased betting intensity relative to the reel-based alternative. Lastly, the experiment found that people who are male, young, and who play video games are more likely to gamble more intensively on SGMs. The results suggest that SGMs provide an illusion of control that heightens a gambler’s impression that they can affect game outcomes. This belief can put people at risk for greater long-term losses.

Interviews with Skill-Based gambling machine Gamblers in the US (Nevada and New Jersey)

What effect does skill-based technology in gaming machines have on gambling-related harm? Is interest in these games associated with problem gambling? RQ 6

What are the options for mitigating the risks associated with skill-based gaming machine technology? RQ 9

To increase the ecological validity of the project, in-depth interviews were conducted with 20 US residents who regularly gamble on skill-based gambling machines (SGMs). The interview data revealed that the participants were attracted to the machines for their dynamic audio-visual effects, interactivity, novelty aspects, and challenge. They also reported that their motivations for playing included entertainment, nostalgia, and novelty-seeking. The study found that the participants had a poor understanding of the role of skill in determining the game outcomes. Many interviewees overestimated the impact of skill on wins and losses. The study also found that illusions of control were common among participants with a gambling problem. These SGMs may increase gambling harm by encouraging repeated play by vulnerable gamblers. The results emphasise the importance of educating gamblers on the limitations of skill in these machines and the strong role that chance still plays in determining game outcomes.

Skill-based Survey

Will skill-based gaming attract a new group of people who generally do not gamble? Which gamblers find skill-based gaming machines appealing? RQ 2

Do different types of skill-based games have different harm implications, for example those based on skill-based features as compared with games where skill is incorporated throughout play? RQ 7

How do responsible gambling behaviours, such as taking breaks in play, setting limits and so on differ for skill-based gaming? RQ 8

To create a better understanding of who plays skill-based gambling machines (SGMs), and their potential vulnerabilities, a survey was conducted with 1,134 people in the US states of Nevada and New Jersey. This survey allowed an understanding of the association between an interest in skill-based gambling and related outcomes of gambling-related harm and problem gambling, including among vulnerable subsets of gamblers who have exposure to these games. The study also surveyed non- gamblers to better understand the appeal of SGMs amongst people who might not otherwise use traditional EGMs. The results showed that people who play SGMs have higher rates of problem gambling compared to other bettors. Additionally, people with gambling problems showed a greater interest in playing SGMs in the future. The use of protective gambling practices was lower amongst people who played these games. Vulnerable groups, such as people of Hispanic background and those with psychological vulnerabilities, also showed a higher interest in playing SGMs, indicating a potential to worsen pre-existing inequities in society. Almost 40% of non-gamblers showed interest in playing these games, highlighting the wide appeal of SGMs outside of people already interested in traditional gambling products. The findings suggest that skill-based gambling presents some unique risks to existing players and could attract new players, particularly young males.


The research program investigated the impacts of skill-based features in EGMs on gambling behaviour. The results showed that the introduction of skill components and social features in these games can increase the risk of gambling-related problems and harm. Skill-based gambling machines (SGMs) can offer new commercial opportunities to operators in the industry, but they also come with potential new risks for consumers, such as heightened illusions of control over gambling outcomes and added complexity that obscures an understanding of the likelihood of winning. In particular, the skill-based experiment found that these games provide an illusion of control that heightens the impression that

gamblers can affect game outcomes, putting people at risk of gambling problems and harm. These findings show that there is a need for strong regulation of SGMs to protect people, including both current gamblers and potential future gamblers. Traditional EGMs already account for the majority of gambling problems in Australia. Adding skill-based features to these machines will amplify the harm they cause in the Australian community. It is particularly important to safeguard vulnerable groups, such as younger and male demographics, from the risks associated with these games.

CLICK HERE to download the complete report.

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