The arrival of a newborn into a family is a cause for celebration and makes every parent proud. The recent birth of The Interactive Skill Games Association (ISGA) in August 2007 is no exception.
Many observers may question why the skill games community needs its own association and why its needs can’t be met through the existing Casual Games Association (CGA).
In October 2006, the President of the United States signed the Unlawful Internet Gambling Enforcement Act of 2006 (“UIGEA” or “the Act”) into law. The Act brought to an abrupt halt the US operations of illegal gambling sites and hit the online poker industry hard. At the same time, the Act’s ambiguous language created confusion within the interactive games community at large.
The Act itself was characterized as “stealth legislation”—legislation signed into law without public debate or input. While the Act clearly stated that it was not intended to alter, limit, or extend any federal or state law, some believe the actual language of the Act might be interpreted differently.
Just how far the UIGEA reaches is unclear, but further clarity may be achieved through subsequent regulations and through guidance from the US Department of Treasury and the Board of Governors of the Federal Reserve System.
In the interim, the world’s two largest skill games companies—King.com and Fun Technologies—believe this is an opportune time to give voice to an industry and establish ISGA.
ISGA membership is open to all “bona fide” skill games companies operating within North America. A skill game is a contest in which player intervention is decisive in determining the outcome; or in other words, the game is won by the person who plays most skillfully. Well-known skill games include chess and trivia quizzes. They also include competitions in popular casual games like Bejeweled, Scrabble Cubes and Tetris in which players compete against other players for cash and/or prizes.
Skill games have significant social value. Skill competitions like spelling bees have long been used to teach valuable skills to both children and adults.
There is also scientific support for the benefits of skill games. For example, a June, 2003 study published in the New England Journal of Medicine found a significantly lower cumulative risk of dementia for elderly persons who play skill games compared to those who do not. In another study, researchers at Case Western Reserve Medical School in Cleveland compared the leisure time activities of more than 500 people, nearly 200 of whom went on to develop Alzheimer’s. The study found that “those who had engaged in stimulating activities throughout their life—everything from reading, doing crossword puzzles, and playing bridge, chess, or board games to visiting friends, practicing a musical instrument, and bicycling—were 2 ½ times less likely to get Alzheimer’s.”
Interactive skill games are played competitively between individuals, not against the “House” or a “bank”, and so the operator has no incentive to make the games particularly hard, other than for the enjoyment of the player. Players typically participate in a community experience, competing with each other in small structured tournaments in which the winner wins the collective entry fees less a fixed fee which goes to the tournament host for hosting the game(s). Skill game operators act as impartial tournament hosts. They have no vested interest in the outcome of each competition.
Interactive skill games companies are growing quickly in number and size and include companies based in the United States as well as companies owned and operated by multinational corporations. Building and maintaining skill sites involves many highly skilled individuals. Typically these companies raise revenues by collecting a user fee which is generally very modest as competition tends to set pricing. The most common method of raising revenues is to invite persons to compete in a tournament or competition for a small fee (typically under a dollar) with a cash or merchandise prize going to the winner.
It was this possible uncertainty that led to the creation of the ISGA in the fall of 2007. The ISGA’s primary objectives are to help shape the growth of the North American interactive skill games sector in compliance with federal and state law—and to promote public understanding of the sector.
To date, the ISGA was one of a handful of individuals and entities who provided written and/or oral testimony before the House Committee on the Judiciary at its November 14, 2007 hearing on “Establishing Consistent Enforcement Policies in the Context of Online Wagering.”
The ISGA has also established a presence in Washington, DC and is actively working with Congressional staff to ensure that any prohibitions against online games specifically exclude the types of games and interactive models offered by its member entities. In addition to its presence at the federal level, ISGA intends to monitor and, when necessary, become involved in protecting its members’ interests at the state and local levels.
One of the most important functions of ISGA will be to maintain open lines of communication with lawmakers and regulators alike. Education aimed at creating a bright line distinction between skill contests and games of chance is critical to the success of the interactive skill games community. To this end, the ISGA has been invited to present to regulators from across North America at the North American Gaming Regulators Association annual meeting to be held in the spring of 2008.
Now that skill games companies in North America finally have a voice through the ISGA, the challenge will be to ensure that we get heard. As part of our ongoing effort to represent the interests of all of our members, we look forward to hearing from you, welcoming you into our association and together raising our voice for the benefit of all.
For further information regarding ISGA membership, please visit www.onskill.org or contact Harlan Goodson directly at Harlan@hgoodsonlaw.com.
