Is a game like HQ Trivia considered a "game of skill" or "game of luck" (for gambling purposes) and what are the current US laws governing "games of skill" or "games of luck" (whichever is the answer to the above) with regards to whether participants can be charged a fee to play or whether a jackpot can be a pari mutuel?
Below is an overview on HQ Trivia, as it relates to its classification as a game of skill. Definitions for various terms (game of skill, game of luck, gambling, and parimutuel) have been included to provide comprehensive look as to why HQ Trivia falls under a game of skill. Please note: laws and definitions as they relate to HQ Trivia are aligned with New York regulations, as HQ Trivia falls under their jurisdiction.
The United States defines a game of skill as an activity where certain skills are needed to affect the outcome (i.e. Blackjack; if you understand the strategy of the card game, you can improve your chances of winning with better decision-making).
Games of luck (also referred to as Games of Chance) include games such as slot machines, roulette, scratch tickets, and bingo, where the outcome isn’t affected on how good you are at the game (i.e. spinning slower or faster on the roulette will not affect the outcome).
Under New York law, gambling occurs “when a person stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome.” While poker and card games such as Blackjack have been ruled as games of skill by numerous courts, many still classify them as a form of gambling, and are illegal online.
“A form of betting and of handling the betting in which the winnings are distributed in proportion to the wages/bets made before the outcome.” In other words, if there are three predicted outcomes of, each associated with a different wager (one is $1, two is $2, and three is $3), and outcome two was the winner, only the people who wagered $2 for that outcome will receive the winnings.
HQ Trivia is categorized as a Game within the App Store. Because the outcome and your subsequent opportunity to win is dependent on your skills in trivia (as it relates to general knowledge), HQ Trivia is considered a game of skill, rather than a game of luck. Further, it is free for all participants to play, so they are not staking or risking any money to play. However, it is worth noting that HQ Trivia could technically decide to charge a fee to play their game, and call it an “entrance fee” and not a “wager” in order to bypass gambling restrictions, but HQ Trivia has no plans to utilize this tactic.
Additionally, winnings in HQ Trivia cannot be parimutuel, as the app is considered a game of skill. Any winnings from HQ Trivia are divided equally between all players, and wagers are not involved, as the app is free of charge and no money is needed to participate.
HQ Trivia does pose a few risks for users who don’t comply with their official written rules and regulations. All players must be 17 years or older, which can be hard for HQ Trivia to monitor, and if the user falsifies their age, they could face negative consequences from authorities. HQ Trivia is governed by New York laws, which means they “do not have to research/comply with other laws in the United States and abroad.” Meaning, if someone is playing HQ Trivia in a state or country where HQ Trivia is prohibited, they would have to forfeit any winnings and face local legal consequences.
Examples of United States that prohibit entry fees for games of skill include Vermont, Maryland (regarding requiring “the purchase of a product” in order to play), and Florida, where utilizing entry fees as the jackpot winnings is prohibited.
At a holistic view, HQ Trivia is considered a game of skill, not a game of chance, and therefore no regulations or laws as it relates to gambling are associated. HQ Trivia is free to play, and is categorized as a game within mobile app stores. As HQ Trivia is governed by New York law, various cautions should be taken by players who are falsifying their age, or those who play in different states and countries where the same regulations don’t apply.