Consider I run a rock paper scissors matches online, where users buy in and cash out money if they win. Would this be legal in the United States? It is somewhat similar to esports tournaments, where teams buy in to participate in a tournament for a cash reward. Although many consider rock paper scissors luck, there is virtually no "chance" involved, and there are ways to predict an opponents move based on their previous match history.

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    "there are ways to predict an opponents move based on their previous match history" - people say that about the stock market... – Moo May 19 '20 at 20:56
  • @Moo Exactly. And who would bet on it if there was no chance involved and you could accurately predict what players are going to do? Or, more importantly, who would TAKE bets on it? – Kevin May 19 '20 at 20:57
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    The problem with the "no chance involved" aspect is that gambling on sports was banned for a long time, and theres definitely skill involved in that - what you might be thinking about is the whole "ask a question on a free draw to prevent the draw being considered a lottery"? – Moo May 19 '20 at 21:00
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    The mere absence of dice does not make it NOT a game of chance. Can you describe a process by which an RPS master becomes a master? Can you show evidence of mastery achieved, such as the same 3 people winning 15 of the last 20 World Series of RPS championships? Can you train a computer to beat humans at RPS? RPS lacks any fertile ground on which skill could be developed. – Harper - Reinstate Monica May 19 '20 at 21:36
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    Interesting but I don't think that gets you out of the woods. As a separate matter, if you allow winners to take cash back out, you enter a whole 'nother bailiwick, go look at the legal complications for Real Money Trading. In short, what keeps a terrorist from creating an account, playing RPS with terror funders in the US who deliberately lose, then you pay the prize money to the terrorists and you're the money conduit? The banking laws will make your head spin. – Harper - Reinstate Monica May 20 '20 at 21:15

This activity would be very likely to be considered gambling under U.S. law, because the person making the bet has to assess the probability of something outside his control happening and bet accordingly.

The fact that some people are better than others (particularly with access to information from past contests) at judging the probabilities at stake does not mean that something is not a "game of chance". Any situation that calls for a participant to predict probabilities is a "game of chance" as opposed to a pure "game of skill" even if skill at predicting probabilities materially improves your chances of success (e.g. blackjack is still a game of chance even if the casino permits you to engage in card counting).

Similarly, while sports betting requires skill, it is still gambling when you aren't personally playing the game, since the skill involved is an ability to predict the probabilities of an outcome and not the skill involved in playing the game itself.

Furthermore, it is not a probability based decision in which there is either an insurable interest in the outcome (because the outcome results in injury to someone or something in which a participant has an intrinsic economic interest apart from the bet), or in which the bet is an action which has economic reality apart from the bet (as in the case of a stock market or commodities market investment).

The legal implications of the fact that this is very likely a form of gambling is not alone enough to determine the legal consequences of that fact, which are beyond the scope of this post. Many other law stack exchange posts have grappled with the legality of Internet based gambling, in general.

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