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I've seen this asked a million times on quora and reddit, but the answers don't seem so good. As for (law) stackexchange, it seems this has been asked only once in a case where apparently you can't lose.

Scope:

  1. Focus on games where you can lose (re question above). Like you don't get any tickets. Or you don't get enough tickets to win something.

  2. Not every game in an arcade gives tickets like when you play time crisis or house of the dead. Exclude those. Focus on the ones where you do get tickets depending on your performance or luck (or both).

So far some answers I've seen involve:

  1. Technically the prizes you get at arcades aren't money.

    • Sub-question 1: Though you could sell the prizes?
  2. The prizes' total value doesn't exceed the cost of obtaining such prizes.

    • Sub-question 2: And if they did?
  3. Something about games of skill vs games of chance, typical terms in gambling law, but these terms kind of bore me whenever I ask/read about gambling (eg this), so I didn't read further. Please avoid bringing this up if you don't mind. It's really boring.

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Jurisdictions vary but, in general, gambling involves wagering something of value in a game of chance to win something of value.

“Something of value” is usually interpreted broadly but it must usually be something that can, at least in theory, be sold for money. So, skins in a popular online game qualify if there is a secondary market for their trade. However, a mother’s love isn’t.

“Game of chance” versus game of skill is a continuum. So, for example, Snakes and Ladders is a game of pure chance - it can be played equally well by an automaton as a human. Go is a game of pure skill - it requires a human brain or an extremely sophisticated algorithm to play well.

Sport is considered a game of skill so competing for prize money is not gambling even if there is an entry fee. However, wagering on the outcome of sports is gambling even though it requires considerable skill to do well.

Arcade and carnival games avoid gambling laws by:

  • primarily being games of skill (e.g. a shooting gallery);
  • by giving everyone a prize, the vast majority of which cost less than the price of entry. This is the “loot box” solution and really nudged the line;
  • by being exempt, either explicitly or by a long period of tolerance by the authorities.
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  • I'll note that many games (claw games, time the button press to win, etc.) toe the line between skill and luck by having a hidden luck factor: X% of games (configured by the operator) are skill-based and the rest of the time the game "cheats" to ensure players cannot win.
    – Brian
    Nov 10, 2021 at 14:19

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