Linden Lab Official:Second Life Skill Game Guidelines

These Guidelines are intended to assist Creators developing games and Operators setting game parameters so that their submissions are more likely to pass the Linden Research Inc. (“Linden Lab”) screening process to become approved Skill Games.

All capitalized terms herein have the meanings set forth in the Skill Gaming Policy, available at http://wiki.‌secondlife.com/wiki/Linden_Lab_Official:Second_Life_Skill_Gaming_Policy.

Linden Lab reserves the right to modify these Guidelines at any time, and you should review them each time you submit a Creator or Operator application or a new game for Linden Lab’s consideration. Linden Lab also reserves the right to re-examine games that it has previously approved to ensure they comply with current policies and the Guidelines.

These Guidelines are subject to the Skill Gaming Policy and are intended to provide additional guidance to the Creator and Operator communities. In the event of conflict between these Guidelines and the Skill Gaming Policy, the Skill Gaming Policy shall control.

No game shall be approved unless it meets the definition of a “Skill Game,” which is a “game, implemented through an Inworld object: 1) whose outcome is determined by skill and is not contingent, in whole or in material part, upon chance; 2) requires or permits the payment of Linden Dollars to play; 3) provides a payout in Linden Dollars; and 4) is legally authorized by applicable United States and international law.”

In practice, some Creators and Operators have struggled to comply with the first part of this definition, which requires that the outcomes of games be determined by skill and not contingent, in whole or material part, upon chance. These two independent requirements are derived from two of the most prominent and widely used legal standards in the United States for determining whether a game is one of chance and, therefore, gambling.

It is important to note that “outcome” does not only mean whether one “wins” the prize but also includes the amount of the prize won. Thus, if chance determines or is a material factor in determining the amount a contestant wins in a game, that game will not satisfy our requirements.

1. SKILL GAMES MUST BE DETERMINED BY SKILL


2. SKILL GAMES MAY NOT BE CONTINGENT, IN WHOLE OR IN MATERIAL PART, UPON CHANCE


3. REASONED LEGAL OPINIONS MUST ATTEST TO A GAME’S LEGALITY IN ALL PERMITTED JURISDICTIONS


4. COMMON CHANCE ELEMENT “PITFALLS”


5. TYPES OF EVIDENCE TO SUBMIT IN SUPPORT OF GAMES


6. TYPES OF EVIDENCE TO AVOID


7. GAME DISCLOSURES


8. SEQUENCING OF THE CREATOR AND OPERATOR APPLICATIONS


9. WHAT TO DO IF AN APPROVED SKILL GAME IS REVISED

1. SKILL GAMES MUST BE DETERMINED BY SKILL

   The most common legal standard is known as the “predominance test” or “dominant factor test.” Courts employing the predominance test assess which of two elements – skill or chance – is “the dominating factor in determining the result of the game.” The predominance test can be thought of as a simple math ratio. If skill accounts for at least 51% of the outcome of the game, then it is the predominant factor, and the game would be considered one of skill in those jurisdictions that apply the predominance test.

2. SKILL GAMES MAY NOT BE CONTINGENT, IN WHOLE OR IN MATERIAL PART, UPON CHANCE

   The second accepted legal standard is known as the “material element” test. Under this test, “gambling occurs even if skill is the dominant factor, as long as chance is a material element.” The material element test is a more stringent standard, because it prohibits even those games whose outcomes are determined primarily by skill, so long as chance plays a “material” role. This test cannot be satisfied by simple mathematical ratios, and the ultimate determination with respect to any particular game will always depend upon a fact-intensive inquiry weighing the relative roles that skill and chance play in each game.

3. REASONED LEGAL OPINIONS MUST ATTEST TO A GAME’S LEGALITY IN ALL PERMITTED JURISDICTIONS

   Linden Lab permits Second Life residents in the United States to access the Skill Gaming Regions and participate in Skill Gaming if they meet certain criteria and reside in any of the following real-world jurisdictions: Alabama, Alaska, California, Colorado, Connecticut, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

   These jurisdictions apply various legal tests to determine whether a particular game is one of chance or one of skill. Reasoned legal opinions submitted in support of Creator or Operator applications must attest to the game’s legality in all of these jurisdictions. Linden Lab will not accept reasoned legal opinions that do not opine as to the game’s legality in each of the permitted jurisdictions.

   Reasoned legal opinions do not need to attest to the legality of the game in Arizona, Arkansas, Delaware, Florida, Kentucky, Louisiana, Maryland, Nevada, South Carolina, South Dakota or Tennessee, which are prohibited jurisdictions.

4. COMMON CHANCE ELEMENT “PITFALLS”

   Linden Lab has observed several recurring characteristics and elements in the games submitted for approval through the Skill Gaming application process that are likely to cause these games to fall outside the definition of a Skill Game. Unless otherwise stated, inclusion of one or more of the following characteristics or elements may not necessarily lead to rejection. However, these characteristics – alone or in combination – at a minimum will increase the likelihood of rejection and will delay consideration of an application due to the need for closer scrutiny of the game.

   1. Random/Unpredictable Bonuses or Penalties That Impact Ultimate Outcomes

      Some Creators and Operators have argued that their games allow players to employ strategies to collect bonuses or avoid penalties. When the location of these bonuses or penalties are known to players, or their locations can be deduced from information available during game play, and the game otherwise grants players the ability to maneuver strategically, the inclusion of these elements weighs in favor of finding the game to be one of skill. However, where the locations of bonuses or penalties are purely random or unpredictable through the use of any stratagem and are hidden to players, players have no opportunity to employ any strategy in collecting or avoiding them. This problem is exacerbated where points thresholds required to win or to win larger prizes depend on the collection of these random or unpredictable bonuses.

      Accordingly, games that award bonuses or impose penalties that are random or unpredictable through the use of any reasonably achievable skill or strategy will be deemed noncompliant with the Skill Gaming Policy and will be rejected.

      If a game awards in-game bonuses or imposes penalties, they should be designed so that players can discern the locations and amounts of those bonuses and penalties during game play. In addition, they must provide a mechanism by which players may take deliberate action designed to collect that bonus or to avoid that penalty.

   2. Target Scores Unattainable Without Bonuses

      Some Creators have given Operators the ability to set the minimum target score needed to win a game. In practice, Operators have set minimum target scores that increase as the payouts increase. Game play does not vary between these “machines” or “terminals”; the only differences are the pay-in, payout and target score – which all increase in ascending order. At times, players may be unable to attain the target scores set by the Operators through mere game play alone, without bonuses. In other words, even if a player plays the game “perfectly” and achieves the maximum number of points available without any bonuses, the player’s score still may fall below the minimum target score set by the Operator.

      Games should be designed and operated such that a game played skillfully is capable of being won. This does not mean every individual game round must present players with the opportunity to play a “perfect” game. Rather, Operators should ensure that minimum target scores do not exceed the maximum number of points achievable by a skilled player through regular game play. Any games that set minimum target scores so high that players cannot achieve them without relying on bonuses will be deemed noncompliant with the Skill Gaming Policy and will be rejected.

   3. Random/Unpredictable Add-ons (Winks, Toppers, Multipliers, etc.)

      Some Creators and Operators have requested approval for the use of game add-ons, such as winks, toppers and other multipliers, to offer players a chance to win larger prizes. Add-ons must meet the same requirements applicable to Skill Games generally and to in-game bonuses. If chance determines or plays a material role in determining whether the player achieves or obtains the add-on, or in determining the value or impact of the add-on, such add-on will be deemed noncompliant with the Skill Gaming Policy and will be rejected.

      Examples that illustrate the intent of these Guidelines are set out immediately below. These are only examples and are not intended to limit the types of add-ons that may be proposed.

      • Pre-determined multiplier or bonus known to player. Many of the game add-ons submitted for approval rely on chance for the determination of a multiplier or bonus that may increase a player’s prize. An add-on that instead offers a pre-determined multiplier or bonus known to a player prior to commencement of gameplay is more likely to be approved.
      • Game add-ons tied to skill. Similarly, an add-on dependent upon skill rather than chance is more likely to be approved. For example, leaderboard add-ons – so long as the underlying game meets the Skill Game definition – would be acceptable because they reflect the skill of the participants in the underlying games.
      • Add-ons that award additional play. Add-ons that award credits allowing additional play of the Skill Game must meet all of the same criteria that other add-ons must meet and must not cause the game to fall outside of the Skill Gaming Policy. For example, an add-on awarded randomly that allows a participant more chances to play a game and, hence, to win a prize would risk a determination that chance plays at least a “material element” in determining the game’s outcome. Of course, if the game itself may be played for free, without payment of Linden dollars, then the game may fall outside of the scope of the Skill Gaming Policy. (In that example, non-paying participants would need to be on equal status with paying participants – in other words, both groups would need to have an equal chance of winning the prize.)

   4. Bingo-Style Matching Games

      Several Creators and Operators have submitted games that materially resemble the game of bingo. Frequently these games utilize a game board where numbers are arranged in columns and rows, with a “spinner” below. The spinner acts as a random number generator (or appears to be random), and each round requires the players to match numbers on the spinner to numbers in the corresponding columns in the game board above. This is materially similar to the game of bingo, wherein a bingo player must match the numbers called from the tumbler to the numbers on his or her bingo card. These games may or may not provide players with a guaranteed move each round. When players match a number on the spinner to a number in the game board, the number tile on the board is “unlocked.” Players are awarded points for each tile unlocked, as well as for creating certain linear patterns, like vertical, horizontal or diagonal rows of unlocked tiles, or for unlocking the full game board.

      In many of these games, players have no control over the numbers that appear in the spinner or the numbers that appear on the game board, so a player cannot strategically increase the likelihood of getting a match. Likewise, players have no ability to unlock tiles strategically in particular linear patterns that will award more points, because players cannot predict or control the numbers generated on the spinner or the game board. Certain games that provide a guaranteed move each round may further reduce the degree of “skill” in creating linear patterns if a player is guaranteed to clear most of the board through ordinary game play. For example, a game that guarantees a match for each of 8 rounds and employs 3x3 game boards assures that players will always be able to clear 8 of the 9 total tiles.

      These games will be presumed to include chance as a material element, and, therefore, in violation of the Skill Gaming Policy. Games that possess these characteristics will need to include additional characteristics or modifications that sufficiently enhance the level of skill to overcome that presumption.

      Examples of characteristics for bingo-style matching games that could increase the likelihood of approval under the Skill Gaming Policy include:

      • Trackable bonuses/penalties. Certain bingo-style matching games contain multipliers and penalties randomly hidden on the board. As noted above, games that award bonuses or impose penalties that are random or unpredictable through the use of any reasonably achievable skill or strategy will be deemed noncompliant with the Skill Gaming Policy and will be rejected. However, games where players are able to track these bonuses and penalties on the game board and strategize accordingly are more likely to be approved.
      • Tile choice. In some bingo-style matching games, players have the ability to select from among two or more tiles on the game board in order to utilize their “matching” tile on the spinner. Whenever players have a choice about which tile to select and the tiles yield different consequences which are known or can be ascertained by the players, players have the ability to deploy strategy and the game is more likely to be approved.
      • Multiple objectives. Similarly, some bingo-style matching games offer multiple objectives, instead of simply attaining the minimum target score. Whenever there are multiple objectives (each achievable through the exercise of skill, rather than chance) and players must make choices about which objective to prioritize, the game is more likely to be approved.

   5. Dice Games That Resemble Farkle

      Several Creators and Operators have submitted games that materially resemble the game of Farkle. These games utilize dice that are programmed with a randomization algorithm, so that they appear random from a player’s perspective. Like the game of Farkle, players roll the dice, decide which dice they want to keep, and continue rolling the other dice until their round is over. In certain variations, the dice are replaced with a spinner that generates symbols. Other variations place a limit on the number of rounds of play.

      These games will be presumed to include chance as a material element, and, therefore, in violation of the Skill Gaming Policy. Games that possess these characteristics will need to include additional characteristics or modifications that sufficiently enhance the level of skill to overcome that presumption.

      Examples of characteristics for dice or other symbol games that resemble Farkle that could increase the likelihood of approval under the Skill Gaming Policy include:

      • Non-random, predictable dice/symbols rolls. Dice values that appear in a predictable pattern, such that players can strategically choose when to “freeze” the dice, are more likely to be approved. The pattern should be reasonably discernible to players, and players should not need to rely on advanced computing capabilities to determine the pattern/algorithm used.
      • Publication of the dice roll pattern. Patterns that are disclosed to players – particularly in cases where the pattern is relatively more difficult and unlikely to be discernible by players independently – are more likely to be approved.
      • Pattern uniformity among players in multi-player games. Multi-player games that apply the same pattern to all players are more likely to be approved.

   6. Casino Games and Sports Wagering

   Linden Lab’s Policy Regarding Wagering in Second Life, available at http://wiki.‌secondlife.com‌/wiki/Linden_Lab_Official:Policy_Regarding_Wagering_in_Second_Life, prohibits wagering on games in Second Life if those games “[r]ely on chance or random number generation to determine a winner” and reward winners with Linden Dollars (L$) or any real-world currency or thing of value.

   Prohibited games include, but are not limited to: baccarat, bingo (unless modified as discussed above), blackjack, craps, faro, fan-tan, keno, pachinko, pai gow, poker, roulette, sic bow and slot machines. Any games that resemble these or other casino games will be deemed noncompliant with the Skill Gaming Policy and will be rejected, unless sufficiently modified to comply with that policy.

   The Policy Regarding Wagering in Second Life also prohibits wagering on games that “[r]ely on the outcome of real-life organized sporting events.” Sports wagering games will be deemed noncompliant with the Skill Gaming Policy and will be rejected.

5. TYPES OF EVIDENCE TO SUBMIT IN SUPPORT OF GAMES

   A Creator or Operator need only comply with the application requirements to ensure that a game is eligible for consideration under Linden Lab’s Skill Gaming Policy. That policy requires a reasoned legal opinion in support of the game, as well as a detailed, step-by-step description of gameplay. Reasoned legal opinions must be based upon the counsel’s independent analysis of the game and the degree of skill involved, and cannot rely upon the Creator’s or Operator’s assertions of the amount of skill and chance involved.

   Other evidence that may aid in Linden Lab’s consideration includes:

   • Data showing aggregated player outcomes over time. A sufficiently robust dataset (both in terms of number of players and duration of play) that demonstrates a high degree of correlation between skill and outcomes will support an application, although it cannot substitute for the other requirements.
   • Data showing individual player outcomes over time. A similarly robust dataset that demonstrates a high level of consistency in individual player outcomes – e.g., that players who achieve high scores do so consistently and vice versa – also may offer compelling evidence in support of a game. (In fact, Linden Lab generally would view these types of data as more persuasive than purely aggregated results.)

   Note that datasets submitted in support of game applications must be robust. Such datasets must include a sufficiently large quantity of players and games played to offer statistically meaningful results. Linden Lab does not currently impose a bright-line minimum for either of those criteria, but encourages applicants to explain why the data submitted are reliable.

   Linden Lab reserves the right, in our sole discretion, to require Creators or Operators to analyze and supply these types of data, even if a game has been approved. Linden Lab may revoke that approval if such data are not provided or if Linden Lab determines them to be insufficient.

6. TYPES OF EVIDENCE TO AVOID

   When describing the types of skill used in a game, Creators, Operators and counsel should avoid describing mere actions required to play the game as “skills.” Linden Lab will not consider an action to be a “skill” without some basis for that characterization. Examples of actions that are unlikely to be viewed as “skills” include:

   • Game selection. Selecting a particular machine within a Skill Gaming Region is a step that occurs prior to actual play of the game and cannot be considered a skill utilized during game play.
   • Mere game play without more. Some legal opinions have argued that every action taken by a player within the game is a skill, because if no actions are taken, then no winning outcome would be achieved. Reasoned legal opinions should not assert this type of “skill” because it is equally true of skill games and chance games – even pure chance games must be played in order to be won.

7. GAME DISCLOSURES

   Equally important as the game features themselves is the need fully, clearly and conspicuously to explain game rules and conditions to prospective participants. Game Operators must take care conspicuously to disclose point thresholds required to win a prize, maximum available points, percentage of winning entrants and other material facts relevant to the games. State laws governing contest disclosure requirements may be consulted by Operators as a reference for this purpose.

8. SEQUENCING OF THE CREATOR AND OPERATOR APPLICATIONS

   For purposes of efficiency and to minimize delays, Linden will require Creators to submit the initial application for any new proposed Skill Game. Creator applications should clearly disclose any features of the game that may be customized by operators, such as pay-ins, payouts, minimum target scores, and the ability to utilize add-ons.

   Operators must await approval of the Creator application for a game before making their own submissions. The Operator’s initial application for a Skill Game should satisfy all of the requirements set out in the Skill Gaming Policy, including any configurable or customized elements specific to that Operator’s implementation. The Operator must explain why those configurations or customizations still satisfy the Skill Gaming Policy.

9. WHAT TO DO IF AN APPROVED SKILL GAME IS REVISED

   If a Creator subsequently determines to modify an approved Skill Game in a way that materially impacts gameplay, it must provide a supplemental submission from counsel that describes the changes and explains how the changes comply with the Skill Gaming Policy and do not cause the game to fall outside of the definition of a Skill Game.

   Once a revision has been approved, other Operators who obtained approval to offer the prior version of the game may rely on that approval, provided that (a) they attest that no additional customizations or configurations have been made for the Operator’s implementation of the game, or (b) they describe in detail any customizations or configurations and explain, through counsel, how those features comply with the Skill Gaming Policy and do not cause the game to fall outside of the definition of a Skill Game.

   Operators desiring to offer the game for the first time must follow the standard application process.

Effective: February 2, 2015

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