On 4th May 2018 (1-2pm) Dr. Peter Dürsch, research assistant at the University of Heidelberg will give a presentation about “Measuring skill and chance in games” in Q4.245. Afterwards, Mr. Dürsch will be available for questions and discussions. His presentation is part of: https://wiwi.uni-paderborn.de/dep1/me/research/discussing-research/seam/
Online and offline gaming has become a multi-billion dollar industry, yet, games of chance are prohibited or tightly regulated in many jurisdictions. Thus, the question whether a game predominantly depends on skill or chance has important legal and regulatory implications. In this paper, we suggest a new empirical criterion for distinguishing games of skill from games of chance: All players are ranked according to a "best-fit" Elo algorithm. The wider the distribution of player ratings are in a game, the more important is the role of skill. Most importantly, we provide a new benchmark ("50%-chess") that allows to decide whether games predominantly depend on chance, as this criterion is often used by courts. We apply the method to large datasets of various two-player games (e.g. chess, poker, backgammon). Our findings indicate that most popular online games, including poker, are below the threshold of 50% skill and thus depend predominantly on chance. In fact, poker contains about as much skill as chess when 75% of the chess results are replaced by a coin flip.