Sameer Gupta walks into a bar, shaft in hand. Not just any bar, but T-Squared, a golf lounge located a few strokes from Grand Central Station.
Gupta strides up to a tee located near a screen that simulates a Par-3. Through an app on his phone, he wagers $20 on himself to land his ball in one of three spots. A hole-in-one will net him $1,000, and if he puts his ball within either of two separate radiuses from the hole, he will earn lesser amounts.'
Cameras surrounding the tee box recognize Gupta's face and, in turn, his handicap. These features help constitute the artificial intelligence stack of Skill Money Games (SMG), a company Gupta founded with Bryan O'Reilly, the son of a Las Vegas lawyer who once headed up the Nevada Gaming Commission.
In today's gambling environment, it takes a brass pair to have “skill” and “games” in your corporate moniker, seeing as how those terms are often associated with tabletop devices that tend to skirt regulatory requirements in various states.
But unlike many sports betting-adjacent companies, SMG has been diligent in setting up the proper legal framework to enter the states in which it is live, which for now are California, Colorado'and New York – with Texas on the near horizon.
“Most of us come from the regulated gaming business, and we feel very comfortable that this meets the definition of skill-based gaming,” said Gupta, while O'Reilly added, “For each state, we do a gaming opinion for that state specifying that we’re a game of skill.”
California and Texas are the two remaining golden gooses on the sports betting dart board. Incidentally, while it is currently focused on closest-to-the-hole golf contests, Skill Money Games has plans to expand into darts and bowling – not in simulated form, but by installing its cameras at actual alleys and bars.
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“We want to meet the market where it is,” said O'Reilly. “We're add-on technology. We add our cameras, our wallet.”
Passing legal muster
While SMG has plans to eventually expand its offerings into the multi-player space, it is currently a one-on-one – golfer versus the house – proposition. The larger radius from each hole is considered fair play, while the smaller one gives the house an edge and the golfer an opportunity to win 10 times their stake.
Sports Handle consulted a pair of sports law professors to determine whether SMG's offerings appeared to pass legal muster, and the answer, generally speaking, was yes.
“Competing for prize money in skill-based contests — whether athletic or intellectual — has a long history of legal permissibility in the United States,” said Ryan Rodenberg, a professor at Florida State University who researches gaming legal issues. “However, there are certain states that have strict guidelines about how prize money amounts are determined and distributed.”
“A plurality of states use the predominant factor which looks at how much of a role skill plays in determining the outcome of a game, and if a game's outcome is determined by skill predominating over chance, the game falls outside of their statutory definition, at least historically,” said John Holden of Oklahoma State University.
“The modern practice, particularly in the realm of sports-related activities, is to still have regulatory processes even if a game involves a predominating amount of skill. For instance, many argue that sports betting – and/or daily fantasy – is skill-based, [and] we still impose regulations. So, in this case, again, like all of these innovative cases, it really is a question that needs to be answered on a state-by-state basis.
“Certainly, many states allow prizes for competitions of skill – or sometimes strength – without considering an activity gambling, whether states view this akin to those activities, time will tell, I think. But, if what these companies say is accurate, some states may have already provided an indication of how they will treat the games. This seems like a few steps ahead of a lot of the newer ideas in the space.”