Legal Definitions - percentage game

A percentage game refers to any game, often involving elements of chance or skill, where the organizer or operator has a statistically built-in advantage or takes a predetermined portion of the money wagered or collected. This inherent edge ensures that, over a sufficient number of plays, the operator is mathematically guaranteed to profit, regardless of individual outcomes. It is distinct from games where participants compete solely against each other without the operator taking a cut or having a statistical advantage.

Here are some examples to illustrate this concept:

• Casino Blackjack: In a casino game like blackjack, the house (the casino) operates with a slight statistical advantage built into the rules, known as the "house edge." For instance, the dealer acts last and has specific rules for hitting or standing, which, combined with payouts that are slightly less than true odds, ensure that the casino will profit over the long run from the total money wagered by all players.

  This illustrates a percentage game because the casino's rules and payout structure create a mathematical certainty that a percentage of all money played will eventually be retained by the house, even if individual players win in the short term.

• Charity Raffle: A local charity organizes a raffle where tickets are sold for $10 each, and the grand prize is a new car. A significant portion of the ticket sales is earmarked for the charity's operational costs and programs, with only a smaller percentage forming the prize pool. The charity guarantees that a certain amount of money will be raised for its cause, regardless of who wins the car.

  This is a percentage game because the charity, as the organizer, ensures it retains a predetermined percentage of the total revenue from ticket sales, guaranteeing a profit for its mission before any prizes are awarded.

• Online Fantasy Sports Contest: An online platform hosts daily fantasy sports contests where participants pay an entry fee to draft virtual teams. The platform then takes a fixed percentage of all entry fees as its commission, with the remaining money distributed among the winners. For example, if 100 people pay $10 each, the platform might take $100 (10%), and the remaining $900 goes to the prize pool.

  This demonstrates a percentage game because the online platform, as the operator, guarantees its profit by taking a set percentage of all entry fees, regardless of which participants win the contests.