DISRUPT ARCADE – LEGAL & REGULATORY FAQ

Updated November 2025

WHAT IS A SKILL-BASED GAME?

A skill-based game is any game where your own ability—not luck—determines the outcome. In legal terms, these are often called bona fide contests of skill. Many states define this as a competition involving skill, speed, strength, or endurance where prizes are awarded only to participants or the owners of entries.

Everyone has seen skill-based games before—even outside of esports. Think carnival games like Ring Toss, Balloon Pop, or the High Striker. You pay for a chance to play, use actual physical or mental skill, and if you perform well, you win a prize.

Skill-based contests also exist at the highest levels of sports and gaming:

• PGA Tour events (hundreds of millions in prizes)
• The Iditarod
• Half-court basketball shots
• Esports majors such as Dota’s The International, Fortnite World Cup, and the League of Legends World Championship

Even some courts have recognized games like Texas Hold’em poker as skill-based (though states don’t all agree). Daily fantasy sports also fall under similar skill-centric logic in some jurisdictions.

Today, major companies like Apple, Google, and Yahoo allow real-money skill contests. Disrupt Arcade simply brings this same lawful framework into the mobile gaming world.

ARE REAL-MONEY SKILL GAMES THE SAME AS GAMBLING?

In most U.S. states—no. Paying to enter a skill contest and winning real-money prizes is not gambling when the outcome is primarily skill-based.

The legal definition of gambling generally requires three elements:

1. A prize
2. Consideration (you pay to enter)
3. Chance determines the outcome

If skill determines the result, the activity is not gambling.

Courts use two major tests to measure whether a game is based on skill or chance:

1. The Dominant Factor Test (most common)

If skill determines the majority of the outcome, the game is considered skill-based.

Examples:

• Chess – no chance elements
• Scrabble – random letters exist, but strong players consistently dominate

2. The Material Element Test (stricter)

If chance plays a significant role—even if skill is dominant—a state may classify the activity as gambling.

Example:

• Backgammon – highly skillful, but dice rolls still materially affect results

Some states have special quirks as well—e.g., some ban all card games, others restrict dice games, and others vary on poker rules.

Disrupt Arcade only offers real-money contests in jurisdictions where the gameplay meets the applicable legal test. We evaluate each game’s mechanics, randomness, scoring, and competitive structure to ensure legality.

WHAT DOES DISRUPT ARCADE PROVIDE?

Disrupt Arcade is a competitive gaming platform that manages:

• Player matching
• Legal & regulatory compliance
• Anti-cheating technology
• Account management
• Tournament formats and payouts
• Leaderboards
• Cross-promotion and engagement tools

This allows developers to focus on building amazing games—and gives players a clean, transparent environment to compete for real prizes.

Disrupt Arcade also publishes its own games powered by our competitive framework.

Developers interested in integrating our platform may apply through our site.

HOW DOES DISRUPT ARCADE DECIDE WHICH GAMES ARE SKILL-BASED?

We screen every game using legal, technical, and statistical standards. Our review includes:

• Identifying any chance-based elements in scoring
• Confirming points reflect difficulty/skill
• Ensuring skilled players consistently outperform beginners
• Checking tie-break rules
• Confirming no forced guessing moments exist
• Reviewing clear, objective rules
• Ensuring random events don’t materially affect gameplay
• Making sure scoring scales with skill
• Verifying randomness can be synchronized in head-to-head modes
• Using statistical analysis to ensure outcomes correlate strongly with player skill

After a game launches, we continually audit updates and gameplay data. A key part of our system is a modified Elo rating model, which helps track:

• Consistency of player performance
• Skill improvement
• Whether game outcomes align reliably with skill inputs

This ongoing analysis ensures the game continues to meet legal standards over time.

WHAT IS THE LEGAL STATUS OF SKILL-BASED TOURNAMENTS IN THE U.S.?

There is no federal law banning skill-based real-money tournaments.

The primary federal law in this space, the Unlawful Internet Gambling Enforcement Act (UIGEA), only restricts transactions related to illegal gambling. Skill-based contests—because they don’t involve chance—are not considered gambling in jurisdictions where Disrupt Arcade operates.

In other words: If it’s legal in the state where the player plays and receives prizes, it’s allowed federally.

Disrupt Arcade maintains ongoing legal review to ensure compliance across all jurisdictions.

WHERE DOES DISRUPT ARCADE OFFER REAL-MONEY COMPETITIONS?

Skill-based gaming is governed state-by-state. Disrupt Arcade supports real-money contests in jurisdictions covering over 75% of the U.S. population, excluding:

Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Kentucky, Louisiana, Maine, Maryland, Mississippi, Montana, Nebraska, New Hampshire, New Mexico, South Carolina, Tennessee, Puerto Rico, and Washington.

We continually monitor legal changes so we can expand coverage where permitted.

HOW DOES DISRUPT ARCADE CONFIRM I’M IN A LEGAL LOCATION?

We use:

• GPS verification
• Device checks
• VPN detection

You can register and withdraw funds anywhere, but you can only play for cash in supported locations. VPN-based gameplay is automatically blocked to maintain compliance.

HOW DOES DISRUPT ARCADE KEEP GAMES FAIR?

We take fairness and integrity extremely seriously.

Our fairness measures include:

• Device checks to detect cheating tools
• Clear, published rules for every game
• Optional skill-based matchmaking
• Free practice modes so players can learn the game
• Enforcement of Terms of Use with strict penalties for violations

We invest heavily in anti-fraud, anti-cheat, and statistical oversight to keep the environment legitimate and competitive.

STILL NEED HELP?

Customer Support (accounts, prizes, gameplay):
hello@disruptlabs.xyz

Legal, Compliance, or Regulatory Questions:
hello@disruptlabs.xyz