The Following statements are generalities.
"Class III" (or "traditional") slot machines operate independently from a centralized computer system and a player's chance of winning any payout is the same with every play.
"Class II" slot machines (also known as "Video Lottery Terminals" or "VLTs") are connected to a centralized computer system that determines the outcome of each wager. In this way, Class II slot machines mimic scratch-off lottery tickets in that each machine has an equal chance of winning a series of limited prizes. Either class of slot machines may or may not have a player skill element.
In general a game must have all characteristics of a Class II game to be a Class II game. Any characteristic of a Class III game makes it a class III game. The casino pays a fee to the state for each Class III game and can only purchase so many Class III licenses. There is no such restriction for Class II games. Class II games are not so nearly regulated by the state.
Class II game characteristics
1. The player is playing against other players and competing for a common prize.
2. There is certain to be a winner in each game. The game continues until there is a winner.
3. In a given set there are a certain number of wins and loses. Once a certain combination has happened it cannot happen again until a new batch is initiated. This is most obvious in scratch card games that come in a pack. Once a card has been pulled those winning combinations cannot occur again until a new pack of cards is installed. One game is dependent on previous games.
4. The player must be an active participant. They must recognize events as they occur and must recognize when they have won and announce their winning. Bingo is an excellent example here.
5. All players play from the same set of numbers as they are announced.
Class III game characteristics
1. The player is playing against the house.
2. There is a very real possibility that the player may lose the game.
3. Each game is independent of previous games. Any possible outcome can occur in any game.
4. Wins are announced automatically.
