This game is a hot weather variant on the classic game of "hot potato." The object is to be the last dry player, which makes it a win-win for everyone. Plus, this can be played with three or more people, so it's great for a crowd.
Begin by having players sit or stand in a circle. Then, instead of simply passing a water balloon from player to player, they throw it across the circle to a specific player. As the tosses continue in a clockwise direction, it won't be long before a balloon breaks. If this happens, the player who either let the balloon fall or popped the balloon upon catching it is "out."
As for the thrower, if he lobs the water balloon too hard -- making it hit a player and explode because of excessive force -- he is "out." The idea is to toss the water balloon underhand for a soft landing.
The game continues until only one (mostly dry) player remains [source: Shelby].