Are MMOs illegal now?

[pdxhero]

As most everyone probably knows, there is a genre of online gaming variously called "massively multiplayer online" (MMO) or sometimes "massively multiplayer online role playing games" (MMORPGs). These are the "virtual world" games, including Everquest, the Sims, Second Life, Runescape, etc.

All MMOs have a notion of virtual money. And as a practical matter, their virtual money can in all cases be exchanged for real money. Some of the game franchise owners really try to prevent real-money transfers (RMTs) of game items; others don't try very hard and some, recently, don't even have rules against it. In the case of games that have rules against it, the RMTs are supported by a gray market operated by companies like IGE.

All MMOs contain random events. These may be explicit, as when plays establish gambling operations using game objects, or implicit, as when valuable in-game items become available.

This leads to a host of interesting questions with respect to both taxes and UIGEA.

Why do we care? Because there are millions people in the US playing MMOs. Any involvement or even potential involvement of MMOs with UIGEA would cause a lot of young people to become instantly interested in politics, completely changing the political dynamic about UIGEA.

[Berge20]

Which MMOs explicitly allow the sale of in-game items/money for RL cash?

[MiltonFriedman]

Good angle ..... Raise the issue in the appropriate games forums.

($15 per month x 6 million subscribers, the reported revenue for just one game sponsor, is not small change.)

[ianlippert]

[ QUOTE ]
Which MMOs explicitly allow the sale of in-game items/money for RL cash?

[/ QUOTE ]

I think second life allows you to exchange fake money for real money. The problem is that the MMO you would want to target is WOW, and its against blizzards terms to sell items for real money. So blizzard wouldnt be safe from legal action.

[SlightlyMad]

First of all, only 1.75 million (North America/Europe) of the now 7 million subscribers to WoW pay the flat $15/month. Most of the Chinese/Korean subscribers pay about $0.09/hour that they play ... lots of inactive accounts. Even if you assume that the other 5.25 million accounts are played 10 hours/month, World of Warcraft is less of a compelling cash cow than you might think.

Second, World of Warcraft actively discourages IGE and their ilk (banned a whole series of players a couple of weeks ago for gold selling amongst other things). Originally, people were running roulette wheels with /random in Ogrimmar/Ironforge (the two largest cities in the WoW universe) for in-game cash, and that was shut down within a couple of months of the game starting up.

Second Life is an example of a game that allows in-game purchase of virtual assets. Microsoft's XBox Live allows you to buy points for US$, but these can not be gambled via Texas Hold'Em Poker (it's just the equivalent of a .NET site.) Both World of Warcraft and Everquest have paid account transfer schemes, but that's less about in-game asset purchase.

None of the games mentioned encourage gambling as part of their core, and saying that random item drops are gambling is specious.

[crzylgs]

It's my understanding that you have to be risking "something of value" on a game "subject to chance" for it to be considered gambling. MMOs probably fail the risk test, unless you count the subscription fee. They are certainly games "subject to chance".

[pandemonium]

Don't know if they're illegal, but they're certainly being assessed for their taxability.

ars technical article
legal affairs article
lawmeme (yale) article on second life tax revolt
brunei times article

[Texibus]

Ultima Online is one I know that facilitaties account transfers. I don't know about any in game money or what not.

All games now including everquest and WOW are very strict on banning accounts that sale items for money or sale of the account it's self. PLus the games own all that property under the intellucual property rights. I was involved with WOW and was planning on selling my account, and got intangled in all the mess end up not selling due to it.

[jap613]

Well I dont know about MMOs but if there are any Magic The Gathering players they will know right away what I am talking about..

Magic The gathering the card game released an online version a few years ago. You buy virtual cards with "tickets" and each ticket is a dollar in real life.

You buy tickets from the companys website and then you use them to enter tournaments where the winner is awarded virtual packs which can be sold for tickets.

These tickets can be sold on EBAY for real money, very easily. In fact users buy tickets using money from Party Poker and Pokerstars and UB.

Its weird, it will go untouched I'm sure, along with MMOs
Thats just my opinion, what do I know

[TheFreeze]

Everquest 2 has servers designated where you can buy and sell stuff for real money: http://eq2.stationexchange.com/index.vm

I remember reading about Entropia where people were buying virtual real estate for crazy sums of money: http://news.com.com/Real+cash+for+vi...tml?tag=st.num

And then there's the casino MMO: http://www.phantomefx.com/

In WoW you can play poker for play money. This money is totally separate from the in game money/gold so it's just there for fun.

And in Sims online, there are casinos.