August 21st, 2005


Is Everquest II Illegal Now in 49 US States?

New Scientist magazine's website had an article the other day, and links to it got spread around: "Computer characters mugged in virtual crime spree." (Will Knight for New Scientist News Service, August 18th, 2005.) It's not a terribly long or, frankly, terribly informative news article. Basically, cops in one town in Japan have arrested a Chinese exchange student whose crime appears to have been using cheat software to "mug" people in Lineage II, fighting them only under conditions where (because he's cheating) he can't lose. What elevates this from a violation of the Terms of Service to an actual crime, in the eyes of the cops, is that in Lineage II (as in most of these games), if you defeat another player in combat you have a chance to steal one or more of the items that they worked very hard to get ... or, increasingly, that they paid good money for. And in this case, the cheater was making good money by mugging people in Lineage II and selling their more valuable weapons, armor, and magic items on an online auction site. Although it'll have be tested in the courts, the cops' legal theory seems to be that this proves that he was using force or fraud to steal items of verifiable economic value.

Unsurprisingly, had the best analysis of this that I saw. They set up a discussion thread about the article, entitled "Virtual Muggings in Lineage II" (also August 18th, 2005). If you read it at the default settings, you'll only get the comments that trusted members of the Slashdot community throught were especially informative, thoughtful, or funny, and quite a few of them are really good. But one of them especially stood out in my mind, let me quote it:
Beating up an on-line character and taking away its on-line money in a game is not at al analogous to robbing somebody. It's more like beating somebody at poker. Lineage II is a game in which characters are allowed to compete with each other for assets that have real-world value, just as with an on-line poker match. Taking somebody's money in Lineage II is no worse (or better) than slow-playing a hand of Texas Hold 'Em until some poor sap goes "all in" against you, and then cleaning them out.

That said, there are two obvious conclusions you can draw from my analogy:
1. If you cheat at poker, even on-line poker, you are a thief and should be arrested. Likewise, they were right to arrest this guy.
2. Lineage II is not just a recreational game. It's a means of gambling, and therefore should be regulated as such by any country which chooses to regulate gambling.
That last idea is a real eye opener for me, not least of which because if there were any doubt that it were true, Sony more or less accidentally erased it a couple of months ago, when they set up their own web site specifically for users to sell each other items for cash, "Station Exchange for Everquest II." Nor was Sony the first company to do so. There are at least two other massively multiplayer online games that I know of, Project Entropia and Second Life, that explicitly sell you in-game items for cash, and Project Entropia includes limited PvP where you can lose items to the other guy and specifically has a setup for you to exchange the stuff you loot from people for cash. Sony doing this in Everquest II, on the other hand, was not some economic experiment but, for all practical purposes, a capitulation to widespread demand.

Even games where buying and selling online items for cash is very, very much a violation of the terms of service, like Sony's Star War's: Galaxies and NCSoft's City of Heroes have found this rule basically impossible to enforce. EBay refuses to enforce other sites' terms of service violations, so you can find plenty of auctioneers in both games willing to basically convert cash to in-game currency and/or sell items. I'm not the only one who hates this. The guys at Penny Arcade wrote the best metaphor for why this is bad for gaming. As they pointed out, under that model, there's no reason why some company couldn't set up a system where all player versus player combat was decided by swipes of your credit card. But thanks to Golias over at Slashdot, it now occurs to me that by officially permitting and sponsoring the exchange of virtual items and virtual cash for real cash and vice versa, in a game where you can take items (and therefore cash) from each other in a competition that mixes skill and luck, and taking their own cut, their percentage as it were, in monthly fees, they have very specifically met the terms of the laws that prohibit online gambling in 49 states. What's more, by operating it interstate, they've very specifically violated the federal law that was designed to punish online casinos.

What's more, now that I think of it, you could pull one heck of an interesting scam by paying for stuff on Station Exchange with your credit card, running up thousands of dollars in bills, and then challenging the charge when it comes in on your bill. Why? Because in all 50 states, it is illegal to loan somebody money for the purpose of gambling. I know this because I was working at The Conspiracy when we got stung by this. Some guy visiting Atlantic City, New Jersey realized that an ATM in a casino lobby would allow cash advances on his credit card, so he took about $5,000 in cash advances out, gambled it all away, and refused to pay because it was money lent for gambling. He won that complaint, and didn't have to pay back that cash advance. Had he actually won money on that loan, he would have been legally entitled to keep it and still not pay off that cash advance. The Conspiracy had to help their members who run ATM networks customize their software specifically so that it would allow multipurpose bank cards to only access debit accounts like checking or savings, not credit cards, when used in any place that permits on premises gambling, and had to make that change in a hurry. So by that same rule, not only has Sony violated US federal and state laws against online gambling, they've also violated their contract with their credit card processor in a way that leaves them very specifically vulnerable to fraudulent charges.