August 22nd, 2005


If virtual goods are actually worth money ...

The more I think about the stuff I was talking about yesterday, the more aspects this grows. We always wondered when the law would catch up with cyberspace. We always assumed that it would take new law. No, once money enters cyberspace, or anything worth actual money, that's the camel's nose entering the tent, and pretty soon, no matter what you intended, you've got the whole camel.

One guy in the Slashdot thread about this mentioned that he actually ran one hypothetical scam past a lawyer. He and a bunch of his friends who had high level characters were discussing the idea of using an auction site to sell high level items to low level characters ... and having an ambush waiting for them so that as soon as they took the item, he and his friends could mug them and take it right back. Since buying the item was as much of a violation of the Terms of Service as anything else, the victim couldn't complain without getting himself evicted from the game as well. Which raised the question, since this was obviously wrong, would it break any existing laws? He says the lawyer advised him not to risk it, saying that a jury might well convict for fraud.

But here's an example that seems even clearer to me, even though (as they say) I Am Not A Lawyer. One of the open (dirty) secrets of the online gaming world is that many of the people who are selling in-game currency for real cash are using cheats and exploits to get that in-game currency in the first place. Usually it involves duplicating the virtual currency via some trick or hack, or running 3rd party software to unattended "harvest" game currency and items that can be sold. Both of these things are clear violations of the Terms of Service of every game. (Although in Star Wars: Galaxies, that latter is ambiguous. You don't have to run 3rd party software, the in-game scripting system is robust enough to create an automated hunting and harvesting script for your character. The Terms of Service still says, clearly and unambiguously, that this is against the rules. But the company representatives have said in writing in the official forums that it's not against the rules. What's really going on there is they found out how labor-intensive it was to enforce the no-AFK XP and no-AFK harvesting rules and gave up on them, but they don't want to admit that. So for now, let's leave SWG out of it.)

If you cheat a casino out of money, which is most often done by jimmying or fooling slot machines into paying out jackpots, that's theft by deception, both a state crime in the places where casinos are legal and a federal crime. People have tried to argue that they didn't steal cash, only tokens, and the casino freely exchanged the cash for the tokens; this argument has always been laughed out of court. If you cheat an online game out of its virtual currency and then sell that virtual currency for cash, haven't you broken the exact same laws? You cheated a gaming device in a competition that was at least in part supposed to be a contest of luck out of items that you then, using the same gaming device, you exchanged for cash.

If you did this from overseas, there are plenty of places where you'd be relatively safe, because most countries won't extradite to the US for fraud. But if you're in the US, and the gaming company has offices in the US, I don't see how this isn't prosecutable.