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DAILY MANIFESTO

Online Video Game Gambling May Become Legal

Posted on Tuesday, December 7 @ 15:29:12 Eastern by


Time for a little history lesson. Back in 2006, US casinos were afraid that online gambling would ruin their profits at the betting table and deter customers from getting off their chairs and walking onto the casino floor. So with some... let's call it... help from Congress, the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) passed at the last minute under the SAFE Port Act in 2006, which was meant to reinforce port security (that's sea ports, not computer ports).

The UIGEA prevents banks from transferring funds to Internet gambling sites with the distinct exception of fantasy sports, online lotteries, and horse/harness racing. Thus we have poker sites and online video game gambling sites base their servers in other countries. Pokerstars, for instance, operates on the Isle of Man in the Irish Sea and has estimated annual revenues of $1 billion dollars. (Source)

In this recession, though, money talks louder than ever. And studies, from people like Mark Clayton of the Nevada Gaming Control Board, have shown that Internet gambling has little impact on people's real-life gambling habits. Thus the casinos are now changing their minds, attempting to get Senate Majority Leader Harry Reid to support a bill legalizing online gambling. (That says something about our political system, but let's not fall into that black hole of a topic for now.)

If a proposed bill like this does go through, with the proper wording, it will likely cause a tremendous shockwave through the video game industry. So far, the whole issue of online gambling has caused many games to tiptoe around potential lawsuits, but that matter would be settled outright. MMO games might then have the absolute legal backing to have real money transactions and have its monetary system (I'm looking at you, EVE Online) accepted as actual currency in The United States. You would not see people trying to do runarounds in the system, like trading in-game goods that may have a supposed cash value in virtual form.

Virtual worlds will have even greater real-world financial impact. (And taxes will become really, really complicated.) There's also the trouble of underage online gambling, gold farming, and creating servers for worlds that don't have gambling within the same game.

Barring any kind of monopoly that a bill like this might have (it's very possible), other countries will start pouring money into the US for online gambling. Imagine the boom of FPS gambling that this might have, let alone for other competitive genres like sports and rhythm games. Most of this would likely be based on the PC platform, but one could imagine Microsoft and Sony getting in on console-based gambling, where players could wager Microsoft Points or straight-up cash.

Certainly, we shouldn't go too far with this kind of speculation, but it seems only a matter of time before the UIGEA is stricken out. Only someone like Mark Methenitis will be able to sort the whole issue out. But in the meantime, I'll be stacking my poker chips... virtually.
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