Congress Threatening Second Life (and Other Games)? Not for Now...

Someone I follow on Twitter pointed out that a Congressional committee was voting the Unlawful Internet Gambling Enforcement Act's regulation. The badly written law was passed in 2006 to regulate Internet gambling, but because it is fairly vague it would also impact other form of online gaming, including the virtual reality game Second Life, when it begins to be enforced.

Second Life is a multiplayer online game that allows players to live and work in a virtual world. It is the "work" part that raises issues. Second Life has its own money, and that money can be converted into real world money. Under the new law, that would make it a game of skill - like poker, I suppose.

The Unlawful Internet Gambling Enforcement Act evidently places most of the burden of enforcement on banks and other financial institutions. The result is likely to be that those banks will set up barriers to dealing with online gaming as a way of avoiding liability.

For now the issue seems to have been postponed. The House Committee on Financial Services today The Payments System Protection Act (H.R. 6870). If passed into law, that law would "direct the Department of the Treasury and Federal Reserve System, in consultation with the Attorney General, to appoint a special Administrative Law Judge to define the types of unlawful online gambling and conduct an economic impact study on the costs for compliance," according to USNewswire - effectively undermining the Unlawful Internet Gambling Enforcement Act.

In other word, Congress is no longer sure that every game that makes money on the Internet qualifies as gambling...