The French government has proposed a new law regarding gambling. The idea is that sports have "betting rights" that they can sell. Unless they sell or otherwise release those rights, you can't bet on that sport.
Does this have potential implications for virtual worlds?
Very few sports are built around the concept of gambling. Horse racing is perhaps the most noteworthy, as it exists primarily to offer gamblers events upon which to gamble. As a consequence, horse racing is geared primarily around gambling, not around spectating.
The vast majority of sports are not geared around gambling. Nevertheless, people gamble on them anyway. This leads to situations in which players do something sporting, such as conceding a putt in golf, that costs gamblers money. Or, alternatively, that wins gamblers money they might not have won otherwise.
The French government have put forward a law, which has just been approved in principle by the European Commission, that allows sports to protect their integrity. It gives the governing bodies of each sport "betting rights". If they hold onto these rights, no-one can place a bet on any competitions related to the sport. If they release these rights, then they will gain money (a cut of the gambling revenue), but will have to monitor every aspect of play more closely in order to ensure that events are not rigged. That's how I think it works, anyway...
This appeal to the "integrity" of sports is interesting. Why stop at sports? Why stop at gambling?
Suppose that virtual worlds had "commodification rights". If they held onto these rights, no-one could buy or sell their virtual goods except within the context of the virtual world (so buying for in-world gold is fine, but for out-of-world gold is not fine). If they released them, then people could trade in these goods and the operators would get a share of the revenue so generated; in return, they would be required to ensure that the goods were fit to be traded (meaning compensation for nerfs?).
This sounds a lot like Ted Castranova's interration concept implemented using a different mechanism.
What do you think? Would it work? I don't mean would any government do it right now, I mean would it work?
Richard
Professional sports organizations should love something like this, right? I haven't looked past what you've posted, but it sounds like they get a cut of gambling profits w/o having to do much in return. Who wouldn't like a handout like that? It's unclear how it promotes the public welfare, but it isn't clear how gambling promotes the public welfare in any case.
I would expect (again not knowing the details) that enforcement would fall into private hands, along the lines of an IP right, so that sports firms will target the larger gambling firms and make their way down to smaller venues.
Tying this to virtual worlds, while the general idea of an anti-commodification rights fits pretty well, the analogy starts breaking down when you get more granular. E.g., sports firms can't just cancel the accounts of gamblers and make their assets disappear. Private gambling doesn't tax the system or create much in the way of a nuisance to the sport venue or the other fans. Transfer of property interests isn't the same as chance-based wagers. Etc.
But there are certainly details that map -- e.g. the impossibility of total control over 2-party parking lot RMT seems to map well to the impossibility of stopping 2-party parking lot bets. Good luck trying to get a cut of those.
Of course, if I wanted to give an well-informed response, I'd look at the details of the French proposal. :-)
Posted by: greglas | Sep 24, 2009 at 08:11
After submitting my e-mail to be spammed by gambling compliance newsletters, I managed to read the French proposal...
My opinion is that the legislation is completely unenforceable, but will probably have limited impact on the domestic sector. Just look at the US, where online gambling is supposedly banned, and the plethora of (huge) venues in Costa Rica, Antigua and so forth dedicated to serving them, and continuing to do so regardless of the UIGEA etc..
Yes there are lots of things they *could* do, IP block them like the Danish ISP tried with Pirate Bay, but in doing that you kick up a whole new range of issues, and people find ways around it anyhow.
I would suspect the same to be the case with games, you can control perhaps the immediate market in Europe, or the US, or wherever, but what do you do when an operator sets up in Costa Rica whose government and judiciary laughs in your face when you try to sue them?
My guess is you'd end up in the same situation as you are now, where companies do their 'best' to stop commodification if they don't want it, but a black market exists anyway.
Posted by: Darryl Woodford | Sep 24, 2009 at 15:17
greglas>Professional sports organizations should love something like this, right?
Well, yes and no. They may love the money but they may not love the duties that would come if they accept it.
>it sounds like they get a cut of gambling profits w/o having to do much in return.
I think they probably would have to do something in return. They'd have to make sure that none of the participants were doing anything to fix bets (eg. two members of opposing soccer teams collaborating to ensure there was a throw-in in the 19th minute, which has happened), which means that anything done for reasons of good sportsmanship could be disallowed (eg. conceding putts). It could also mean things done for reasons of bad sportsmanship would be treated more harshly, eg. making out you've been fouled when you haven't.
>It's unclear how it promotes the public welfare, but it isn't clear how gambling promotes the public welfare in any case.
Well the idea seems to be that if people are going to gamble, then what they gamble on should be fair. Likewise, the people whose activities are being gambled on should not feel pressured to change the way they behave in order to conform to rules set external to their sport by gamblers.
Example, yesterday a British cyclist lost the chain to his bike while in 3rd position. His support vehicle was trapped behind other vehicles, and couldn't get to him before he lost 3rd place. He was so annoyed when he realised he was going to lose his bronze medal that he threw his bike to the ground and walked off. This is within the rules of his sport. However, it meant that people who had a spread bet on him were going to lose big time. He could have waited and got back on his bike and come 4th or 5th and then they wouldn't have lost. If the sport had OKed gambling, would he perhaps have had to do so?
>Private gambling doesn't tax the system or create much in the way of a nuisance to the sport venue or the other fans.
It does have an effect on the system. There have been many occasions where participants in sports have changed their behaviour to try influence results. Sometimes, these have brought down the full weight of the law (we had such a case in the UK in the 1990s where a goalkeeper kept missing shots he "could have" saved in crucial matches). The problem is, they're very hard to prove (the goalkeeper in question was cleared because jury members couldn't agree).
What the French authorities seem to be saying is that rather than have the police try to deal with corruption, either the sport itself should do it or the police should try to remove the reason for the corruption (the gambling).
>But there are certainly details that map -- e.g. the impossibility of total control over 2-party parking lot RMT seems to map well to the impossibility of stopping 2-party parking lot bets.
This is where it breaks down, yes, but the aim wouldn't be to stop the petty gamblers/RMTers so much as the large, organised rings.
>Of course, if I wanted to give an well-informed response, I'd look at the details of the French proposal. :-)
Richard
Posted by: Richard Bartle | Sep 25, 2009 at 08:55
Darryl>After submitting my e-mail to be spammed by gambling compliance newsletters, I managed to read the French proposal...
Ooh! Where did you find it?
>My opinion is that the legislation is completely unenforceable, but will probably have limited impact on the domestic sector.
My guess is that it's aimed at the larger bookmakers, not the little guys. Well, the larger ones in Europe - I doubt the people in Thailand are going to care about it...
>but in doing that you kick up a whole new range of issues, and people find ways around it anyhow.
You do, but at each stage there are fewer people to deal with. Yes, some will find ways round it, but a lot won't; you therefore do cut down gambling, you just don't cut it out.
>but what do you do when an operator sets up in Costa Rica whose government and judiciary laughs in your face when you try to sue them?
You sue the users who bought the product. In a gambling context, you'd prosecute the punters; in a virtual worlds context, you'd prosecute the gold-buyers.
I would guess that police would be reluctant to do this (with drugs, they target dealers in preference to users; it depends on whether they think gold-buyers are "victims" or not).
>My guess is you'd end up in the same situation as you are now, where companies do their 'best' to stop commodification if they don't want it, but a black market exists anyway.
Or they could accept it and take a share of the revenue.
Richard
Posted by: Richard Bartle | Sep 25, 2009 at 09:02
Interration is rapidly coming towards us, but this approaches the situation from an entirely different perspective.
If you look at a website like Second Life, where the real-world I.P. rights to virtual products are clearly given to the creator of the content, it would be the creator of a virtual casino who provides rights to gamble. New games will evolve through the virtual world, each with their own unique set of creator-controlled rights: Just look at Second Life's "Tringo."
Since my experience in virtual worlds has turned up relatively little real-world event gambling (the immersive aspect lends itself much more to the creation of novel 'sports' on which to gamble, I struggle to see how the French law could affect the virtual world beyond providing another set of salable rights to content creators.
I'm hoping to cover this on my virtual worlds policy blog - it's served as an interesting jumping-off point for a unique question.
Posted by: PixPol | Sep 25, 2009 at 11:26
PixPol> struggle to see how the French law could affect the virtual world beyond providing another set of salable rights to content creators.
It's by analogy. Basically, the French gambling law is following two lines of argument that lead to the same conclusion:
1a) There should be safeguards to protect people from gambling on sporting contests that are fixed.
1b) The organisations best placed to ensure this are the ruling bodies of sports.
1c) The ruling bodies may have to change the rules of their sport to protect gamblers from fixed contests.
1d) Organisations not willing to change their rules can not protect gamblers from fixed contests.
1e) Therefore, for such organisations gambling on their contests should be prohibited.
2a) There should be safeguards to protect sporting contests from gamblers wishing to fix them.
2b) The organisations best placed to ensure this are the police.
2c) The police have great difficulty proving cases of match-rigging.
2d) A much easier way to stop gamblers from fixing sporting contests would be to stop gambling on those contests.
2e) Some sporting organisations are more badly hurt by match-rigging than others.
1e) Therefore, for such organisations gambling on their contests should be prohibited.
For virtual worlds, we can rewrite these lines of argument in terms of commodification:
1a) There should be safeguards to protect people from being ripped off by gold farmers.
1b) The organisations best placed to ensure this are the developers.
1c) The developers may have to change the rules of their virtual worlds to protect players from fraudulent gold farmers.
1d) Developers not willing to change their rules can not protect players from being ripped off.
2f) Therefore, for such virtual worlds gold farming should be prohibited.
2a) There should be safeguards to protect virtual worlds from groups wishing to farm them.
2b) The organisations best placed to ensure this are the police.
2c) The police have great difficulty proving cases of gold farming.
2d) A much easier way to stop farmers from exploiting virtual worlds would be to stop gold sales (RMT) for those virtual worlds.
2e) Some virtual worlds are more badly hurt by RMT than others.
2f) Therefore, for such organisations RMT should be prohibited.
As Greg says, it's not a complete match. Nevertheless, there are enough similarities. What it comes down to is that the French government sees gambling as a corrupting influence on some sports, but it doesn't want to ban it outright because for other sports it's integral to what they are. They therefore propose to allow the sports concerned to decide whether to allow gambling on them or not.
For virtual worlds, an argument could be made that RMT is a corrupting influence on some, but integral to others. The proposal in this case would be to allow the virtual world to decide whether to allow RMT or not.
Richard
Posted by: Richard Bartle | Sep 25, 2009 at 12:52
Richard,
On that point we're in agreement - the developer of the virtual world has to have ultimate authority to decide whether RMT is allowed.
With the way we seem to be approaching a merger of the synthetic and the real (I look at Zynga and its tens of millions of dollars in revenue from micro-transactions back and forth) I personally don't see how worlds will remain insulated from the pressing of real-world commerce much longer.
I say that only because synthetic worlds that accept RMT are going to have a major competitive advantage if RMT continues to grow. They'll spend less effort pursuing illicit traders and they'll be able to take a cut of the proceeds, much like Linden Lab.
By the way, Richard, the work you have in "The State of Play," along with Dr. Castronova's pioneering work, inspired me to pursue this field as a serious career ambition. I just wanted to take the opportunity to say thanks.
Posted by: PixPol | Sep 25, 2009 at 15:03
Very usefull post, I agree with Richard.
Posted by: JJ | Sep 26, 2009 at 04:31
PixPol>On that point we're in agreement - the developer of the virtual world has to have ultimate authority to decide whether RMT is allowed.
The question then becomes, what can they do when they decide it isn't allowed but it happens anyway?
>I personally don't see how worlds will remain insulated from the pressing of real-world commerce much longer.
When the virtual becomes just an adjunct to the real, yes, in those circumstances commerce will be a natural thing. Game worlds will be dwarfed by non-game worlds, and consequently be regarded as something of a niche. You'd be as surprised to find that you couldn't buy something with real money in virtual worlds as you would to find you couldn't buy a coffee in Starbucks.
However, there will still be game worlds, and some of these will still have reasons to prohibit the buying and selling of their virtual objects for real money.
>I say that only because synthetic worlds that accept RMT are going to have a major competitive advantage if RMT continues to grow.
Well, they'll have more money; however, if it comes at the price of having less game, perhaps it wouldn't be an advantage?
>They'll spend less effort pursuing illicit traders and they'll be able to take a cut of the proceeds, much like Linden Lab.
But they may lose players if they do this.
As an analogy, if world sporting bodies spent less time pursuing cheats by allowing competitors to take drugs, from which they received a cut, then they would have much more money to spend on facilities and so on. However, if they did do that then they would lose competitors who regard drugs as "cheating" - even if the rules were changed so that they were explicitly allowed.
There will always be players who consider RMT a bad thing, and who will seek to find virtual worlds where it is proscribed. For these players, a subscription-based MMO has a competitive advantage. In the great scheme of these, these people will be outnumbered by the majority, who don't actually want to play games (or aren't able to) the whole time. In absolute terms, though, it will still involve a substantial number of people.
>By the way, Richard, the work you have in "The State of Play," along with Dr. Castronova's pioneering work, inspired me to pursue this field as a serious career ambition. I just wanted to take the opportunity to say thanks.
Aw shucks, hey, you're welcome!
Richard
Posted by: Richard Bartle | Sep 26, 2009 at 07:07
Richard -- I meant the summary of the legislation on the link you provided - it was registration only.
An interesting response from the betting industry on some similar proposals here: http://www.guardian.co.uk/sport/blog/2009/sep/28/betting-sport-betfair-levy
Posted by: Darryl Woodford | Oct 02, 2009 at 10:44
Darryl>An interesting response from the betting industry on some similar proposals
Hmm, well they make quite a strong case there (not that making strong cases has ever stopped governments from doing what they think voters will like!).
Richard
Posted by: Richard Bartle | Oct 04, 2009 at 05:11
Good post, thanks for the information!
Posted by: Diana211 | Oct 08, 2009 at 02:55
This is an interesting concept, comparing real world games and gambling to VWs and gold farming. However the way I see it, it only makes sense to apply these "illicit trading" or "gold farming" rules to games that have already made mistakes (or pioneered, if you like) creating economies and mechanics susceptible to farming and bots.
Sports games like football and racing have been around forever, so laws like this make sense on some levels, they can't make a new world cup league or a new F1 so easily. Digital games are a bit different in this regard.
Three or so generations of VWs have been released. Developers looking to come out with a new game should be able to tell if the model they have chosen to use will be something that the gold-sellers will profit from. They simply cannot use the "oh gosh we didn't know that would happen, that's bad, we don't allow it" response anymore (yet they all still do). If the game requires time above all else, if the game never "ends", and there is some type of economy, the farmers will be all over it; its just a fact. It should be common sense to the developers in such a case (if they must have their game structured this way) to make their virtual currency exchangeable with that of the real world. It seems to be the only way to make such a game work without outside interference.
A skill based VW (if such a thing exists) like Tetris Online (I just made that up) where the world is one huge puzzle going 24/7 until players actually succeed or fail and "finish" the game after a certain period (months?) of time well, that doesn't appear to need rules like this.
I guess overall what I'm saying is that the developer should know, though history and testing, what type of attention the game will get by 3rd parties intending to profit. Those who made the rules for horse racing knew that their game would be bet on, or at least they modified the rules after they found that gambling and racing went together. So, VW developers should know too; have the balls to man up to the facts instead of hiding behind excuses, eulas, and empty threats, all the while passively allowing the violations to occur.
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