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Regulating Virtual
Environments
Foundation of Digital Games Conference,
Raleigh, North Carolina, USA.
30 May 2012

Darryl Woodford,
CCi ARC Centre of Excellence
Queensland University of Technology
dp.woodford@qut.edu.au / @dpwoodford
Wednesday, 30 May 12

Today
Key objectives
Methodology
Why it matters
Founding principles
Preliminary results: Eve & Gambling
Preliminary Conclusions


Key Objectives

Original goal of research was to consider
how we might regulate virtual
environments
Because, eventually, they will be
regulated somehow...


Dispute Resolution

Image: Wikipedia


Admin Perspective
Real world governments

Virtual world admins

Players
Image: IJMC


Key Objectives
Designers know A LOT about what they
intended to happen.
Lawyers know A LOT about what the
written documents say & how to
interpret them.
But NEITHER knows what’s actually
happening in-world.


Method
Original plan: Ethnographic research to
understand Virtual Environments &
what stakeholders wanted.
Began with three environments --
Second Life, Star Trek Online & Eve
Online -- eventually narrowed to Eve for
detailed ethnography.


Eve is Complex

Image: EON Magazine


Method
As project evolved, it became clear that
many of the issues that impacted on
stakeholders (automation, dispute
resolution, appeals etc) were not new.
A comparative with offshore gambling
was worthwhile -- a second ethnographic
site.


Ethnography
Tradition in Game Studies of
Participant Observation Ethnography
(Dibbell, Taylor, Humphreys etc..)
Work throws up as many questions as
answers, and often focuses on
individual aspects of the experience (co-
operative play/design, emotions etc)


Ethnographers...
But how do we study what underlies it
all?
How communities form?
What social standards they create?
How they enforce them?
We need a framework - NORMS...


Norms
Norms are “informal social regularities
that individuals feel obligated to follow
because of an internalized sense of
duty, because of a fear of external non-
legal sanctions, or both” (McAdams,
1997)
Ultimately akin to Ostrom -- what
communities use to regulate themselves.


Why it matters: RMT
Essentially the exchange of bona fide
currency (US$, AUD, GBP) for virtual
currency.
Impacts upon: Fair Play (Cheating),
Design, Economy Balance etc, but
importantly has LEGAL
IMPLICATIONS.


Real Money Trading
To the extent that “It’s just a game” is
ever justified, that argument loses
validity when real money is WON or
LOST, EARNT or STOLEN.
If I lose a sword in MONKEY ISLAND I
might go back to my previous save; if I
lose it in ENTROPIA replacing it may
cost $200+.


Gambling
Virtual Worlds look a lot like gambling
30% of the time the monster drops nothing.
40% of the time it drops Item A, worth $3 on the
market. 25% of the time it drops Item B, worth
$4 on the market. 5% of the time it drops Item
C, worth $15 on the market.
Why is this different than playing a slot
machine in an online casino?


Second Life c. 2007

Image: http://static.pcinpact.com/images/bd/news/45025-second-life-casino.jpg


UIGEA


Second Life 2010


Gambling in Lineage


More closely...


More closely...

http://worldsinmotion.biz/2010/02/neverdie_sells_virtual_egg_for.php


Gambling
Some of it certainly *is* gambling.
Others are just gambling-like, but so are
other things:
Day Trading, Trading Cards, MTG:
Online
But that they’re similar perhaps means
we can learn something.


Similarities
Geographical Disparity
Terms of Service enforcement problems.
Potential for disputes -- player vs player,
player vs provider.
Strength of community: knowledge of
mishandled issues travels fast in both
environments.


Findings: Eve Online
Community agrees:
RMT should be prevented.
Mining (to the extent people like it at
all) should be limited to manual
methods - not automated.
But somebody always disagrees -
defining norms can be difficult.


Not everyone agrees


CCP’s enforcement has improved in
recent months, but still evidence of it.


Regulation Options:


Regulation Options:
Governmental:


Regulation Options:
Governmental: Player power:


SBR
The sportsbook mediator SBR was my
chosen comparative; they also deal
occasionally with poker & casino
disputes.
Lots went before: TheRX, Majorwager,
TOW, EOG; Forums, Mediation Panels,
News & Rankings.


The past
More detail if interested but in
summary:
Forum-based regulation worked for a while,
whilst internet & industry boomed.
Problems started when they started relying
on advertising.
Mediation panels lost traction after US F1
GP Dispute w / Olympic.


SBR Model
Players submit dispute. SBR attempt to
resolve with book behind scenes. Report
back to community via news wire.
Has evolved over the years. Some
disputes are raised in public first
(opinion: lower & resolved).
Communication now includes forums,
video.


SBR Model
What hasn’t changed is that this
amounts to REPUTATIONAL
REGULATION.
A negative report from SBR is enough to
impact upon your business.
Any different from how gaming media
covered ‘Greed is Good’ or Mittani?


Preliminary Conclusion

Many of the disputes we see in VW’s
would not be new to observers from the
gambling industry.
Automation happens in virtual
environments just as it has in poker /
video poker / slots / blackjack.


Code has bugs that allow players to
gain an advantage just as sportsbooks
have long had code that accepted
correlated parlays.
Enforcement is not always simple, and
over-enforcement is possible. Players
need a way to resolve this. “God”
argument increasingly losing value.


The models that worked (and did not)
in the offshore gambling industry are
worth considering
No reason to repeat the same mistakes.
Courts an ultimate remedy, but perhaps
not the first.
Why wait a year vs a week?


Future: #tweetfleet


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Regulating Virtual Environments

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