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I'm in your MMOG, taxing your drops

Rezzealaux
Posts: 2,251
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8/24/2009 8:26:00 PM
Posted: 7 years ago
Something I found today, not exactly new, but something I had never heard about. From Wiki's article on "Virtual Economy", under "Taxation and gambling".:

Income from sale of virtual items is being considered as real revenue as players in such games have ascribed a real-world value onto them: "By taking any aspect of the game and connecting it directly to the real world, the games have only brought this possibility on themselves."[8] And as that ascribed value is being increasingly converted into to real dollars, attention is now being given by those in taxation law and in governments.

Commentators in taxation law speculate "that profits made in virtual worlds could be taxable even before they are withdrawn as dollars."[9] The speculation seems to based on the observation that, as one commentator said, "the easier it is to buy real goods with virtual currency (e.g. order a real life pizza) the more likely the IRS will see exclusively in-world profits as taxable."[10]

This conversion has led to direct comparisons with other on-line games of chance as 'virtual winnings'. Once converted into real currencies these 'winnings' have been measurable for some time in real terms. This is why gamers and companies engaged in this conversion, where it is allowed under license from developers, are now being encouraged to apply for licenses under EU legislation:

Now we've spoken with the gambling commission, and they've said that MMOGs aren't the reason for the act, but they won't say outright, and we've asked directly, that they won't be covered. You can see how these would be ignored at first, but very soon they could be in trouble. It's a risk, but a very easy risk to avoid.[11]

During an interview with Virtual World News, a representative of the British law firm Campbell Hooper stated that, "In the US there seems to be a general blanket ban on gambling. There doesn't seem to be that ban on skill gaming."[11] However, in the EU, skill gaming does fall under the definition of gambling. Compliance in the EU though will likely only require MMOGs "to do what's fair and reasonable in that situation."[11]

When queried about games where there is an 'unofficial secondary market', the representative responded: "Ultimately the point is whether the thing that you win has value in money or money's worth. If it does have value, it could be gambling."[11] So to avoid regulation by these laws, the "operator would need to take reasonable steps to ensure that the rewards they give do not have a monetary value[,]"[11] possibly by demonstrating enforcement of their Terms of Service user agreement prohibiting 'unofficial secondary markets'.

8: http://www.techdirt.com...
9: http://legalblogwatch.typepad.com...
10: http://virtuallyblind.com...
11: http://www.virtualworldsnews.com...

I found this just a little more than outrageous.
: If you weren't new here, you'd know not to feed me such attention. This is like an orgasm in my brain right now. *hehe, my name is in a title, hehe* (http://www.debate.org...)

Just in case I get into some BS with FREEDO again about how he's NOT a narcissist.

"The law is there to destroy evil under the constitutional government."
So... what's there to destroy evil inside of and above the constitutional government?
Rezzealaux
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8/24/2009 8:49:54 PM
Posted: 7 years ago
At 8/24/2009 8:45:49 PM, Puck wrote:
Are purchases generally made via in game economy structures or such things like pay-pal?

From how I understand it, the articles and the wiki section were talking about the other way around. You're talking about buying premium items, the article, I believe, talks about selling in game items for real money.

As for your actual question, every MMORPG has an ingame economy system. Some games have premium items available for sale for real money, through things like Google Checkout or PayPal.
: If you weren't new here, you'd know not to feed me such attention. This is like an orgasm in my brain right now. *hehe, my name is in a title, hehe* (http://www.debate.org...)

Just in case I get into some BS with FREEDO again about how he's NOT a narcissist.

"The law is there to destroy evil under the constitutional government."
So... what's there to destroy evil inside of and above the constitutional government?
Puck
Posts: 6,457
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8/24/2009 8:55:08 PM
Posted: 7 years ago
Ah ok. Thanks. :D Reminds me of how Japanese 'gambling' game areas were run. You won tokens, exchangeable for goods inside, then some guy was outside who would offer to buy that stuff from you. :D
Rezzealaux
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8/25/2009 9:41:52 AM
Posted: 7 years ago
At 8/24/2009 8:56:31 PM, Puck wrote:
Though wouldn't that sort of issue deal with e-bay as well? o.o
I don't understand?
: If you weren't new here, you'd know not to feed me such attention. This is like an orgasm in my brain right now. *hehe, my name is in a title, hehe* (http://www.debate.org...)

Just in case I get into some BS with FREEDO again about how he's NOT a narcissist.

"The law is there to destroy evil under the constitutional government."
So... what's there to destroy evil inside of and above the constitutional government?
Ragnar_Rahl
Posts: 19,297
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8/25/2009 12:34:06 PM
Posted: 7 years ago
With only a few games as exceptions, the government will have about as much luck collecting as they would declaring a tax on pot. In most games, selling the items for RL munehz is a breach of contract.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
Puck
Posts: 6,457
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8/25/2009 10:57:45 PM
Posted: 7 years ago
At 8/25/2009 9:41:52 AM, Rezzealaux wrote:
At 8/24/2009 8:56:31 PM, Puck wrote:
Though wouldn't that sort of issue deal with e-bay as well? o.o
I don't understand?

Taxable income.
Rezzealaux
Posts: 2,251
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8/25/2009 11:10:46 PM
Posted: 7 years ago
At 8/25/2009 10:57:45 PM, Puck wrote:
At 8/25/2009 9:41:52 AM, Rezzealaux wrote:
At 8/24/2009 8:56:31 PM, Puck wrote:
Though wouldn't that sort of issue deal with e-bay as well? o.o
I don't understand?

Taxable income.

They already tax eBay. So I've heard.

One of the articles there said that what's being proposed is taxing before the actual transfer - that is, before translating it from game money to real money - based on the perceived value of the item.
: If you weren't new here, you'd know not to feed me such attention. This is like an orgasm in my brain right now. *hehe, my name is in a title, hehe* (http://www.debate.org...)

Just in case I get into some BS with FREEDO again about how he's NOT a narcissist.

"The law is there to destroy evil under the constitutional government."
So... what's there to destroy evil inside of and above the constitutional government?