612 Lawns

What at first was plunder assumed the softer name of revenue.
~Thomas Paine

When is lying illegal?

That's a fundamental question in any system of laws. If you and I agree that you'll give me a dollar, and in return I'll give you two back later, we have a contract. If I skip town, I have committed a crime: fraud. It's the most basic of crimes, and simply boils down to lying. Of course, there are a thousand ways to lie and be nothing more than a cad. If I tell you I'm a lousy pool player, we bet a dollar on a game, and it turns out I'm better than you, you're a sucker, I'm a con artist, and there's been no crime. Yes, I misrepresented myself, but it was a matter of judgment, not fact.

And there are plenty of cases where lying is a sanctioned risk. If we play a poker tournament -- a legally constructed one, regulated by our fine system of government -- it's not only acceptable to lie, it's expected. The card player who fails to lie effectively will almost always lose. It's a condition of the game.

Consider if you will, Eve Online.

Last, week, Dentara Rast -- a character in CCP's Eve Online massively multiplayer online world -- pulled off an impressive stunt. He ran a classic Ponzi scheme and walked off with 700 billion ISK (in game money, and quite a lot of it). Normally, this kind of in-game bravado would generate nothing but a confuse stare from someone not deep inside the Eve universe, and little more than scandal-of-the-week titillation and subsequent yawns there. But I believe this case is more interesting than that.

I believe Dentara Rast committed fraud.
I believe he owes the IRS a lot of money.

Admittedly these are bold statements likely stuffed with straw, but they have deep implications, and bear argument.

The Scene of the Crime

Eve Online is a unique persistent world. It's the only successful, long term Science Fiction world. Science Fiction is hard. As our friends-in-spirit at 2d6 feet posited recently, it's harder because of the details. Fantasy worlds have extensive shorthand. Toss me into a quasi-medieval setting, tell me there are elves and magic, and I've got a whole library in my head to fill in the blanks. But in a science fiction world, you need to tell me a LOT more. Are there aliens? What do they look like? What's the technology do? What does a spaceship look like, and how does it work? What are the moral codes and motivations?

Is there money?

It's a real question. The two largest competing SF universes have radically different answers. Star Wars' Han Solo works for cash. We see him loading the Millennium Falcon with crates of the stuff. His world is filled with the crimes of acquisition. Star Trek's James. T Kirk lives in a universe that grew beyond the need for commerce. It's never explained in great detail, but some sort of vast communism or invisible spirit guides the known worlds of the Federation.

Eve takes the Star Wars route. Money isn't only important, it's everything. Piracy and scheming drive most of the Player-vs-Player (PVP) interactions, and PvP is what Eve is all about. Eve embraces capitalism in a way that goes far beyond the auction houses and crafting of World of Warcraft. Eve embeds the idea of a corporation into the roots of the game. A corporation, by definition, is an entity created to act like an individual person in a marketplace. Anywhere from one to an infinite number of biological individuals create a commune of ownership, and drive that new fictional individual towards a common goal.

In Eve, corporations are formed, engage in exploration, exploitation and extermination in the pursuit of wealth for their members. Thanks to the efforts of a dedicated community, corporations can create initial public offerings to grab new investors. Most often these public corporations are formed to pool the capital required to purchase the blueprints for the games most powerful ships. These blueprints can then be copied and sold, generating cash for dividends. Shares can be traded on the open market, portfolios managed, speculations made.

This user-controlled market is entirely unregulated. Eve is a pocket universe for students of unfettered capitalism. As one would expect, there are good actors and bad actors.

And it's the bad actors that are interesting. Financial scams have an easy time of it in Eve. Anything beyond a simple purchase involves a transfer of wealth between players. Someone has to give a real person in-game cash to buy something -- in this case shares in a corporation. And once that money's sitting in the corporate account, the CEO can just transfer that wealth to an alternate character, and disappear. There is no SEC to go after the bad guy. There is no court in which to make an accusation and seek recompense.

CCP is well aware that they have created a world where bad actors can thrive. Their own FAQ makes this clear:

"A scam is the act of obtaining goods from other players through misinformation, confusion, pressure or by taking advantage of basic trust. Players enter into business dealings with others at their own risk and are strongly urged to exercise good judgment and common sense when trading. Scams that relate to issues such as password scams or account theft scams are more serious and will result in an immediate ban."

The Offense

But if you're playing for fame, not just fortune, you need to put on a show. This is where Dentara Rask made good theater. His scheme was interesting, but unoriginal. He ran the EVE Investment Bank, in which he promised a return on deposits. And he delivered. If you got in early, he paid you your return, and most likely, you reinvested. It was, of course, just a Ponzi scheme. Investors were paid out of the capital from new investors. When the pyramid become too big to manage, he pulled back the curtain and proclaimed himself the victor. He'd amassed more than 700 billion ISK (in game cash), perhaps 10 times the previous record for a market scam. He gloated in the forums about his prowess. He basked in the glory of hatred, even posting a video confession complete with I'd-like-to-thank-the-academy antics. He took out a bounty on his own head, so people would hunt him down. The act of me writing about this plays further into the ego trip.

But there's a catch. What if he committed a real crime?

If this was a "real world" scam, few would argue that this was fraud. In the US (and we don't know where he lives) he would mostly likely be guilty of racketeering under RICO.

The first argument against the fraud case is one of substance. After all, this was imaginary money, right? Not really. Eve ISK is a fungible asset. While no regulated market exists for converting ISK into cash directly, there are markets available. CCP sells 30 day time cards for 120 million ISK. Time cards are available legally for $14 a piece. So the implied value of an ISK is roughly $1.17E-07. Put another way, that 700 billion ISK is worth 5,834 time cards, or $81,667. (A figure worthy of note, as it bumps the value up into the realm of the money laundering -- a swiss-army-knife-meets-sledgehammer of a law if ever there was one.)

The second argument is that somehow this path of conversion is illegal, and thus in itself not a crime. This is spurious: fraud does not require the underlying transaction to be in legal goods. If I bilk you on a drug deal, I still committed fraud, I'll just never sue you for it.

The third argument is that according to the EULA for the game, CCP retains ownership of all in game assets. Note that this is not a law, this is an agreement between CCP and an individual player, and I don't believe it frankly matters what CCP claims, as long as the market exists to convert the in game assets into real world assets (which it clearly does). CCP can ban you for it, they could even sue you for copyright violation, but none of this matters to the fraud argument.

The last remaining argument is that of poker: implied consent. Did the players who lost money to Dentara Rast enter into the transaction with an implied consent to be deceived as part of the game? Honestly, I don't think there's a clear cut answer. Certainly, CCP admits that scams can happen as part of the game. They denounce them in public forums, but they also make it clear that whether they do anything about them is a decision they will make on a case by case basis. They have, in the past, made victims whole. This is clearly different than a poker bluff -- I don't believe that the Bellagio has ever given a penny back to a loser at their poker tables. At least not me.

My opinion (and no, I'm not a lawyer) -- there's at least a case for fraud.

The Punishment

The second major issue here is taxation. Taxing in-game earnings isn't remotely a new idea, and a bevy of academics are already front-running the IRS.

The logic is simple in concept (if complex in application). Dentara has acquired wealth – as clearly as Al Capone acquired wealth in his bank accounts and rum-running operations. The IRS doesn't particularly care if that wealth is US currency or not (Topic 140). If I work for a company who pays me in gold bars or candy bars, I still got paid, and I still owe taxes. Remember, the IRS did threaten to assess whomever caught McGuire's 62nd home run ball, and it took the White House to calm them down.

The fact that this wealth, if converted into US dollars, would crash the real-world market for ISK or game time cards is also irrelevant -- just ask anyone who excercised a non-qualified stock options at the end of the dotcom boom. The alternative minimum tax caused people to sell their houses to pay taxes on worthless stock.

Dentara's only real defense would be one of recognition. If he hangs onto the ISK, never converting them into a more tangible asset, he could argue that he had not yet realized any gain or income on which he could be taxed. He would argue that -- at most -- he had a taxable gain on the difference between his investment (the amount he has paid to CCP as an Eve Online customer) and his return (the $81,666), and as a capital gain, it shouldn't be payable until the asset is sold.

He might win that argument. And should he choose never to sell on the open market or convert into game time cards, he might avoid all taxes. The reality is that the IRS has remained relatively silent on the issue of in-game earnings, but I don't expect that to last long.

He might, in fact, owe the IRS $12,250. Or, if the IRS was feeling particularly frisky, they might see this as self-employment income and hit him up for $15,077 (assuming he's otherwise unemployed).

How are these two issues connected: fraud and taxation? While the IRS has so far declined to pursue virtual earnings, they've been known to be spurred into action when faced with criminal activity outside the realm of tax evasion. Frank Wilson only grabbed on to Al Capone's leg after the FBI was unable to bring him down on prohibition charges. If Dentara was actually pursued under RICO, the FBI might be inclined to use the tax-hammer once again, as rounding up injured parties to testify in a fraud case could be exceptionally difficult. And once the FBI walks into the room, everyone pays attention -- not just Business Week and Terra Nova.

Imagine a world where this happens. Where someone drops the dime on Dentara Rask (hey, there is a 15% bounty on tax evaders), and he has to cough up the dough. Imagine the implications. Whole genres of gaming now become taxable activities. Does Blizzard establish two sets of servers: one where you can transfer accounts and assets, one where you can't? Does over-the-air television start generating an implied receipt of a good, and thus trigger a gift tax? Can a hacker who downs your server now be the subject of a class action suit for all those "workers" denied their place of employment? Do I owe someone money because I listen to Pandora all day long and have never paid a dime?

And what if Dentara Rast is underage? Has CCP somehow violated child labor laws? It doesn't really matter, the IRS will still want their pound of flesh. The tax man must be paid.

The going rate in my neighborhood is $20 for a small front lawn by a entrepreneurial teenager.

Best case, this kid's got 612 lawns to go.

Comments

Wow. I mean, seriously. Wow.

It seems to me that scamming people is part of the game and he was acting within the rules. If people don't want to be part of a game where scamming is accepted then they should quit playing.

If we moved to a Fair Tax system then the complicated tax issue would be moot.

Fascinating read.

Great article rabbitt. I read one figure that the amount of "real" money this guy got away with was over $100,000 (based on EBAY rates for purchasing ISK). It is fascinating to watch how the in game economy of EVE keeps evolving and how CCP is hands off on it.

I read those reports too, but they were based on a notional sale of ISK on ebay at the prices assigned to small trades. There's little question he couldn't dump his ISK that way and keep the prices that high, so I opted to focus on the actual marked trade for cards.

I don't like what the guy did either, but the idea of the IRS appraising online "possessions" and taxing them is utterly chilling. And I say this as a guy who doesn't even play MMORPG's anymore.

Very nice article rabbit. I do wonder when the IRS will get involved with MMO's and figure some way of taxing them. I think it might be too hard to tax each individual player though, so I wouldn't be too surpized to see them taxing all the different companies based on the number of subsribers in the country and then just having the companies figure out how to "trickle" down that taxation to the base subscribtion cost. This of course bring up the issue of costing the light players more per hour then the hardcore players (who are the ones that would be more likely to be earning real money from games anyway). I forsee lots of problems unless the MMO specifically allows for a legal exchange rate, which I do see happening in the near future. Then its just a question of what type of income is it.

One intersting aspect of the way you converted the isk to dollars vs. the e-bay way. It seems like you could make money just by buying gamecards with $, selling them ingame for the isk, then re-selling the isk for $ on e-bay. A new type of commodtty trading.

Anyone dumb enough to fall for a pyramid scheme, especially one on EVE Online, deserves to be seperated from their virtual money. EVE Online is all about corporate espioniage and backstabbing.

One note, he cannot legally sell the money on eBay. He can use the money to purchase "GTC"s or Game Time Cards ingame. They are going for 90-120 million for a 30 day card at the moment. If he tried to sell huge chunks of money to people for real money the admins could block the in-game transfer and even suspend the selling account. So much for the 800 billion ISK.

This is an incredibly stupid article.

Hundreds or thousands of players in EVE take their enjoyment from acting as pirates. Destroying whatever and whoever they can, for financial gain (in-game) or just for fun. Should they be prosecuted legally?

What this guy did is no different. What he did is not some kind of manipulation or exploitation of the game, it's THE POINT of the game.

Playing chess involves managing your pieces on the board. Playing EVE involves managing your money, perhaps establishing trade routes, defending yourself, etc. If your king dies in chess, you've just lost. It happens.

If you fell for this guy's scam, you've just lost. It happens.

If you fell for this guy's scam, you've just lost. It happens.

I must have missed the part in the article where rabbit mentions that he fell for the scam. I'd just assumed that he had lighted upon a juicy story that he wanted to share with our readers. After all, not all Internet journalism is a matter of personal vendetta, you know. Or did you mean "you" in a general sense? (Damn English and its lack of extremely specific pronouns.)

That being said, I find curious the fervor with which you defend Eve's in-game fraud and piracy. It sounds like a really fascinating game, if the players themselves are not offended by Dentara's actions but instead condone them (forgive for assuming you found this article through an EVE Online or associated forum, since you've only just signed up at GWJ). Honest question: If this type of fraud is acceptable, even expected, why would anyone give anyone else money in the game, then? Why would anyone be willingly defrauded?

Interesting article. Eve is a fascinating universe and the economy is one of the reasons for this.

Does anybody really know how much this guy scammed? I have yet to read any proof that he actually made off with 700 billion ISK. If he lied once, I certainly wouldn't put it past him to lie again.

I'm not a tax lawyer either but I just don't see this as any sort of tangible income. He can't pay his rent, buy his food or obtain any goods or services with his ISK. It is an arbritary unit with no agreed upon or legally established real-world real value. Now, if he decided to start selling his ISK on ebay for hard currency, I can agree that that would qualify as income and should be taxable. However, from what I understand, that goes against the legal agreement he entered into with CCP. As a result, I'm not sure there is a legal way for him to profit from this.

Show me the money!

Honest question: If this type of fraud is acceptable, even expected, why would anyone give anyone else money in the game, then? Why would anyone be willingly defrauded?

Eve is just like real life; there are those you trust and those you don't. Sometimes those you think you trust turn out to be those you shouldn't have trusted. It happens in Eve and it happens all the time in the real world.

Copingsaw wrote:
Honest question: If this type of fraud is acceptable, even expected, why would anyone give anyone else money in the game, then? Why would anyone be willingly defrauded?

Eve is just like real life; there are those you trust and those you don't. Sometimes those you think you trust turn out to be those you shouldn't have trusted. It happens in Eve and it happens all the time in the real world.

But in the real world, we have laws in place to protect people from fraud, to punish those who commit fraud, and to assist victims of fraud with getting their lives back together. Our economy is structured on the assumption that the person you are doing business with is an honest person. However, in Eve, just from our limited discussion here it sounds to me like everyone assumes that everyone else is a scam artist. If that assumption is true, then how can anyone ever make any ISK (or whatever they call it in game)? Why would I ever want to give my money to someone who I know is going to screw me over the first chance he gets?

Interesting subject matter but the hypothesis seems silly. ISK, gold, whatever in-game currency you wish to talk about, none of it in itself has intrinsic real-life value. You cannot use ISK to purchase groceries. You cannot pay your electric bill in WoW gold. Sure, it is possible to convert these "assets" into real world money by selling them to people who have decided that they are worth a certain amount of real-life money.

But the idea that real-life fraud can be (and has been) perpetrated with a "virtual asset" that, in itself, has no intrinsic value whatsoever outside of the virtual game environment, and is not governed by real-world laws, seems preposterous. Some might argue, "But I spent X amount of days/weeks/years of hard work earning that ISK/gold/etc, so it counts as real wealth." Well, consider the following: If I asked you to do some work for me, and offered to pay you in magic beans, or old corn cobs, or anything else with no intrinsic value (just like ISK, virtual gold, etc.), and you agreed that such payment would be acceptable return for your time and effort, then that seems to me to be the same thing as deciding to spend time playing a video game and being rewarded in (or defrauded of) ISK - which, outside of the virtual world, is worthless, and thus should not have any associations with real-life tax laws or fraud or any of that stuff that applies to real-world money that DOES have intrinsic value.

I'm not a lawyer or an economist either, but in my opinion it simply isn't a real currency, and should not be treated as one. Selling virtual currency for real currency changes the equation a bit, but it still amounts to something like selling magic beans to people who are willing to pay for magic beans. And since ISK (or other game currencies) does not have intrinsic value, and therefore real world laws ought not to apply to it, it really doesn't seem like it should matter whether or not the goods were "ill-gotten", within the game.

Besides, who wants to play a game and fear being legally prosecuted?? Games are supposed to be a fun, liberating escape from the real world. People play games like this because it is fun to take on a role or a character that you would otherwise not be able to in real life for various reasons. You should not have to worry about going to jail or paying real-life fines from your virtual character's actions in a virtual world that is built purely for entertainment and nothing else. Peoples' attitudes towards MMO gaming may be partly at fault here. A lot of people seem to more and more regard these video games as "jobs" and consider their gold/ISK/whatever "wages" of a kind. Perhaps some serious lightening-up is in order.

Quintin_Stone wrote:

I don't like what the guy did either, but the idea of the IRS appraising online "possessions" and taxing them is utterly chilling.

I don't see it as chilling. Not cost effective. Not a good idea. But if you're making property , tangible or not, and then selling it, it's not unusual for the government to take a piece of the action.

Despite jhickner's utter lack of manners, he may have a point in that part of the mechanics of EVE are to beat the other players through less-than-friendly means such as piracy. This is a point that was acknowleged by the article, however, with the comparison to Poker. I suppose the issue comes down to one's philosophy about the appropriate way to play the game.

I once played a game of Diplomacy with some extremely moral Baptist friends. Before we started, one of them gave me fair warning (complete with his natural, thick-as-molasses drawl): "Now, if I LIE to you, it's only in the context of the game."

I don't know how honest any business really is. It always comes down to someone having a bias towards selling a certain product or service over others, for their own financial gain. Sure, they can't misrepresent their product entirely, but beyond that... how can a salesman ever distance themself from the need to sell their product.

The contract is the key to all real business. Regardless of the quality of the items being transacted, the sales contract, verbal or written, clearly identifies the responsibilities of the buyer and seller. Even with a contract, all kinds of crazy things can occur.

I just take the age old adage to the extreme, to limit my exposure in any transaction....

Buyer beware.

A short statement that has imparted a lot of wisdom and truth all the way back to the days barter was adopted and currency was first invented.

KaterinLHC wrote:

However, in Eve, just from our limited discussion here it sounds to me like everyone assumes that everyone else is a scam artist. If that assumption is true, then how can anyone ever make any ISK (or whatever they call it in game)? Why would I ever want to give my money to someone who I know is going to screw me over the first chance he gets?

you do assume everyone else is a scam artist. it's pretty cutthroat. scams like this have been part of eve since day one. if you're a player and you get scammed like this, you kind of deserve it, and you'll find few eve online players who think differently.

eve is not "the real world". its laws and protections don't apply. the only thing protecting a player in the game is research (imo, reading the forums are an integral part of being successful in-game) and street smarts. a few people i know invested in this scam early on; i promptly told them they were suckers since no regulatory bodies exist to prevent fraud should it turn out to be a scam. i still have my money, they don't.

the beauty of this game (sorry if i sound fan-boyish here) is that scenarios like this are completely user-created. players take the general tools provided by ccp and create their own gaming structures, be they ponzi schemes or hypothetical regulatory bodies to insure against fraud like this.

and for the squeamish, player to player interaction is not necessary to make ISK (or at least it can be kept to a minimum). you can run PvE missions til you're blue in the face. you can spend hours harvesting minerals from asteroids. you can haul crap from one market to another for profit. there are in-game multi-billionaires who do nothing but build items and ships to sell to other players.

there are thousands of ways to make money, the majority of which don't involve handing your hard-earned ISK to someone you don't know who promises you returns on your investment when you know full well that nothing is in place to insure it. so punishing someone who works within the game's darwinian spirit is just silly, to put it mildly.

if he ends up working outside the game to make real-world currency, that's another story. but eve is eve, and dentara rask's actions, while reprehensible from a moral standpoint (in-game morality and out-) is a beautiful example of the survival of the fittest spirit of the game. don't like it? play world of warcraft. or maybe just use your head.

eve is not "the real world". its laws and protections don't apply. the only thing protecting a player in the game is research (imo, reading the forums are an integral part of being successful in-game) and street smarts.

Bingo. People make the choice to play Eve, Kat. They consent to the "rules" of the game when they sign up. If the rules are, "Buyer Beware. Police Yourself," then that's the way it is played. Seems like a cop-out if there were suddenly rules enacted to protect the players that don't give the game due diligence, especially considering that CCP has complete control over the environment programmatically. If the players don't like it when the rules come back and bite them in the ass... they can always quit.

The same cannot be said about Real Life.

Appreciate all the comments, really good thinking. As I stated in the beginning, the whole concept may be a straw man, but straw men can be useful.

To me the really unique part of this that sets it asside from selling magic beans is that CCP will essentially buy your magic beans from you and hand you a tangible good with a known market value: the game time card. This sets it apart from Sony, who while offering its own marketplace, isn't setting any prices. If you got paid from your employer in magic beans, but the guy down the street published a regular "we trade $50 exxon gas cards for 1 magic bean" I think it would be pretty clear that you had been paid according to the AMT rules. Whether something has real world value is a function of fungibility -- transference.

US currency has no inherrent value, but those little pieces of paper can be transfered into food. US currency is "fiat money", it has no inherent value whatsoever, and is not tied to any particular standard or item of transferable value. Markets ascribe it value.

As soon as you can transfer anything into something else, there is a value associated with it. In this case, we know, with absolute surety, that our magic beans can be transfered into something worth $14.

I'm a libertarian. I find most of the US tax code and much of tort law ridiculous. I also find Eve's world wonderful, partly because of its wild west character. The fact that I love it doesn't actually impact the discussion. Nor does the fact that I hate the arguments.

I generally agree with everything Sarigar said, so I won't repeat that. It seems like we've heard from EVE players who have been around the block and know the pitfalls of the game. I've only been playing a week, but I've been reading gaming articles about scams in the EVE universe for two years now, so I know what I am getting in to.

All I ask is that we maintain some sympathy for those who just happened to click on a banner ad, download the game, and start playing, without spending a single minute reading the forum boards or warnings in gaming news, and who assumed that since they were playing a game, some rule set somewhere was surely keeping them safe when they "invested" their money.

Reading the article my first reaction was, "Yea - this is a crime!" But then the point about piracy being legit came up, and it's a good one. It's fine for a player to blow away another player's ship and steal his stuff. It happens. But what this guy did was "win" by using just his brains and his social skills.

If he had used a "Level 25 Blaster", then the players that lost could say, "Well he had a better blaster" or "My shields just weren't strong enough". In other words, they can justify their loss and save face by accepting that it was directly tied to features and technology of the game. And accepting (or hating) their loss is in a sense part of the story that they are living in the game world.

But in this case, they have to face the fact that they themselves lost. They were personally too trusting, gullible, honest, open, etc. Their own core real life self is who made them lose, not the game. That's a bitter pill to swallow.

Almost makes me want to play EVE again. Almost.

Funkenpants wrote:

I don't see it as chilling. Not cost effective. Not a good idea. But if you're making property , tangible or not, and then selling it, it's not unusual for the government to take a piece of the action.

At that point it's technically become taxable income, because you've sold it and gotten (presumably) something with a measureable value in return. But part of the article says that the IRS might think of taxing online possessions that aren't sold for RL money. That's a f*cked up thought. I mean, that's a "turn me into V for Vendetta" kind of thought, because it's just so damn insane.

rabbit wrote:

In this case, we know, with absolute surety, that our magic beans can be transfered into something worth $14.

No, you cannot. CCP will only allow trade of in-game currency for more time to play the game. Attempting to sell the currency any other way is a violation of the TOS, and CCP is free to open up a can of whoop-ass.

EVE Online is a place where stupidity is well and truly punished. If I am piloting a freighter carrying 500 million credits of some mineral and a pirate catches me, destroys my ship and collects the cargo is that more or less illegal than in this case? (alibet on a larger scale)

The people duped in this scheme were duped because they were a combination of gullible and greedy. P.T. Barnum and all that.

Guysmiley wrote:

No, you cannot. CCP will only allow trade of in-game currency for more time to play the game. Attempting to sell the currency any other way is a violation of the TOS, and CCP is free to open up a can of whoop-ass.

Just because you violate the TOS doesn't obviate the value. Heck, making money from serious crimes, much less that of selling game assets technically owned by CCP, is already covered by the IRS.


IRS pub 525:

Illegal income. Illegal income, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.

I ain't defendin' it, it's ridiculous. I'm just pointing it out.

Wow, I've never seen that IRS doc before. "We don't care if you sell drugs... just pay taxes on it"

Two questions pop into my head:

#1. Do we know if Dentara Rask is even American? Eve is a very Euro-centric game. I've only read the transcript, I haven't heard the audio.

#2. Where does the IRS say that ISK has value before it is sold for real currency? If it is not sold does it have value. If so, how is the case I mentioned earlier handled? Does the raiding pirate have to fill out a Schedule C?

Guysmiley wrote:
rabbit wrote:

In this case, we know, with absolute surety, that our magic beans can be transfered into something worth $14.

No, you cannot. CCP will only allow trade of in-game currency for more time to play the game. Attempting to sell the currency any other way is a violation of the TOS, and CCP is free to open up a can of whoop-ass.

Read the article, Guysmiley. It states that you can trade ISK for a game time card, which is apparently worth $14. You yourself say that it can be traded for game time.

Looks like we have attracted some EVE fans to GWJ today with this article. To all the visitors, let me say: Welcome! You have found an oasis of coolness and light-hearted maturity in a gaming desert that is fraught with nincompoops. If you are similarly cool, light-hearted, and mature, then take a good look around! If you aren't, well, have a nice day.

The IRS is obviously silent about ISK in particular, but there's a long history of taxing things other than cash income. If you win a car at a casino, you'll fill out a tax form for the full retail value before you get your keys, even though you can't sell it for that amount once you drive it off the lot. And that story about the million dollar baseball ain't one I made up.

But your point is exactly that I made in the article: Dentara's defense against such claims would be one of recognition. And that's a defense he might very well win. However, the IRS decides these things, not us, and my fear is that they'll start doing so sooner rather than later, and it's precisely things that appear to mimic real-world crimes (whether the poker exception applies or not) that would likely push them over the edge.

Of course, I think there's merit to the argument that the income tax is unconstitutional, but that's a diatribe for another day.

Reminds me of the days of early UO, you ventured out of the cities at your own risk.