Cons in the virtual gaming world

Earlier this month, a virtual bank CEO in the science-fiction role-playing game "Eve Online" made off with billions in cybercurrency that fellow gamers had entrusted to him with the hope of earning some interest.

The banker, a player who goes by the alias "Cally," has admitted to the scam, and even bragged about it. It's unlikely, however, that any action will be taken against him--online or offline. In the freewheeling world of "Eve," what the virtual banker did was distasteful, but it probably didn't break any rules.

The bank scam itself, known as the "EIB scandal"--after Eve Intergalactic Bank, the name of Cally's operation--was a pretty simple con job. "Somebody makes it big by stealing from other people," explained Mark Smith, an "Eve Online" player who watched the EIB scandal unfold earlier this month. "Eventually the house of cards crumbles and the scheme is exposed. In fact, that's pretty much exactly how this thing came about."

The aftermath, however, is much more complicated, and industry experts say it should raise warning flags for gamers who spend money on auction sites and exchanges to buy items used in virtual worlds. Some even think such virtual scandals could end up being settled in real-world courts.

"This stuff is real money," said journalist Julian Dibbell, author of "Play Money: Or, How I Quit My Day Job And Struck It Rich In Virtual Loot Farming." According to Dibbell, "once the money trade is there, this stuff can be sold as quickly and sometimes more quickly than real currency."

So-called massive multiplayer online role-playing games (MMORPGs) have seen their fair share of skullduggery. Last year, fantasy MMORPG "EverQuest" was plagued by a massive counterfeit scheme, and this spring "Second Life" faced a barrage of denial-of-service attacks. And with crime came punishment: In the "EverQuest" situation, the hackers responsible lost their accounts in the game; and the denial-of-service attacks on "Second Life" attracted a federal investigation.

"Once the money trade is there, this stuff can be sold as quickly and sometimes more quickly than real currency."

--Julian Dibbell, journalist

But what happens when the rules of a game allow players to be subject to trickery, robbery, embezzlement, fraud and other deeds that make recent corporate scandals look mild by comparison? That's the situation with the EIB scandal. In many popular MMORPGs, such as "World of Warcraft" and "Dark Age of Camelot," Cally wouldn't have come anywhere close to walking free after something like the EIB scandal, Smith said. Rules of etiquette are tough, strictly enforced, and malicious players "just don't have any real impact over other players" because they tend to be quickly discovered and exiled, he said.

"Eve Online" is far less regulated, and its end user license agreement (EULA) make that clear. "The behavior of Cally and his EIB is despicable, but allowed. As long as he kept all of his work within the boundaries of the EULA, there's nothing ('Eve Online' creator) CCP Games will do to touch him," Smith said.

Indeed, the game's creator, based in Iceland, hopes to remain neutral in this situation. "CCP does not intervene in such cases and will only get involved if a game exploit was used, which we have not found any indication of in this case," CCP CEO Magnús Bergsson wrote in an e-mail to CNET News.com.

Reactions to the EIB scandal peppered MMORPG forums and blogs for days after the incident. Opinions were mixed. Some players were outraged, while others shrugged the incident off with an attitude of "whatever, it's not real money." One poster in the MMORPG section of the QJ.Net blog site suggested that "Eve Online" players, after agreeing to the anything-goes EULA, ought to know that their virtual possessions run the risk of theft: "It's part of the game," the commenter said. Going after Cally "would be like suing someone you lost to at poker."

But here's the complication: If you visit a major online auction site, you can see that virtual possessions in MMORPGs do have "real" monetary value. An eBay search for "Eve Online" yielded upwards of 800 items, ranging from pricey quantities of ISK ("Eve Online" currency) to "skill sets" for characters to menacing-looking battle spaceships--and yes, winning bidders pay with real dollars. Consequently, for some hard-core "Eve Online" players, having their virtual savings swiped by a shady banker could ding their real-world checking accounts.

Some gaming experts--Dibbell included--think that it might be time for real-world judicial systems to take the antics of virtual scammers like Cally seriously, even if the game creators are willing to let them get away with their schemes. "No lawyer, no cop, no anybody is going to get away with saying, 'That has no value, therefore it's not our problem,'" Dibbell said. "They're going to have to look at the context of the game and figure out what the real answer is."

"If murder, one of real-world society's worst crimes, is commonplace in MMORPGs, why would any lesser crime be a surprise to game players?"

--Liane Sifuentes, professor, Colorado College

It's not unheard of for a federal court to intervene in how a game is played. As recently as 2001, Dibbell said, the U.S. Supreme Court was debating the fundamental rules of golf's PGA Tour. Perhaps it all does come down to context: Golf, after all, is undoubtedly a sport. Should something like "Eve Online" be treated likewise as a game, or even as a functional society with legitimate institutions such as a financial system?

Edward Castronova, author of "Synthetic Worlds: The Business and Culture of Online Games," takes the EIB scandal as an indicator of the fact that virtual economies are, indeed, real--and they're evolving just as offline ones have.

"Fly-by-night banking plagued financial and monetary systems for hundreds of years," he said. "Finally, central governments began regulating and supporting the entire banking system using the force of law. Without those systems, financial panics should be pretty normal--they happen all the time in the real world's history. So it's not surprising to me at all that a virtual bank collapsed due to fraud."

Nonetheless, plenty of observers have described the EIB scandal as "overblown." "If murder, one of real-world society's worst crimes, is commonplace in MMORPGs, why would any lesser crime be a surprise to game players?" said Liane Sifuentes, a professor at Colorado College who teaches a class about online personae in interactive social spaces. "If real-world ethics defined in-game strategy, almost every MMORPG would be rendered inert and, frankly, un-fun. And while being swindled may not be as fun as acquisition, as long as game play continues, everyone gets what they paid for."

Some libertarian-minded "Eve Online" gamers similarly scoff at the idea of bringing real law into their virtual world. "The frontier regions of western movies are long gone in our world but they found a last refuge in this game," said "Eve" player Martin Wöhrer. "('Eve Online' is) a place where bullets don't really kill and all that is hurt is your ego. But then again, you might walk away with a lesson learned."