Monday, October 17, 2016

The Rabbit Hole: Associations

"In chaos theory, there's a concept known as sensitive dependence on initial conditions. Most people call it the butterfly effect. In EVE, we call it the sandbox."

One of the benefits of writing for yourself is the ability to go back and reflect on the past as well as the future. On Wednesday, CCP explicitly declared gambling websites based on CCP's intellectual property and utilizing EVE's in-game assets as violations of the game's End User License Agreement. Back in July, news emerged about skins gambling in Counter Strike: Global Operations that could affect the EVE Online gambling scene, but I thought the chance of any significant change in policy was slight. In the first post I tagged with the gambling label, I began my exploration of the subject with the following paragraph:
"Among the interesting developments in EVE Online is the growth of online gaming sites utilizing in-game currency and virtual goods. I don't think that popular sites like EveBet and I Want ISK really worry about real world gambling laws. After all, the money wagered is internet spaceship bucks and not convertible to real world currency without violating the EVE Online End User License Agreement and Terms of Service. No need to worry about lawyers or governments intervening, right?"
Over the course of the last three months, gambling regulatory bodies declared the type of gambling operations conducted in EVE Online as gambling that falls under real world laws. On 16 September, two YouTubers in the United Kingdom who operated a website dedicated to FIFA 16-related gambling were charged with promoting a lottery and advertising unlawful gambling, along with inciting individuals under the age of 18 to gamble. The pair pled not guilty on Friday and face a hearing on 6 February 2017. Looking at a white paper published by the U.K. Gambling Commission in August 2016, my analysis indicates that the type of games run by EVE gambling sites fall under the purview of the UKGC. At the very least, in order to comply with U.K. law to operate within the U.K., EVE gambling sites needed to obtain an operating license from the UKGC.

On 5 October, the Washington State Gambling Commission issued a press release announcing it had given Valve ten days to present a plan to stop facilitating the operation of skins gambling sites, which the WSGC declared violated Washington state gambling laws. In the press release, WSGC chairman Chris Sterns stated:
"In Washington, and everywhere else in the United States, skins betting on esports remains a large, unregulated black market for gambling. And that carries great risk for the players who remain wholly unprotected in an unregulated environment. We are also required to pay attention to and investigate the risk of underage gambling which is especially heightened in the esports world. It is our sincere hope that Valve will not only comply but also take proactive steps to work with the Commission on future measures that will benefit the public and protect consumers."
In effect, regulatory bodies declared unlicensed gambling sites, even if only dealing in pixel money, were illegal. At that point, all of the EVE gambling sites were openly in violation of point 7 in the Terms of Service.
7. You may not violate any local, state, national or international laws or regulations.
The change in the EULA just made the violation explicit.

I recounted the events over the past few months in order to discuss a major topic of conversation among EVE's chattering & entertainment classes over the weekend. What happens to those content creators who relied on casinos to fund their activities? But I have a slight twist on the subject.

What responsibility did people doing business with EVE's gambling sites have in vetting these organizations that turned into their business partners? Admittedly, I am a bit paranoid, but I questioned the longevity of any gambling organization, even one as respected as Eve-bet. I should add I've always wondered what would happen if CCP cracked down on gambling.

I divide the EVE gambling sites into two categories. In the first, the organizations have a clean record with CCP and apparently no integrity issues. I put websites like Eve-bet and Eve Online Hold'em into that category. Those sites ran for years with few, if any, issues. Aside from the association with gambling, which is rather important for at least one sub-segment of content creators. While I think those content creators were naive in believing the gambling gravy train would go on forever, I can at least understand any confusion and bewilderment.

The second category consists of sites that throw up red flags, such as CCP taking disciplinary action against the site or an association with sites that violate the terms of service of some games, such as G2A. The biggest example, of course, was I Want ISK. When CCP takes action against an organization for RMT multiple times, any content creator taking that money has to know the source of the funding could dry up at any time. Quite frankly, anyone who complains that CCP shuts down such a questionable source of funding deserves any ridicule he receives.

I do need to add a special section for Twitch streamers. The Twitch Rules of Conduct include the following prohibition:
Breaking the LawYou must respect all applicable local, national, and international laws while using our services. Any content or activity featuring or encouraging illegal activity is prohibited.
I'm pretty sure that urging people to use a service that violates laws in some jurisdictions, such as an unlicensed gambling website, violates Twitch's Rules of Conduct. If I were a Twitch streamer, I would hesitate about putting any advertising at all on my home page, much less tell my audience how great a gambling service is. Streamers can rage at CCP all they want, but the developers can only restrict the flow of ISK and assets. Twitch can cut a streamers access to the platform.

I have to admit I don't really have a lot of sympathy for the content creators crying about losing their funding. The sympathy I do have is a result of CCP allowing the situation to continue for so long. CCP decided they would rely on content creators to advertise their game and all of a sudden the rules changed. Those who tried to work with reputable people probably feel betrayed. But those who took money from the likes of I Want ISK? Time just ran out.

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