QUT Verified Signature Acknowledgements

A thesis is a substantial commitment, of time, effort and thought. I want to thank a lot of people for helping me through this process, however first and foremost must be my parents – Wendy & Paul – and my sister, Corrie for their support as I moved firstly to Copenhagen and then Australia, and a deep gratitude to my supervisors John Banks and Nic Suzor, without whom this project would not have been possible, and Brian Fitzgerald for his guidance in the early stages of the project. Additionally, funding from Queensland University of Technology and funding & support from the ARC Centre for Excellence in Creative Industries and Innovation was greatly appreciated.

I’d also like to thank – who was a big reason for me pursuing game studies from my experiences at the University of Essex, my lecturers & colleagues at the IT University of Copenhagen, notably Gordon Calleja, TL Taylor & Miguel Sicart for their inspiration and support. I appreciate the discussions with Richard Bartle & Ren Reynolds – online & in person - for guiding principles re: and regulation, and the advice of Jean Burgess on academic life in Australia, and her detailed feedback on writing and at my final seminar, for which I also thank Barbara Adkins, Melissa de Zwart & Vesna Popovic for their invaluable feedback and suggestions. I also thank Stephen Thompson for his work in conducting a final copy-edit of the document.

Finally some friends; Stephanie Papavassiliou for so much at Essex and since; Nathan Connelly, Rowan Pickering & Charlie Knowles who helped me adjust to Australia, and Rachel Driscoll for her help on a Las Vegas trip which explored many of the dimensions of this thesis. Team EVE’s (Kelly Bergstrom & Marcus Carter) discussions in Raleigh helped fill holes in my knowledge of EVE, and I look forward to our future collaborations. Finally, to all the wonderful people in Copenhagen, Brisbane, Oxford, and at International conferences who I cannot name personally; this wouldn’t have been possible without your thoughts and feedback.

2

Abstract

There are a number of pressing issues facing contemporary online environments that are causing disputes among participants and platform operators and which are increasing the likelihood of external regulation. These include questions of ownership and value of property held within the environment, intellectual property, boundaries of acceptable play and automation (or botting) to optimally collect resources. These issues raise a number of key questions for the future of online environments. There are the questions of what form regulation should take and what its impact would be on platforms and their participants, including platform operators. And then there is the issue of whether a pre-emptive strategy aimed at developing an alternative governance framework for the industry is appropriate.

A number of solutions have been proposed, including industry self-governance, top-down regulation and models of platform self-governance that are emerging, such as ’s Council of Stellar Management (CSM). However, none of these solutions seem entirely satisfying; facing challenges from developers who fear regulators will not understand their platforms (Bartle, 2006), or players who feel they are not sufficiently empowered to influence the platform.

This paper considers case studies of Eve Online and the offshore gambling industry, with a focus on day-to-day governance practices. There are several common factors between these studies, such as the presence of a regulatory gap between company representatives and the legal system. Offshore gambling operators are located outside US jurisdiction but target US clientele, while Eve Online’s Terms of Service refer players to the district court of Reykjavik, making access to dispute resolution expensive, if not impossible, for the majority of participants. Both platforms have strong communities, facilitated by forums and such as Sportsbook Review and Eve News 24, and have seen disputes arise over both ambiguity in terms of service and differences between formal rules and practised community norms.

Mediation in the offshore gambling industry offers prompt outcomes based on norms negotiated between operators and participants, with elements of justice and contract law underlying the decisions of emergent participant-driven mediators. Those mediators operate through the power of public perception. They are recognised as fair and equitable by the players, which gives them the coercive power to harm companies operating in this space by publicising wrongdoing.

Gambling industry participants have often chosen to utilise emergent participant-driven regulation forms, such as Sportsbook Review, in preference to sanctioned governmental bodies, such as IBAS (Independent Betting Arbitration Service) in disputes involving United Kingdom operators, primarily

3 due to the speed of reaching decisions and their track record of operator compliance. While no such similar evidence exists with other online platforms, it seems reasonable to suppose that participants would utilise a proven, fast-acting, dispute resolution system in preference to slow and expensive court procedures, and thus this thesis suggests that such mechanisms are worthy of consideration as the future regulatory shape of virtual worlds.

Keywords: Virtual Worlds, Social Games, Regulation, Dispute Resolution, Policy,

4

Table of Contents

1. Introduction ...... 9 1.1 The Case Studies ...... 10 1.2 Findings ...... 12 1.3 Chapter Outline ...... 18 2. Contextualising the Thesis ...... 21 2.1 Game Studies ...... 21 2.2 The “Magic Circle’ & ‘Pro Gamers’ ...... 22 2.3 Cultural & Media Studies ...... 23 2.4 Game Design ...... 25 2.5 Regulatory Approaches ...... 27 2.6 New Media & Participatory Cultures ...... 30 2.7 Norms ...... 31 2.8 Norms & Virtual Worlds ...... 43 2.9 Advantage Play ...... 47 2.10 Summary ...... 50 3. Methodology ...... 51 3.1 Environment Scoping ...... 51 3.2 Case Study Methodology ...... 54 3.3 Case Study Selection ...... 57 3.4 Eve Online ...... 58 3.5 Offshore Gambling ...... 73 3.6 Ethics ...... 75 4. Issues in Contemporary Online Environments ...... 78 4.1 An outline of the issues ...... 78 4.2 Defining Cheating ...... 85 4.3 Gambling, Social Games & Financial Addiction ...... 90 4.4 Terms of Service & EULAs ...... 94 4.5 Categorising Potential Regulatory Issues ...... 95 4.6 Offered Solutions ...... 96 4.7 The Core Issues Remain ...... 110 5. Eve Online ...... 112 5.1 A re-introduction to Eve Online ...... 113 5.2 Mining ...... 114

5

5.3 Cheating Norms ...... 117 5.4 ‘The Cheats’: In Eve Online ...... 120 5.5 The Why ...... 121 5.6 The How ...... 127 5.7 Implications ...... 131 5.8 EVE vs. ...... 131 5.9 The CCP Perspective ...... 133 5.10 Implications ...... 135 5.11 Community Response ...... 136 5.12 CCP Response ...... 140 5.13 Council of Stellar Management ...... 141 5.14 Democratic Representation in Eve Online ...... 143 5.15 Summary ...... 146 6. The Offshore Gambling Industry ...... 149 6.1 International Gambling ...... 150 6.2 A Short History of the Offshore Gambling Industry ...... 153 6.3 Offshore Regulation ...... 154 6.4 The Forums: TheRX, Majorwager & The Offshore Wire ...... 159 6.5 Arbitration & Mediation Panels ...... 176 6.6 Sportsbook Review ...... 181 6.7 Types of Dispute ...... 185 6.8 Summary ...... 191 7. Defining & Testing a Participant-Driven Approach to Dispute Resolution ...... 197 7.1 State of Play ...... 198 7.2 Applying the conditions for Participant Driven Regulation ...... 200 7.3 Boundaries & Resolution Theories...... 206 7.4 Summary: Mediation Platform ...... 211 7.5 Evolving Industries ...... 213 8. Conclusion ...... 215 8.1 Norms & Self Governance ...... 217 8.2 Methodology ...... 219 8.3 Regulatory Options ...... 219 8.4 Self-Governance as a solution ...... 220 8.5 Regulatory body considerations ...... 223

6

8.6 Future work ...... 224 References ...... 229

7

List of Figures

Figure 1: c. 2007 – Image via Google Images...... 90 Figure 2: Second Life c. 2012 – Image my own ...... 91 Figure 3: ODAB - via the Virtual Policy Network ...... 104 Figure 4: EVE Mined Volume (Jan 2012 – May 2012). Image (c) CCP Games ...... 116 Figure 5: Jita Warning ...... 146

8

1. Introduction

This research describes and analyses the governance challenges faced in contemporary online environments by utilising a qualitative approach to conduct case studies of two such spaces, Eve Online and the offshore gambling industry. In particular, this thesis focuses on the regulatory approaches observed in the offshore gambling industry that may be applicable to other online environments. Both case studies feature research on environments in which both social and, increasingly, financial capital is at stake, and are generally and operated by large multi- national companies that have disproportionate power in comparison to those who utilise the environment. Self-governance is a frequently proposed solution for the regulation of these platforms, and the offshore gambling industry demonstrates a novel implementation, from which I believe we can better understand the challenges of this approach to regulating online platforms.

There are a number of pressing issues facing contemporary online environments. One of the most significant and oft cited of these is real money trading; that is the use of real currency to purchase in- game assets, and the eventual sale of in-game assets in order to receive real currency (Castronova; 2005 & Dibbell, 2006). This prompts questions of ownership and value of property held within the environment and raises design and social questions when players are able to use real money to purchase in-game currency as a means to bypass certain areas in the game or obtain equipment in a manner, and at a speed, not envisaged by the environments’ designers. Other prominent challenges include intellectual property and automation; the use of software to optimally collect resources. More generally, there exists the possibility for a wide range of disputes between participants, and between participants and platform operators, particularly over contentious issues such as whether a participants action is at the edge of the rules or breaching the rules (i.e. cheating), and action taken by platform operators in response to this.

There have already been examples of top-down regulation being enforced. In Asia, a mechanic known as ‘Kompu Gacha’, through which participants receive a bonus for collecting a set of in-game artefacts which must be purchased in a random mechanism akin to trading cards, has seen courts rule that this mechanic, found in a number of games, is in fact a gambling activity, and as such the game must be operated under gambling legislation. Similarly, authors including Methenitis (2007) and Purewal (2012) have argued that mechanics found in contemporary virtual worlds and social network games can be seen as akin to gambling, and Purewal further argues that other mechanics within these environments may themselves require regulation, due to their addictive nature. It is arguable that the type of disputes discussed in this research are not limited in application to virtual

9 worlds, but may apply to social network games and their platforms, as Reynolds & de Zwart (2011) discuss.

These issues raise a number of key questions for the future of online environments, which form the basis of my research. Firstly, is it the case that some form of regulation is inevitable, and is such regulation beneficial or harmful for the future of these industries? Secondly, if regulation is inevitable, what forms might it take, and would the industry and the participants be better served pre-empting further top-down regulation through some form of self-governance? Thirdly, it is worth considering the modes of self governance and dispute resolution that exist, particularly those that have evolved simultaneously with other types of online activity, and whether these modes are applicable to, or at least can inform, discussions on how to regulate virtual worlds and other spaces. Finally, it is necessary to gain an understanding of how governance principles are established. To consider this process, I explore whether a norms-based approach is suitable for understanding the roles of different stakeholders within the environment, the negotiation amongst them, and how those norms can then be utilised to inform the regulatory process.

1.1 The Case Studies In order to gain a better understanding of how day-to-day regulation currently operates on contemporary online platforms, and what alternative modes of regulation based around self- governance may look like, I conducted two case studies, each seeking to understand the norms within a particular platform.

The first case study focused on Eve Online, which is a science fiction, massively multiplayer, that has operated since 2003. It is notable for its hands-off governance structure in which both developers and the player community understand that fraud and corruption is as equally valid an approach to participating in the environment as would be concentrating on ship-to-ship combat or mining resources from planets. This is notable because it explains a pervasive undercurrent of mistrust that underlies much of the activity in, and norms of, the environment; a commonly espoused motto is “trust no one”.

The second study focused on the offshore gambling industry, which refers to those operations that from the late 1990s through to the present day have operated outside of US jurisdiction (for the United States declares such , with certain exceptions, to be illegal). Amongst the participants of this industry, a form of mediation has been developed that offers prompt outcomes based on a set of standards negotiated between the operators and the participant base with elements of natural justice and contract law underlying the decisions of the mediators. While

10 disputes can take years to resolve via the legal system, decisions mediated in the offshore gambling industry are frequently resolved in under a week.

The case studies will identify and explore the norms present within the environment, particularly with regard to participants’ understanding of fair and foul behaviour (cheating) and the means for resolving disputes between and among environment participants. Additionally, the research considers common factors in both environment and participation between the case studies, and whether these are sufficient to form a theory of how self-regulation may work more widely in online communities and platforms. The research questions whether the model of governance deployed in the offshore gambling industry, as a result of a lack of formal regulation in that space, is suitable for other communities to follow, or whether it should serve as a precedent for a failed attempt to deploy participant-based governance.

Each of the studies were approached as qualitative case studies, with the data collection and scope of each study iteratively changed throughout the research period as the questions and topics of interest developed. Through theoretical sampling, I selected interesting and extreme examples where the norms of the platform came into dispute. During the time period of my research, these were predominantly around real money trading – the illegal use of real money to gain an advantage within Eve Online – and the use of software to automate activities and generate revenue within the platform – botting.

In considering the norms of both spaces, I relied on the definition of McAdams, who, building on work by Austin (1832/1954), describes norms as “enforced by means other than legal sanctions” (p. 250) and akin to an obligation. He offers the example of recycling: “If recycling were a norm, for example, we would not mean that – or at least not merely that – the state punishes the failure to recycle but rather that the obligation to recycle is enforced by a nongovernmental sanction – as when individuals internalize the duty and feel guilt from failing to recycle or when individuals privately punish those who do not recycle” (p. 250). While platforms in both case studies had their own laws (i.e., the hard-coded rules, and terms of service, of the environment) and are often subject to national laws, by considering where the norms were in dispute I was able to identify where these hard-coded rules breached community norms, and how such situations were negotiated, both amongst participants and between participants and platform operators.

I also collected data around the governance models deployed in both case studies. In Eve Online, I considered how, despite a formal procedure which required any disputes to be settled at a district court in Reykjavik, participants were able to influence CCP through the ‘court of public opinion’,

11 utilising blogs, forums and protests to communicate a viewpoint and persuade CCP to take particular enforcement action, or, in another case, change the corporate focus of the company. Similarly, with the case study of the offshore gambling industry, I collected and analysed historic data, which considered a number of different modes of participant-based regulation that had emerged throughout the history of the industry, to ascertain where each was able to succeed and fail, and how those experiences could be applied to other online platforms.

In both cases, the material detailed in this research is largely observational. In the case of Eve Online, this results both from some methodological challenges, whereby access to certain aspects of the environment is essentially gated by corporations and alliances, but also from the fact that most of the relevant discussion of rules, botting and other aspects of the game that are worthy of regulation occurs on community sites, forums and through social networking services. It is worth noting, however, that without my substantial involvement with the in-game activity, the context of much of this discussion would not be possible.

Although the majority of the issues discussed relating to the offshore gambling industry are detailed through statements made in the public domain, on community forums, using aliases, they are informed by discussion with participants involved in all three major roles: the complainant, the gambling operator and the mediator. The nature of the industry, and the US prosecution of its participants, prevents direct quotations being offered here, for a combination of those quotations and the public record accounts would provide evidence of specific participants’ involvement in the offering of services and payment of funds to US gamblers, in violation of several United States laws.

1.2 Findings Both the Complete Gacha case in Asia, and the academic literature, including Reynolds & de Zwart (2011), suggests that regulation for online platforms is impending; there is too much at stake for the current developer fiat (or tacit acceptance of the status quo by formal legal mechanisms) to continue as the standard operating procedure in such spaces. Given a trend towards regulation, I considered the approaches to regulation that have been proposed by a range of authors for contemporary online environments. These range from a continuation of ‘developer fiat’ to self- governance mechanisms either overseeing the industry (such as eCOGRA) or within a particular environment, and to proposals such as that of Reynolds and de Zwart (2011) for an Online Dispute Arbitration Board based on the Court of Arbitration for Sport.

Among self-governance mechanisms that are currently emerging from the companies themselves is Eve Online’s CSM. In the case of the CSM, elected members of the Eve Online community are invited

12 to the headquarters of CCP (developers of the game) in Reykjavik, Iceland, one or two times per year, at the developer’s expense, in addition to holding regular online meetings and having a contact within CCP with whom they can raise topical issues. This community panel is invited to discuss issues, for example: lag (the delay between client and server) and botting (the use of computer software to automate play within the environment), as well as being invited to give their opinion on future developments of the platform. Ultimately, however, the body only has consultancy power, and there remains the feeling in the Eve Online community that the CSM does not reflect the true concerns of the community. This has particularly been the case in recent years where block voting has come to the fore; where alliances instruct their members to vote for specific candidates who they feel will benefit the alliance’s objectives, which, as I will detail in Chapter 4, bears resemblance to past experiences in environments such as LambdaMOO.

Community managers also have an important role to play in mediating the relationship between players and companies, as highlighted by Banks (2009). Community managers often participate on the forums of games, and this is true of Eve Online. Community managers, in effect, provide a form of informal dispute resolution between the players and those with the power to impact on the design. They can also provide some form of compensation or resolution to a player’s issue, being in the unique position of hearing these problems from the players and having a direct internal chain to those making the decisions. However, this approach may be insufficient to resolve high-stake disputes that arise between platforms and participants, and the options available to participants should they be unhappy with the result of these existing processes are extremely limited.

Legal scholars (Duranske, 2008; Lastowka, 2010) contend that the existing legal framework could be adapted to consider these disputes. However, there is a substantial risk in introducing legislation to the marketplace too early. The introduction of government regulation before norms have had time to evolve, and before a clear understanding of the relationship between the participants and the platform provider has been established, brings the significant risk of limiting the design freedom available to platform providers.

There is also the risk that governments are unlikely to have a full understanding of the issues within the environment, and are highly susceptible to being impacted by the moral panics surrounding the games industry. However, while the focus of this thesis, and my primary interest, is in bottom-up techniques of regulation, this approach to regulation may not always be appropriate. Sometimes, the interests of providers do not align with and may conflict with the interests of the wider community or other stakeholders, and in these cases government regulatory intervention may be required. Similarly, the implementation of bottom-up regulation does not necessarily rule out a role

13 for government; indeed, background government regulation is always likely to underlie such approaches; however the addition of a community driven layer may serve to increase the prominence of the communities’ normative practices in the regulation process

As the Complete Gacha example highlights, the unintended consequences of overly pre-emptive regulatory interventions may well have unfortunate consequences on the players and the industry. I argue that a careful and rigorous understanding of the norms emerging among players and industry in these environments should inform whatever form regulation in the industry ultimately takes.

Designers often contend that rather than any outside service, participants should utilise existing channels (game-masters, customer service departments) and that the designers’ decision should be final (Bartle, 2004). Given the range of issues within the history of virtual environments demonstrated in Chapters 2 and 4, allowing designers fiat to continue is unsatisfactory for the future of online platforms, and thus neither the legal system nor a customer service department is entirely satisfactory.

Other proposals call for a new form of top-down regulation, be that judicial (forming new laws to deal with disputes in online platforms) or quasi-judicial (creating a regulator such as OFCOM in the United Kingdom or the FCC in the United States to act as an ombudsman for the industry). While this may be a solution within any one country, the international nature of these environments suggests that such a system may be hard to implement. One solution to this would be to have the quasi- judicial authority operate in the country in which a particular environment is hosted, but to accept complaints from participants around the world, as is the case with IBAS (the Independent Betting Arbitration Service) in the United Kingdom. This could mitigate some of the difficulties in the judicial process, for example by allowing complaints to be made and responded to electronically, but it would still offer unequal access – at least in terms of awareness .It would also seem to be prone to jurisdiction shopping; the nature of offering such an online environment would mean if an operator did not like British or American jurisdiction they could relatively easily relocate the offering to, for example, Antigua or Costa Rica.

Game designers also prefer to avoid judicial or quasi-judicial regulation. Bartle (2004), amongst others, argues that to enforce top-down regulation would be to restrict design freedom and limit the range of games that could be produced. Similarly, from the US perspective, Balkin (1996, 2004) suggests, “the freedom to design and play in virtual worlds has constitutional significance. Much of what goes on in virtual worlds should be protected against state regulation by the First Amendment

14 rights of freedom of expression and association” while acknowledging that “other activity in virtual worlds will not and should not be so protected from legal regulation” (2004, 2045-2046).

Suzor (2011), akin to Lastowka and Hunter (2003), argues for internal enforcement where possible, which ultimately means that there must be some form of dispute resolution beyond taking issues to an outside court or arbitration service. This thesis demonstrates the utility of analysing self- regulation in the offshore gambling industry as an intermediary step between internal dispute resolution (such as the community manager or customer service departments) and judicial authorities such as courts, offering increased accessibility and more prompt access to justice for participants in these environments, regardless of where they are located. Further, my research suggests that this approach to self-regulation, and the lessons learnt from its development, is worthy of consideration in the context of regulatory options for other online platforms.

Offshore Gambling Self-Regulation In addition to considering the effectiveness of existing governance structures for online platforms, I will consider how other governance strategies, such as those highlighted by Ostrom (1990, 2002, 2008), Ostrom & Nagendra (2006) and Burgess & Green (2009) and those currently employed in other industries, may apply to online environments. Particularly, I discuss the forms of governance employed across the gambling industry, both those with formal judicial or quasi-judicial regulation and those participant-driven mechanisms that have evolved in the offshore gambling industry, as a way to discuss both the success and failures of alternative governance across a single field. I also consider other correlations between the offshore gambling industry and activity seen across contemporary online platforms, particularly in the ongoing attempt to define cheating and the use of software aids, for which, I argue, the gambling concept of ‘advantage play’ may provide clarity.

Many forms of self-governance, and more formal regulation, can be seen in the history of the gambling industry. The role of the ‘community manager’ (though frequently termed as simply a company representative) is increasingly prevalent in the offshore industry, both pre-empting the role of dispute resolution mechanisms by interacting directly with the players on community forums to resolve issues and/or negotiate a settlement and interfacing with the dispute resolution process on behalf of the company. Meanwhile, the gambling industry in the United Kingdom and Australia operates under a more formalised legal regime, where books require licences (which are not, unlike in the case of many offshore companies, a simple rubber-stamp) and are forced to submit to an independent arbitration service, with judgments enforceable by the courts.

In contrast, many offshore regimes (for example, Costa Rica, Panama, Malta and Cyprus) operate a far more hands-off approach, and with these companies the only form of mediation available comes

15 through third party dispute resolution services such as Sportsbook Review and Casinomeister, who effectively operate through the power of public perception – that is to say, they are recognised as fair and equitable by the players, and have the coercive power to cause severe damage to companies by publicising wrongdoing.

The evolution of this system of regulation, and the substantial period for which it was the dominant form of regulation for a growing industry with large sums of money at stake, warrants consideration. Whether there are unique factors at play within the offshore gambling industry, or whether the system is potentially applicable more widely to contemporary online environment, is an important determination that extends beyond the scope of this research. However, as Chapters 4, 6 and 7 demonstrate, there are substantial overlaps between the two industries. With that in mind, I establish the conditions in the offshore gambling industry that enabled this mode of regulation to develop and to resolve disputes for a number of industry participants, and demonstrate the extent to which they are also present in environments such as virtual worlds and social networking services.

Self Governance Conditions As discussed, in order to consider whether the mode of self-regulation demonstrated through the offshore gambling industry could apply beyond that industry, it was necessary to define and understand the conditions and the process for the development of the regulatory and dispute resolution process. In order to establish these conditions, Chapter 6 documents in some detail the development of the offshore gambling industry, from small European operations to large companies targeting the United States gambling market - illegally, in the eyes of the US government. I also document the parallel development of dispute resolution mechanisms as they evolved from community forums to companies. That documentation will show the causes of these shifts and the failures of other modes of self-governance.

A number of key factors became apparent from this analysis, and other online platforms shared these factors. The first being that there was a regulatory gap which, in the case of the offshore gambling industry, came from a total lack of regulation beyond the customer service department of the company. Given the location of these companies, in countries such as Costa Rica and Antigua, places with little or no interest in intervening in company operations, participants found they had no recourse when books stole their gambling proceeds. Accordingly, players organised themselves and shared information on which operators to support and which to avoid. This became the foundation of platforms, such as Sportsbook Review, that continue to operate today.

A similar gap can be said to exist in gaming platforms, in this case between customer service departments and the courts. While there is an ultimate solution in this case, that of the legal system,

16 access to that system is problematic because of the international nature of the environment. The terms of service of most online environments require that players who are unhappy with services or who wish the company to reverse some action taken against their account do so in a specific court in a specific jurisdiction. In the case of Eve Online this is the district court of Reykjavik. Given that the majority of participants within an environment are not found within a short distance of that court, it makes access to justice expensive, if not impossible. Ultimately, this means that, just as with the early offshore gambling industry, companies often have carte blanche to operate as they wish.

Ostrom (2002), in the context of common pool resources, argues that emergent governance is more likely to be successful than top-down regulation imposed upon the environment. However, for such governance to succeed, a number of factors are required. Firstly, there needs to be a desire for regulation from the participant base. As indicated above, in the offshore gambling industry this came from participants losing money. In contemporary online environments, the range of disputes highlighted in Chapters 2 and 4 provide examples of situations in which participants felt they had been treated unfairly, and cases such as Bragg, discussed in Chapter 4, highlight where participants have sought outside remedy.

A second key factor for such emergent self-governance to succeed is the relative concentration of participants. This is significant because if positive or negative information about a particular operator cannot reach the larger participant base, it serves no purpose. In the offshore gambling industry, I demonstrate how the evolution of the industry, from community forums to a largely single-operator approach to dispute resolution, highlights the importance of having a single service, but also how the information from that single operator is spread amongst the community by industry participants. In Chapter 5, I discuss how in Eve Online, as an exemplar online environment, players self organised both to take investigative and enforcement action against players accused of botting, and to protest decisions taken by the publisher, CCP, in relation to the future of the environment.

Thirdly, the existence of disputes in the offshore gambling industry did not stem merely from the refusal of particular operators to pay owed funds, but also from ambiguity around formal terms of service, community norms and player behaviour. As discussed in detail in Chapter 6, the industry has frequently seen disputes attempt to differentiate between advantage play (defined in Chapter 2, but, essentially, optimising play within the rules) and cheating (breaching the rules), including disputes around automation. This bears a striking similarity to the types of disputes observed in contemporary online environments, and, indeed, Chapter 5 describes very similar disputes in the

17 context of Eve Online, with participants automating actions within the environment in order to maximise collection of resources.

Finally, such a solution has to provide benefits over alternatives. In the gambling industry, participants have often chosen to utilise emergent participant-driven regulation forms such as Sportsbook Review in preference to sanctioned governmental bodies such as IBAS in disputes involving United Kingdom based operators, primarily due to the speed of reaching decisions and a track record of operator compliance. While no such evidence exists with other online environments, it seems reasonable to accept that participants would utilise a proven, fast-acting, dispute resolution system in preference to slow and expensive court procedures.

However, it is important to identify also the differences between the two environments. While the offshore gambling industry is largely self-contained, other online environments frequently see disputes involving third parties and assets located outside of the environment, such as claims for infringement of intellectual property. This is but one example of situations where a player-mediated solution may not be optimal, and I consider the detailed boundaries of such a system in Chapter 7.

Two case studies are not sufficient to reach a conclusion that the mode of self-governance deployed in the offshore gambling industry is a solution to the problems facing contemporary online platforms. Indeed, as the work of Ostrom (2002) has demonstrated, it is necessary to build a series of comparative case studies in order to study how governance develops in particular types of environment. However, these case studies provide a detailed description of the mode of regulation deployed in these two spaces, and by doing so provide the early stages of developing a framework for understanding how participants are able to influence the environments in which they operate, potentially to the extent of developing self-governance mechanisms that may provide an alternative, or a complement, to formal regulation.

The conditions detailed above represent my first attempt at understanding the state an environment must be in to make an attempt at self-governance possible. Future work will be necessary to consider other contemporary platforms and how these conditions may apply to them, and also whether participant activity within those environments might add further conditions or otherwise develop an understanding of whether, and how, self-governance is likely to operate in contemporary online platforms.

1.3 Chapter Outline I firstly consider, in Chapter 2, the literature in game studies, law and other fields that may be applicable to considering governance in online environments. Chapter 2 also offers a more detailed

18 analysis of the literature surrounding norms, considering a number of different approaches and their relevance to the environments considered in this thesis, as well as the framework developed by Ostrom for considering self-governance in the commons that she studied. Finally, I consider how an eventual regulatory framework may take cues from what has been proven successful (and not) in the offshore gambling industry.

Chapter 3 provides a more detailed description of the methodology utilised in this thesis, incorporating both the approach taken to my in-game activities within Eve Online and my analysis of the wider community. This chapter also discusses the unique methodological challenges of an environment such as Eve Online, highlighting the implications for player interaction, movement around the environment and so forth. I discuss the methodological approach I took, including a specific focus on the meta-game. Additionally, I provide an elaboration on the ethical challenges involved with studying the offshore gambling industry, and a brief discussion of the methodology adopted to account for these.

Chapter 4 returns to online environments to consider the key issues of such environments, drawing from both a study of existing literature and particularly the regulatory challenges identified, but not addressed, by authors such as Humphreys (2005) and Taylor (2006). This chapter highlights the significance of these issues and their specific application within some exemplar platforms. Finally, I consider other recent suggestions for regulation, such as Reynolds & de Zwart’s (2011) proposal based on the Court of Arbitration for Sport, their similarities and differences to the models developed throughout this thesis.

Chapter 5 describes the outcomes of my case study on Eve Online. Firstly, I provide an overview of the environment, highlighting the key aspects of Eve Online as an anything-goes environment, and give some of the game play mechanics that are key to understanding my work with the environment. I consider the norms within the Eve Online community, and the correlation between that and the perspective of CCP, developers of Eve Online. I use Eve Online as a lens to consider the difference between cheating and advantage play, a distinction addressed previously in the gambling industry but which is equally valid here considering how players blur the boundary between optimising within the rules and operating outside of those rules. I also highlight some of the key challenges that arose over my research period with Eve Online, the way they were resolved and participant reaction to those decisions. Finally, I consider the evolution and actions of Eve Online’s player representative body; the CSM, through their response to the issues discussed previously, the perception of the player base as to their productivity and the recent concerns of the politicising of the body through voting blocs.

19

In Chapter 6, I provide a detailed explanation of how regulation has developed in the offshore gambling industry, starting with the theoretical perspective often found in contemporary literature, before demonstrating how reality differs due to the difficulty for players in making their cases to regulators, and their ineffectiveness even when they do. I describe the ad-hoc form of governance that has developed out of the player base; a form of regulation I term ‘reputational regulation’, whereby the gambling venues submit to the jurisdiction of player-based mediators because of the impact on their business were they not to do so. I discuss the evolution of these services, from community forums, through to more formal mediation panels and the rating & newswire service utilised by Sportsbook Review and Casinomeister. I discuss a number of the key cases over the course of the industry, with quotations from key participants, and detail the resolution structure employed by Sportsbook Review, before returning to norms to detail how the rules enforced in these environments have developed and altered over time.

Finally, Chapter 7 draws this material together, and considers the conclusions that might be drawn from the case studies as we consider how to regulate other online platforms. I consider how both online environments and the offshore gambling industry may continue to evolve, and whether they would benefit from a more formal regulation structure and what that structure may look like.

20

2. Contextualising the Thesis

This chapter provides an introduction to both the research fields relevant to this work and the range of literature that backgrounds it, particularly debates in game studies, but also the difference between ethnographic and design perspectives. Additionally, I introduce the concept of norms, and a number of different norm theories to which I return throughout the thesis. I discuss the increasing role of players as stakeholders and content producers in online environments and provide an outline of some of the online environments where the regulatory challenges I identify are applicable.

Specific theory relating to the methodological approach adopted and issues in contemporary online gaming environments, in particular that which relates to the gambling industry, can be found in the respective sections of this thesis: Chapter 3 for the methodology, Chapter 4 for a detailed description of the challenges facing Virtual Worlds, and Chapter 6 for the literature on the gambling, specifically offshore gambling, industries.

Finally, I define the environments considered herein, and examine the extent to which the results and implications may have broader application. Specifically, the increased existence of many of the arguments traditionally applied to Virtual Worlds in contemporary social media platforms suggests that the issues identified, and the resolutions proposed, may have relevance to the future development of these spaces.

2.1 Game Studies My work, while multi-disciplinary, is primarily situated within the ‘game studies’ field. The field itself is relatively new, generally said to start with the work of Aarseth (1997) and Murray (1997), and has developed steadily since then with studies including general work on game structure and rules (Salen & Zimmerman, 2003) and ethnographic studies on specific games (Taylor, 2006). That said, earlier work from scholars such as Huizinga (1955) and Caillois (1961) examining play within society, and many of their findings, are relevant and dominant in the contemporary literature.

Much of the early work on games focused either on narrative (Aarseth, 1997 & Murray, 1997) or on the concept of the ‘magic circle’ (Salen & Zimmerman, 2003); that is to say, a degree of separation between the real and Virtual Worlds. This work often focused on the rules and structure of the games, but underlay a much more fundamental issue – the extent to which games form part of the real world, causing and dealing with real world emotions, affecting real world relationships and causing the transfer of resources, whether time or money, from one to the other. The concept of the magic circle continues to weaken as games rapidly become social spaces where relationships and

21 resources frequently transfer between the ‘real’ and the ‘virtual’. As Virtual Worlds increasingly lost their independence from the real world, so issues of regulation arose.

While work on the regulation of games (for example, Lastowka & Hunter (2003)) has traditionally followed a different track than the ethnographic studies of Dibbell (2006) and Taylor (2006), both types of research raise important questions that I consider in this work. Indeed in recent years these works are beginning to converge, as seen in work by Humphreys (2009) and Suzor (2011).

The prior work has left many questions unanswered, including those highlighted by Taylor (2006, pp. 125-162) around questions of culture, real money, cheating, production, rules and ownership, and it is these questions that I return to and discuss in more detail in Chapter 4. Below, I shall provide an outline of these issues, the context found in the field in which they originate, and how they relate to the underlying questions: establishing the community norms, and evaluating mechanisms to regulate the community.

2.2 The “Magic Circle’ & ‘Pro Gamers’ The ‘magic circle’ has long been a hotly debated topic in Game Studies, and its weakening is one of the core issues of this thesis. Essentially, the concept exists as a boundary between ‘play’ and the ‘real world’, indicating that a different mindset and set of rules exist when participating in a playful activity (be that a game on the playground, a board game, or a MMORPG) than ordinarily exist in our ‘real lives’. It is clear that participants certainly care if others cheat in a playful environment (Consalvo, 2007), however it is once real world consequences start to arise that government and other regulatory bodies become interested in the space, and where a form of regulation outside of the game space becomes significant.

The magic circle is also frequently cited as a legal defence. Fairfield (2007) & Bartle (2006, p. 44-50) outline this argument in detail, but it in essence refers to the magic circle as a protector of play; that perhaps theft shouldn’t result from in-game theft just as an assault charge very rarely results from a fight on an ice hockey rink. Similarly, it is proposed that the magic circle protects narrative by demarcating the real and the virtual; that sexual acts and murder are frequently found in books has come to be accepted, however the acting out of the activity in gaming environments may lead to regulators taking a different view. Proponents hope that by clearly demarcating the game from the real world, such challenges will be avoided.

I argue (Woodford, 2008) that the concept has become so widely adopted that it has lost meaning, if indeed the modern interpretation originating from Salen & Zimmerman (2003), has any validity.

22

Salen & Zimmerman’s re-appropriation of the term, built on definitions offered by Sniderman (n.d.) and Apter (1991), who consider the game-space as a frame, similar to the work of Goffman (1974).

While I do not intend to continue the debate surrounding the magic circle, it does have one particular application. Bartle (2004), the game designer often credited with founding the Virtual World genre, argues that professional gamers “for whatever reason have a different magic circle to the majority” (p. 16). It is possible to find a similar statement in the work of Huizinga (1955), who states:

We see this very clearly in the official distinction between amateurs and professionals [in sport]. It means that the play-group marks out those for whom playing is no longer play, ranking them inferior to the true players in standing, but superior in quality. The spirit of the professional is no longer the true play-spirit; it is lacking in spontaneity and carelessness. This affects the amateur too, who begins to suffer from an insecurity complex (p. 197).

Bartle and Huizinga both argue then that professional players are somehow separate from the traditional idea of a player. In persistent environments in which the play (or work) of one participant has a direct impact on the others within the space, it is impossible to ignore them. Such players have a significant role in determining the culture and economy of environments, an element I shall return to in more detail when I discuss botting and real money trading within Eve Online in Chapter 5, however it is worth noting, in the context of community norms, that Bartle’s statement that commoditisation leads to other players becoming “very disenchanted over time” (p.16) highlights the importance of dealing with players who might be said to be cheating.

2.3 Cultural & Media Studies Much research on virtual environments has taken place within the domain of cultural and media studies, particularly by adopting ethnographic methodologies. This research provides a somewhat historic perspective on those platforms which are no longer active (or no longer mass-market), answers questions about how behavioural norms and cultural practices have evolved in such environments, and also poses many of the questions that still exist around topics such as ownership, intellectual property and virtual property, and how such practices shape and exploit the power relationship that exists between operators and participants. Accordingly, these areas are often at the core of disputes that arise between stakeholders.

Among the most regularly cited texts are those of Dibbell (1998, 2006), who famously documented his experience in a text-based virtual environment through its formative years, including the famous case of “”, which first brought questions of the emotional impact on players

23 into the mainstream, and subsequently went on to examine the extent to which players can earn a full-time income in virtual environments. Other prominent texts are those by Taylor (2006, 2006b), arguing that players are already invested in these environments and are ‘productive players’. Taylor also considers the ways in which developers perceive players, and considers approaches from participatory design to evaluate methods for further engaging players in the design process.

Taylor also highlights questions around the topics of culture, real money, cheating, production, rules and ownership, and offers a suggestion that players could be given a “place at the formal design table”, arguing that this might increase innovation in game design, and that they should be involved in some form of decision making power when it comes to adjudicating game disputes. This is an argument taken up by Humphreys (2009), who considers the policy implications of the shift to player participation in the production of game assets, stating that they “imply the need for coordinating and regulating institutions that are capable of flexibility and responsiveness to change. The sedimented fixity of current institutions — copyright, classification, industrial labour relations, the national boundaries of policy-makers — causes them to struggle in the face of these challenges” (p. 64).

One position adopted by authors such as Doctorow (2007) is that online games are dictatorships. Just as Lastowka (2010) was later to do, he refers to the example of Disney theme parks, noting that the rules enforced and currency used by Disney on its private property can be compared to the scenarios we see played out in contemporary Virtual Worlds. Doctorow offers the suggestion of an open-source world, while noting: “It’s my sneaking suspicion that the only people who’d enjoy playing World of Democracycraft would be the people running for office there” (p. 4). Galloway (2006), whose work is in software studies investigating code and regulation, makes a similar argument to that emerging from cultural studies, noting that the basis of the internet is control, as opposed to freedom, and suggesting that any type of democracy would be difficult to implement online.

Doctorow does highlight the risks of having no regulation; that a participant may build a balance with substantial real-world equivalence in an environment like Second Life only to have it confiscated if they act in a way the developer does not like. I return to this discussion in more detail in Chapter 4 with regard to gaming environments and Chapter 6 in the offshore gambling industry, considering the various options that have been put forth for regulating them. In short, both democracy and industry self-regulation have been shown to be problematic solutions to the type of issues discussed.

24

Ludlow & Wallace (2007) detail accounts collected in the publishing of “The Second Life Herald”. Amongst these are several examples of interaction between participants of Second Life and the publisher, Linden Labs. They state that "[t]ime after time, the Herald received reports from SL residents who had been banned from the world or had had their accounts temporarily suspended without being given the slightest clue why. Nor can residents confront their accuser." (p. 237) and that "...the authorities of Second Life and many other virtual worlds wielded their power inconsistently at best, and often in an ad hoc manner that made it difficult for residents to know what the rules actually were at any given moment" (p. 241).

Stark (2009) offers an approach, which he labels dissonance, that may be useful when considering these participatory spaces, from new media in general to gaming environments in particular. He offers the example of the U.S constitution, stating that the checks and balances that result from the multiple levels of government provoke friction, and thus productive output (p. 5). This friction emerges, Stark argues, from different participants having alternative principles of evaluation in-play (p. 6). He offers examples where these alternative principles exist on an individual basis, with incommensurable frameworks of evaluating work vs. family life, career progress vs. loyalty or locality, desire for vacation against the need to save, but argues here that it also exists between different actors within the same company, where different actors have different mechanisms of evaluation.

This leads to a form of governance that Stark labels “heterarchy” – that is there is no hierarchy of these evaluative principles, they all feed into the same process (though not, it would seem, necessarily equally). The different actors, with different evaluations of worth, must, as Stark notes (p. 27), be constructive – this he refers to as “organized dissonance”. For such an approach to governance to work, each of the actors must “be principled, with the adherents of the contending frameworks offering reasoned justifications”, and understand that the ultimate resolution is not ‘once-and-for-all’ but an ongoing temporal, dynamic, process. As Chapter 6 demonstrates, these principles are identifiable amongst participants in the offshore gambling industry, and would seem a sensible foundation on which to consider how self-governance in other online environments may operate.

2.4 Game Design Many senior game designers have contributed, either directly or indirectly, to the academic literature and emerging debates about governance and regulation of these online environments. Three years into the operation of LambdaMOO, , the creator of the game, abdicated power to the players with a statement indicating that LambdaMOO was taking a “new direction”

25

(Curtis, 1992), one in which the players would have a greater responsibility for their day-to-day experience within the environment. As Mnookin (1996) puts it “the oligarchs instituted a petition system, a process through which the players in LambdaMOO could enact legislation for themselves”.

This system allowed the participants of the environment to propose, discuss, and vote on changes to the environment. Before voting, these were vetted by the administrators to ensure such changes wouldn’t harm the administrators, host, or violate real-world laws. Thus the system was to fail, and Curtis acknowledged the players still saw him, and other administrators, as omnipotent.

Koster’s (2000/2006) “Declaration of the Rights of the ” and “Advice to Virtual World Admins” are significant documents in discussing the potential regulation of virtual environments, and are discussed in more detail in Chapter 4. In essence, the former of these attempted to establish a bill of rights that publishers should adopt to protect players. In doing so, Koster met with criticism from game designers who reviewed the proposal, and so the document evolved into the “Advice to Virtual World Admins”, which was phrased in such a way as to be a guide to prevent designers and publishers form losing their player base.

Bartle (2006b) also proposed a model for the governance of Virtual Worlds that, he states, mirrors a rock-paper-scissors formation. However, the model’s realistic application is more hierarchical, with the real world, and its governments and courts, sitting at the top of the hierarchy The second stage in Bartle’s model is Virtual World developers, who he suggests have complete rights in the Virtual World “to the extent that they are allowed to by real-world governments’. Finally, at the bottom of the model, are the players, who can organise “their own rules within the constraints of the Virtual World’s physics and the real world’s laws”. Bartle’s contention that this is rock-paper-scissors is founded on the belief that “it should be possible in a democracy for the players of a Virtual World to prevail over real-world governments through the power of their vote”.

Juul (2010), talking primarily about casual games, argues that “Any multiplayer game takes on meaning from the social relations between players” and that “social game design isn’t about creating a game that is strategically deep as much as it is about making sure that the game, in turn, creates interesting interaction between players” (p. 121, emphasis in original). Bartle (2004) discusses this designed behaviour, taking the inherent preferences of players as a starting point (i.e., Bartle’s player type model – explorers, adventurers, griefers and achievers) and then designing features into the game that provokes those behaviours you wish to emphasise. Bartle details at length (p. 503- 526) the development of player psychology and the implications this has for designers, but for my current purposes it suffices to say that we must, at the very least, consider the impact of design

26 decisions when considering the reasoning for the existence of community norms and participants’ motivation for acting.

Even community norms, however, do not evolve from the player community alone. Rather, they are a response of the participants to the community in which they find themselves, a community that is likely itself the subject of negotiation between professional designers, marketers, lawyers and management. In order to understand the norms identified in these environments, it is necessary to first understand the way it was designed, and the implications of that design for the players – a topic I consider in more detail in Chapters 3 and 5 with regard to Eve Online.

While this is only a small sampling of the type of issue to be addressed, it serves to provide context for the remainder of this chapter, in which I discuss the bounds of the approach I take to both online environments and regulation, and in which I address a number of academic and terminological debates that underlie this thesis.

2.5 Regulatory Approaches Attempts to regulate games in some form have existed for as long as games themselves; however, consideration amongst legal scholars of the type of contemporary virtual environment I am discussing here can be said to have started with the work of Lastowka & Hunter (2003), who query whether Koster ‘s (2000/2006) “experimental notion of avatar rights, and a Declaration defining them, amount to the ravings of an over-imaginative game designer...or whether there might actually be something here worthy of legal notice” (p. 71).

They argue that “We might well conclude that, whatever rights a cyborg may have, those rights should be addressed exclusively through remedies fashioned and provided for within the Virtual World” (p. 95), and to do otherwise will cause “cross-jurisdictional legal issues too mid-boggling for courts already overburdened” (p. 95). However, they note that plaintiffs may be unsatisfied with such a remedy, particularly in cases where the loss has a real-world cash value.

The challenge, then, is to provide a system that satisfies all parties. Without judging whether the courts are overburdened, it seems that a remedy that suits all participants in the environment would be preferable to one that relies on the legal system. Such a system would also have benefits beyond reducing the burden on courts, a solution native to the environment’s participants overcoming Lastowka & Hunter’s warning that courts must acknowledge that “these are separate places, with a separate community, separate laws, and separate rights”.

27

Regardless, as I will explore in Chapters 5 and 6, and as Lastowka & Hunter acknowledge, “Sometimes the inhabitants of these worlds will come down to our world, to have recourse to our law, and gain protections against their gods. But more and more they will live out their lives in a different world... In time perhaps they won’t care what we think or what our laws say. They will live and love and law for themselves”. (p. 98). To this extent, there also needs to be a process that makes courts aware of the norms existing within the environment itself.

Lastowka & Hunter’s (2003) argument, then, boils down to three key problems: the ‘’ problem – that administrators, or now more commonly publishers, have the ability to turn the world off and thus have the ability to do anything else; the ‘rights of cyborgs’ – by which they refer to the emotions felt by the human controlling characters within the virtual environment; and ‘cyborg skeptics’ – those who consider Virtual Worlds to be immune from law.

Stated otherwise, the first concern relates to the limits that publishers might be able to enact on free speech. The second, they contend (p.89), provides a justification for extending rights to players. Finally, the ‘cyborg skeptics’ are problematic, especially in a legal sense, due to a fear that such may ignore that each virtual world “generates its own internal norms and conventions and rights.” (p. 93)

Duranske (2008) and Lamoreux et al. (2009) have since considered how US courts may resolve such cases, although in practice this remains unresolved. Those cases that have so far been presented to US courts, most famously Bragg vs. Linden Labs, have all been resolved prior to judgment, thus the only thing we know so far is that terms of service, as written, are not guaranteed to be accepted by courts but are, rather, subject to standard tests of equitability (Duranske, p. 30-34).

Suzor (2010) presents an analysis of the enforcement of norms in virtual communities, suggesting that whether enforced by territorial courts or equitable relief, through contract or private law, any decision must give consideration to the community norms. There are, however, issues in identifying these norms as they are likely to differ amongst participants, and Suzor also draws attention to potential issues in enforcing norms once identified. Chief amongst these is that internal norms must always be enforced with consideration to the state rules, which take precedence (p. 6), and that providers have the facility, if not necessarily the inevitable right, to implement non-legal enforcement through their control of the software, either to enforce punishments or to hard code the software to prevent the behaviour in question (p. 7-8). It is these conflicts and the resultant practices that I investigate with this research in the hope of bringing some specific clarity to how these questions of governance and enforcement could be resolved in the future.

28

On the question of governance, Suzor draws a contrast between the hybrid governance regimes in environments such as Eve Online and A Tale in the Desert, where players have the possibility of participating in the development of environment rules, but the operators retain the ultimate power to make and enforce regulations, and the community governance of platforms such as Wikipedia. In the latter case, a whole governance process founded in social conventions has been established by, and continues to be reinforced by, the community (p. 9). This also serves to highlight the necessary difference between gaming spaces where participants may have no reasonable expectation of ownership or of extracting value, and those such as Second Life where the community, through statements and inferences made by the platform owner, have an established community norm of ownership, and thus the potential for legal redress if such ownership is terminated or otherwise reduced in value (p.13-17).

Suzor concludes that “the contractual framework should accordingly support internal community governance where (a) the norms are legitimate and (b) the community is otherwise unable to satisfactorily address the wrong internally” and recommends that “(1) breach of internal community norms should not be directly punishable by territorial contract law or by private law such as copyright; (2) equitable relief should be available where community governance is unable to adequately address wrongdoing [and] (3) the grant of equitable relief should be limited to circumstances where the norm and punishment is legitimately created and imposed”. However, to do so requires that sufficient information is available.

Lastowka (2010) builds on much of this earlier work, discussing the history of virtual environments, the topical issues around regulation, including property rights and issues of jurisdiction when participants and platforms are located in different countries. Interestingly, as with Doctorow (2007), he also offers the analogy of Virtual Worlds to the Disney corporations Magic Kingdom theme park, noting that Virtual Worlds, like the theme park, have limited rights to police what happens within the environment; however, the real world (in the case of Disneyland, the Anaheim Police department) reserves the right to intervene in particularly serious cases. This, perhaps, is a model worthy of further consideration for Virtual Worlds.

The question that arises from this prior work is how these norms should be identified and established (i.e., that a norm where enforcement is sought is legitimate), whether any can be said to be common amongst virtual communities, and whether it is feasible for those outside the environment to gain sufficient understanding of the community norms to reach equitable decisions. As Suzor notes, these communities “are rarely, if ever, homogenous” and that “it will often be difficult to identify a particular social norm in any given community” (p. 20). He also suggests that

29 governance in these environments is a dynamic process between participants and provider, and that there is ongoing conflict between different sections of the community, and within the company.

2.6 New Media & Participatory Cultures As I indicated in the introduction, disputes of this nature are no longer specific to games, if they ever were. While the focus of many of the academics I have highlighted previously has been Virtual Worlds, many of those arguments extend to contemporary online environments more broadly, including social media platforms. As Reynolds & de Zwart (2011) argue in proposing their arbitration body, “Social networks have been included in the definition above as it seems that many of the same issues and disputes and modes of resolution that apply to in-game items, especially those in games based within social networks, apply equally to access to the network itself” (p. 8).

Jenkins (2008) also highlights how recent trends in new media and digital culture, particularly those associated with user-created content, indicate that the kind of issues emerging in the games industry will become increasingly significant for the wider media industries as they shape the everyday lives of citizens and media consumers. Already there have been debates over the community management policies of platforms such as YouTube, highlighted by Burgess & Green (2009), who describe that YouTube, which like the games described previously is a participatory environment (i.e., the participants generate the majority of the content which makes the site popular and viable), has faced significant backlash from their users for failing to understand the culture that has developed around the platform, for its refusal to implement technology to support community aspects and for increasing commercialisation. Such disputes will only increase over time, and will impact on those who gain an income or some associated celebrity from YouTube.

Humphreys (2008) also considers the intellectual property implications for users of social network sites, building on foundations laid in Humphreys et al. (2005), arguing that intellectual property and copyright legislation is not always suitable for the mix of amateurs and professionals found on social networking sites. She states: “If a simple request for clarification generates a thread with over 80 posts and almost inevitably ends with ‘you need to consult an attorney’, then there is a problem”, and that the difference between “amateurs and professionals, or the social and financial economies of a social network” are played out through a consideration of intellectual property (p. 6). This is similar to the argument made by Bartle (2004), where he argues that casual and professional players can be seen to exist in separate game worlds, and that problems arise when they interact. It is these different expectations that underlie the need for regulation, so that everybody participating knows what to expect from the platform, how to resolve disputes, and, more importantly, how to co-exist together in these online spaces.

30

Burgess & Green (2009) also focus on the question of internal governance; that is, how YouTube have chosen to govern their user community, and the impact of users on that governance model, describing YouTube as adopting “a sort of light-touch governance – the rules and permissions that operate on the website are ‘just enough ‘to enable all the uses that take place without necessarily shutting down other possibilities”, while noting that this is “responsible for the ongoing and escalating conflicts about the meanings, uses, and possible futures of YouTube” (p. 104). They also highlight the challenge of co-creation, bringing “new relationships of power and responsibility between users and platform providers”, and signalling the need to support diversity while respecting the agency of the users who produce the value, “whether economic, cultural or social” (p. 104). Again, these serve as important points of comparison for the potential regulatory systems discussed in this thesis.

2.7 Norms While the above literature provides context to the issues discussed within the thesis, and the boundaries of that research, I now consider means for identifying practices within those environments. The approach I put forward, which varies from traditional approaches to considering both online platforms and governance practices though has become more visible in recent years through the work of Suzor (2010), Humphreys & de Zwart (2012), Lemley (2012) and others, is that of norms. As a working definition of norms, I take that of McAdams (1997), who defines them as “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” (p. 340).

Much of the norms literature exists within the domains of law and economics. That is, legal scholars have examined the norms that exist in everyday life and the way they are accounted for by the legal systems that codify our behaviour. Meanwhile, economics scholars have looked at the justification for these systems of norms, applying concepts of risk and reward to examine why we behave in such ways, the cost of doing otherwise, and the risk that we take when we try to enforce such norms in others.

To the extent that norms exist in our everyday behaviour and are codified by parliaments and other law-making bodies, they exist in Virtual Worlds and other online spaces. These generally take the form of codified terms of service documents that participants agree to as a condition of entering, and are generally enforced by the code that limits the ways in which it is possible to act. However, such codified implementations often bear little resemblance to the norms established and practiced by the community.

31

The norms literature also has applications beyond this comparison; the model of willpower norms (Strandburg, 2004), for example, also provides us with a way of examining player behaviour shaped by personal benefit rather than societal pressures, such as why players may show leniency to new players even when it is not in their immediate economic/strategic interest to do so.

An outline of norms & the law The norms literature has been developed over many years by a number of authors. My focus here is on the theories put forward by two authors, McAdams (1997) and Strandburg (2004), whose work, building on theories first suggested by Austin (1832/1954), develops understandings of norms grounded in the behaviour of society, thus suggesting applicability to the online environments that form the focus of my research. They also consider the existence and enforcement of such norms in conjunction with the legal systems in a similar way to which I am proposing online environments are able to co-exist with governmental regulations. Finally, I consider the work of Ostrom (1990, 2002, 2008), who explores the concept of self-governance and commons through the use of norms theory.

Returning to the original definition I offered of norms, that of McAdams (1997), who states that 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” (p. 340), it is worth noting that he quite clearly distinguishes between law and norms, equating this difference to that between “formal and informal rules” (p. 340).

He also highlights their importance, noting that norms sometimes govern behaviour without regard to the legal rule, making the implementation of such a legal rule unimportant, and also that legal rules sometimes “facilitate or impede the enforcement of a norm” and that “new norms arise in the presence of different legal rules, making the relevant policy choice one between two or more law- norm combinations” (p. 340).

Finally, as we consider the definition, it is worth noting the risk that the term, as with many in the academic literature, becomes so broad as to lose all meaning. McAdams himself comments that the term is perhaps used by different theorists to mean different things (p. 341), and quotes Sunstein (1996) cautioning that “a reference to social norms will become a conclusory response to any apparently anomalous results” (p. 945), arguing that norms could end up explaining everything, and thus nothing.

While these issues of terminology exist across fields, I feel that the fundamental application of norms theory; that is, the identification of common practices, the understanding of their evolution, and enforcement mechanisms, is sound. Social norms may become a ‘catch-all’ term; however, what

32 is significant for my purposes is not the application of specific terminology, but the significance of the norms observed for understanding the regulatory challenges facing the participants in these online environments.

Ellickson (1991) discovered, in a book investigating dispute resolution amongst ranchers in California, that there are communities who enforce informal norms amongst themselves in areas of trespass and boundary fences, thus resolving conflicts without the need to involve the legal regime. He then generalises these results, concluding that the law and norms are alternative methods of controlling social behaviour, each providing a way of overcoming problems of collective action.

Building on this work, Cooter (1996) has argued that courts should enforce the norms (when proven efficient) of a given industry by incorporating them into the legal rules governing contracts in that industry. Less formally, Sunstein (1996) has argued that the law has the ability to strengthen and weaken norms by simply making a statement. This statement is particularly interesting in light of legislation, such as the Unlawful Internet Gambling Enforcement Act, passed in the United States in 2006.

This legislation, which, per the FDIC (2010), “prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law”, remains to this day problematic to enforce. While there have been crackdowns on the industry, these resulted from key stakeholders being located in the United States. For , which I largely consider herein, the act is largely unenforceable, given that the companies it attempts to regulate are generally located outside of the United States and in jurisdictions that have no interest in enforcing US laws or desires. Yet, despite the fact the law has not been enforced, the number of players participating in online gambling and related activities has dropped steadily since the passing of the legislation, supporting the argument that the law has weakened the pre-existing norm of the online gambling ‘society’, or even strengthened one in wider society against online gambling.

McAdams (1997) thus concludes that norms matter in a legal sense because “(1) sometimes norms control individual behaviour to the exclusion of law, (2) sometimes norms and law together influence behaviour, and (3) sometimes norms and law influence each other” (p. 347). There are key points that need to be considered beyond this brief summary. With regards to the first of these, McAdams argues “any effort expended to refine the legal rule is simply wasted” (p. 347). This, at least within the context I am considering, seems to be a fallacy, not least because while a norm isn’t codified, it is only understood by immersing oneself in the community.

33

In Virtual Worlds, where a high degree of participant churn is ever-present, effort is also spent refining and codifying the legal rule, in the context of the Terms of Service and EULA documents. These documents are, for many participants, the first and only points of reference for how companies define cheating, what is acceptable behaviour within the environment, whether restrictions are placed on player aids, and for how they may interact with other participants.

It is important that these documents are made available and published in a location where participants can easily access them, so that those new to the environment are aware of these rules and are thus not subjected to the negative ramifications of immediately breaking norms working in consort with in-game laws when entering the community. While the degree to which publishing such documents actually disseminates the information to the community is questionable, and the degree to which acknowledgement of such documents is legally enforceable remains in question, codifying them is at least a first step in any enforcement attempt. As Humphreys & de Zwart (2012) argue, EULAs “are not universally enforced by the game managers or customer service team that works inside the game, and therefore many players do not see the EULAs as relevant” (p. 515).

Associated with the third of McAdams points, he notes that there is the danger ‘”that law may unintentionally change norms”, commenting that “[s]ome express concern that courts will undermine the very norms they seek to enforce, given that judges lack the local knowledge to understand the norm properly”. This echoes the concern of many game designers, notably Bartle (2005), who argues in relation to an understanding of Virtual Worlds in intellectual property law that ”[i]n all probability, it will be some time before a working legal and constitutional understanding of the place of virtual worlds is reached” (p. 208), and indeed highlights the problem of potential governmental regulatory intervention before the emerging norms of the communities are fully understood.

Finally, McAdams considers the way that a third party organisation may create and enforce obligations, offering the example of a diamond bourse (an exchange akin to a stock market for the trade of diamonds) which “enforce[s] relatively formal, usually written, rules while groups and entire societies often enforce highly informal rules” (p. 351). This is similar to the distinction in the gambling industry between bodies such as IBAS (Independent Betting Arbitration Service), which has a codified set of rules that all signed-up operators must abide by, and player founded bodies such as Sportsbook Review (SBR), which enforce unwritten rules expected by the community by impacting and reporting on the reputation of sportsbooks practically operating outside of any formal jurisdiction. I shall return to the differences in the gambling industry in Chapter 6.

34

While the above gives a general outline of the applications of norms theory, it remains necessary to find a framework (or frameworks) for the study of norms valid in the virtual environments on which this study is concentrated. In that respect, what follows is an outline of Esteem Theory and Willpower Theory, and their application.

Esteem Theory McAdams (1997) argues for what he calls an esteem model of norms; that is, that individual participants act in a given way to gain the esteem of others, and similarly avoid behaviours that will cause others to view them in a negative light. This work finds its basis in McAdams assertions that evidence shows that people “incur material costs to cooperate in situations where their only reward is the respect and admiration of their peers”. That is, people are willing to incur costs for respect, and thus we can say that it is a desirable product. Thus, in economic terms, withholding respect (or esteem) provides a costless means of inflicting costs on others.

There are several conditions that have to be met, McAdams argues, for his esteem model to be applicable, and for norms to emerge as a result of esteem. These are that “most individuals in the relevant population grant, or most withhold, esteem from those who engage in [an activity]”, that “there is some risk that others will detect whether one engages in [it]” and that “the existence of this consensus and risk of detection is well-known within the relevant population” (p. 358). That is to say, for an activity to be considered breaching a norm, you need the community to be able to find out that somebody is participating in that activity, and you need enough members of the community to care that they are doing so. If both of these conditions are met, then the other condition is simply that the participant partaking of the activity must be aware that the prior two are met.

One of the processes that McAdams argues creates consensus is the ability to exit; that is, “individuals who wish to act contrary to the consensus may leave the group, possibly to join groups of like-minded individuals”. This of course is classically not present in Virtual Worlds, where the cost of exit is frequently considered high due to the social ties and time investment stored in the original environment. McAdams doesn’t list this as a pre-requisite, merely one of many factors that have the ability to create consensus, and needs to be considered when applying this theory in the context of virtual worlds and other environments. However, such worlds can also be seen as similar to society, with each having several “groups of like-minded individuals”; those who wish to opt out of a community norm may not have to leave the game, but simply join another group of players, e.g. moving from a mission runner to a pirate in Eve Online, or an achiever to a griefer in Bartle’s typology.

35

In general, consensus can be easily formed. McAdams cites Pettit (1977/2000, p. 744) as stating that individuals typically ”approve of nearly everyone who benefits him in some respect through performing a collectively beneficial action and disapprove of nearly everyone who harms him through performing a collectively nonbeneficial action”. Thus, McAdams argues, because granting esteem has no associated cost, individuals inherently grant esteem to reinforce behaviours that benefit the individual and punish those that harm him. This behaviour, collectively applied to a larger society, forms consensus on longer-term beneficial behaviours, something only emphasised and exaggerated through group discussion.

The second condition mentioned previously is that there must be an inherent risk of detection. McAdams offers two ways in which this could come about, either accidently acquiring information about others’ public behaviour in the course of our everyday activities, or by hearing the information from a third party. McAdams comments, “when individuals share a consensus, some of them will enjoy passing on information about violations of the consensus. The conversation we call “gossip” is often experienced as a benefit, not a cost, and it usually consists of information about how others have deviated from ordinary behaviour” (p. 362).

Both conditions are as equally valid in online communities as they are in the societies McAdams discusses, with public behaviour being both witnessed in the persona of an avatar and through in- environment and out-of-environment conversational channels such as chat rooms and forums. Those latter sources also provide a venue in which players can discuss the behaviour of others, meeting the second condition discussed above.

The traditional application of this theory is fairly obvious, with McAdams offering the example of littering; while the quickest way for us all to dispose of our litter would be to just toss it away where we finish with it, society has established a norm that we place them in designated garbage containers so as not to cause a build up of litter on the streets. McAdams offers an economic evaluation of such a norm (p. 365), but it suffices for our purposes here to say that there are sufficient numbers of individuals who view littering as a negative activity to make the esteem cost of littering more valuable than the time saved by doing so. There exists an interesting comparison with norms that impact recycling.

For any individual, both recycling and avoiding littering is sub-optimal behaviour; society as a whole clearly benefits from the streets not being littered and from waste products being turned back into useful raw commodities. This is enforced both legally, in that there are now littering ordinances in most cities and countries, and through pressure invoked by other members of society, who expect

36 people to place their garbage in waste disposal units and to recycle appropriate products, though in the latter case there is no legal penalty for failing to do so. This, then, is an example of a norm that became codified, and is an example of a norm that exists without the presence of regulatory support.

Finally, it is worth noting that McAdams argues for a feedback effect, in so far as “one individuals decision to refrain from engaging in X has the externality of raising the price that others must then pay for engaging in that behaviour” (p. 367). This effectively highlights the development of a norm: as an increasing proportion of a community becomes compliant with any given behavioural norm, the cost in terms of combined esteem lost increases, increasing the chance that others will come into compliance rather than accept the cost.

In considering online gaming environments and the offshore gambling industry, there are two stakeholders who might be impacted by Esteem Theory. The first is organisations, and the concept of Esteem Theory would seem solid here as it is always beneficial for a service provider to have their customers hold them in high esteem and, as I will discuss in Chapter 6, there is precedent for sportsbooks paying players even when they believe they do not have to in order to secure the esteem of the industry and other potential customers. This same principle could be extrapolated to platform operators. For the other stakeholder though, participants, while many would like to be held in high esteem by other participants, there are certainly some (such as the Eve Online alliance ‘Goonswarm’, discussed in Chapter 5), for whom grief play, and thus having other players hold them in very low esteem, is the sole objective of their play styles. Such considerations need to be kept at the forefront when considering whether a norm-based theory such as Esteem Theory is valid for disputes between participants.

Willpower theory Strandburg (2004) presents her norms material from the perspective of temptation; that is, she argues that many social norms are targeted at tempting behaviours, but that self-control has been neglected in the literature surrounding norms. She argues that norms are divided into two groups – being co-ordination norms (where “the utility I receive for performing a type of action depends on others also performing the same action” (p. 11)) and sanction-driven norms (whereby they are maintained by “imposing penalties, often reputational, for non-compliance” (p. 11)).

This latter group also includes situations such as the Prisoners Dilemma, and more generally what Strandburg refers to as “collective action” or “free rider” problems” (p. 13); that is, it becomes difficult to provide a social good, such as street lighting or road maintenance, where everybody stands to benefit if there is not a system that compels everybody to pay into the fund which pays for

37 such developments. That is, there needs to be “a mechanism to prompt individuals to make collectively optimal choices and to deter free riding” (p. 13).

Strandburg then builds on the work of Hetcher (2004) to argue that there is potential for a third category, epistemic norms, which emerge as individuals conform to the behaviour of others as a way of “economizing on information costs” (p. 15). That is, rather than researching the optimal way to do something, an individual may follow the actions of others, considering that this norm reflects the wisdom of the community as a whole. This, like the co-ordination norms discussed previously, does not require (or benefit from) enforcement, as obeying the norm is effectively its own reward, and the costs of not conforming mostly fall on the individual concerned.

She goes on to note that all of these theories seem insufficient to “explain the social reality” (p. 15), which she argues is that penalties are often imposed on those who fail to exhibit behaviours that have little social impact. Instead, she argues that social norms may evolve as a way of dealing with problems of temptation, and the avoiding thereof. She continues to claim that the “combination of effects on the community and internal self-control issues can strengthen the enforcement of social norms”. This she refers to as the Theory of Willpower Norms.

Strandburg argues that a social norm impacts on self-control in two ways: by imposing a penalty for yielding to temptation and by reinforcing mental self-control strategies of the tempting behaviour “so that giving in to temptation is less attractive because it is viewed as a violation of a rule rather than as an isolated choice” (p. 17). She further subdivides these self-control problems into three categories: those that affect only the tempted individual (overeating), those that have negative effects on others (drinking before driving) and those that arise in situations where group behaviour requires co-ordination (drinking alcohol at a business lunch before a group project).

Strandburg goes on to cite numerous applications, from the sharing of information to the risk of exposing imperfect information about individuals. This leads to what is for my purposes the interesting discussion emanating from her work: the employment of legal regulation to bolster self- control. She contends, “[l]egal rules, especially if enacted by statute, may be even less flexible than social norms” (p. 56). From the earlier discussion on Esteem Theory, it was concluded that one of the key pre-requisites was having sufficient information to form a consensus, and the idea of the law restricting this information could have significant impact on the ability of social norms to form.

Interestingly, Strandburg, even with reference to McAdams, feels there may be a case for the law to involve itself in online communities, stating that even though ‘netiquette’ forms in such environments (itself an example of an informal norm), there are factors that make online

38 communities more problematic than their real world counterparts. She offers the examples of online conversations being maintained in a searchable archive (deliberately or otherwise) and online communities having corporate sponsors who are “silent observers of the interpersonal exchange and may also communicate the information beyond the community. These corporate sponsors may not be constrained by community norms about disclosure [and] they may in some instances have access to information that maps an online identity to a real world identity” (p. 60-61), highlighting a potential conflict between community norms and those norms established in business and corporate practice.

She provides two potential solutions to this: requiring that websites give clear notice of their policies, which she argues may need to be tightly regulated “to avoid obfuscation” (p. 61), and, more interestingly, “to subject website owners to tort liability to the extent that their behaviour violates the social norms that pertain to other members of the online community” (p. 61). That is, she argues that companies should be liable not for enforcing their Terms of Service, but, rather, for enforcing the social norms developed by their users.

She builds on this, arguing that the expectations of privacy in an online community “should take into account the social norms of the group in which the disclosure occurred” (p. 66) and that expanding the privacy torts in this way may also have potential for dealing with what she refers to as ‘buddy- bots’, but are effectively artificial intelligences asking and answering questions in some form of online community, arguing that “it may be more and more reasonable to hold these virtual individuals to the standards set by appropriate standard norms” (p. 66-67).

Understanding how norms are created and enforced in a community is a key aspect of self- governance approaches. If we are to accept that the participants of an environment, including the platform operator, are able to govern themselves, then it is important that those involved with the process have the knowledge on how to shape participant behaviour, both through the uses of formal legal documents, software and societal pressure. Simultaneously, when such norms are breached, participants need to be able to sanction those committing the breach, while transparently making the remainder of the community aware of both the breached norm and the sanction, so as to act as a discouragement for others to violate the same norm. As such, both esteem and Willpower techniques provide means for doing this, and in subsequent chapters I will return to examples of these techniques in practice, in both the offshore gambling industry and Eve Online.

Norms, commons and self-governance The work of Ostrom (1990, 2002, 2008) spans two important areas of my research, those of norms and self-governance. Ostrom’s work set out to consider the concept of the commons, that is “a

39 resource shared by a group of people … [which] can be community- (sidewalks, playgrounds, libraries and so on), or it can extend to international and global levels (deep seas, the atmosphere, the Internet, and scientific knowledge” (Hess & Ostrom, 2007, p. 4).

One must apply some caution when using terminology across fields. In the context of norms, Ostrom (2008) describes rules as “linguistic statements similar to norms, but rules carry an additional, assigned sanction if forbidden actions are taken and observed by a monitor” (p. 14); however, ‘rules’ is, of course, a loaded term in games literature, with competing definitions (Juul, 2005; Sicart, 2008), so it may be the case that a rule in the context of norms is not a specifically written or implemented rule within the game or environment being considered.

The Ostrom Framework Ostrom (2008) offers a framework to explore the “general theory of institutional change”, describing a structure within which to identify the norms, rules and other features namely the Institutional Analysis and Development (IAD) framework developed by the Workshop in Political Theory and Policy Analysis. Ostrom suggests that it is suitable for “both the simple arenas that are amenable to specifying a formal game or an agent-based model for analysing more complex structure with too many nodes and links to be analysed formally” (p. 7).

Ostrom argues that shared norms are more likely to exist in small communities where the existence of a norm among the community members is sufficient, without the need for enforcement mechanisms. When new members join the community, or an existing member tries to deviate from the community norms, the community is more likely to switch to a rule-based system, with sanctions and a means of monitoring the behaviour of community members (p. 21-23).

Norms, for Ostrom, are “preferences related to prescriptions about actions or outcomes that are not focused primarily on short-term material payoffs to self” (p. 12). She argues that while it is possible for a norm to exist specific to an individual, offering the example of truth-telling, but that most norms are acquired from the community and are subject to change (or, in my prior terminology, negotiation) by the community, with the risk of others in the community discovering the norm- breaking act reinforcing the internal value of following the norm.

Rules, then, are norms with the implementation of a sanction if the norm is not followed, and a monitor observes the act of not following the norm. Further, Ostrom suggests that “rules may be crafted in any of a wide diversity of collective-choice or constitutional-choice arenas in local, regional, national or international domains”; that is to say, the term covers everything from norms developed within the community, enforced and punished by community members, to international

40 law. As Ostrom states, “contemporary scholarship tends to focus on rules that are formally prescribed by a national government, but we must understand the process of rule change at community level as well” (p. 13).

With the IAD framework, Ostrom and her associates have developed seven broad categories within which rules exist, clustered according to their effect. In summary, these are: boundary rules describing entry and exit conditions; position rules to assign positions of authority (and otherwise – i.e., community member); choice rules defining the acts possible by different positions; aggregation rules defining how many must agree on an action for it to take place (Ostrom’s example being “the exchange of goods in a market” (p. 11)); information rules explaining the amount of information available to participants about actions and their outcomes; payoff rules defining the benefits/costs of particular actions; and, outcomes and scope rules impacting on the outcomes which may or may not be affected. Together, Ostrom argues, these rules define the structure of a situation (p. 11-12).

In standard game theory, Ostrom argues, rules are part of the “fixed factors that create the structure of the game in the first place”, and, as Banks & Potts (2010) argue, in multiple game theory, rules may vary and multiple rules or games may well be operating simultaneously to shape and guide behaviours. Thus, in both cases we can apply the structure of rules emerging from this framework to a standard game theory evaluation of actions, motivations and so forth. With the less formal norms discussed previously, Ostrom argues that they may be “represent[ed] in the preference function of the players as positive or negative parameters attached to their utility function that are invoked either by internal feelings of regret or internal satisfaction (personal norms) or by external observation of their behaviour (community norms) that lead to shame or pride” (p. 13-14). Thus, we can apply norms to these standard frameworks also.

What I am particularly interested in, of course, is how these norms and rules change over time. Ostrom discusses a few possibilities that may change these, arguing in general that, citing Campbell (1969, 1975), “policy changes are experiments based on more or less informed expectations about potential outcomes and the distribution of these outcomes for participants across time and space. Whenever individuals agree to add a rule, change a rule, or adopt someone else’s proposed rule set, they are conducting a policy experiment” (p. 17).

More specifically, she argues that norms may become rules when the community members defy them, requiring enforcement. Further, she states that both norms and rules may change through the power of a specific member of a community; who other participants fear, changing economic situations, negotiation, lack of enforcement leading to “memory loss” (under which a norm or rule

41 ceases to have meaning), conflict over interpretation of a rule and imitation of rules used in other communities (p. 20-26). While this is not an exhaustive list, it does provide a convenient point from which to begin an analysis of any community.

Ostrom also details the results of her ethnographic studies to determine the conditions needed to foster this form of rule evolution (p. 26-28), and while she states these in the parlance of farming, it is worth considering the extent to which they are applicable outside such an environment. The argument can be made that this approach is not likely to be applicable directly to the communities I am researching. This is, at least in part, due to the presence of the corporate platform owner and the inherent power differential between the platform owner and the participants impacting on the development of equitable rules, which is indicative of the platform owners’ ability to shift community norms. While some norms akin to those detailed by Ostrom certainly emerge in the social layer, ultimately the platform owners are beholden to their directors and shareholders, and need to show an economic profit for the social layer to continue to exist.

As part of this work, Ostrom considers how self-governance can arise, arguing that a change in governance strategy will occur when the benefits of the new system are greater than those of the existing system plus the cost of changing. Using an approach grounded in classical game theory, she adopts the position that central governmental structures generally cause more problems than they solve, and that communities will tend to revert to the form of governance that is most applicable for their particular situation. The argument is, then, that those participating within an industry, or in my case online environment, are well placed to regulate it.

She argues that these forms of self-organised commons are a solution to overcoming potential problems caused by “some characteristic human behaviours that lead to social dilemmas such as competition for use, free riding and over-harvesting” (p. 5), and draws a comparison between collective action (when two or more individuals act voluntarily to accomplish an outcome) and self- governance, with the latter requiring both collective action and “knowledge and will on the one hand, and supporting and consistent institutional arrangements on the other hand” (Wagner, 2005, p. 176).

Ostrom (1990) also details the principles that are required for robust institutions to overcome the commons problem, and it is here that I find her work of particular relevance. She states that such institutions require clearly defined boundaries, rules well matched to local needs and conditions, the ability of individuals affected by the rules to participate in modifying them, the right of community members to devise their own rules to be respected by external authorities, a system for self-

42 monitoring of members’ behaviour, a graduated system of sanctions and low-cost conflict resolution systems (p. 90-102). While I do not apply Ostrom’s framework specifically, I do suggest it as an area for further study, and consider many of the general principles evolving from Ostrom’s work when considering self-governance in contemporary online environments.

What Ostrom does highlight, in common with McAdams (1997), is the need for real punishment or penalties to exist for norms to be effective. Both agree that this punishment does not necessarily need to be imposed from the state in the form of a codified rule, but is just as valid, if not more so, when it comes from the community to which the individual being punished belongs, and wishes to continue to belong. As highlighted previously, when there is an uneven power relationship amongst the community – for example, if one of the actors involved in punishing is the corporation operating the environment – the punishment must be subject to significantly more scrutiny than otherwise would be the case, to the extent that it is valid at all.

It is important, however, to re-emphasise the difference between those commons and the commercial platforms that are the source of my study. Thus, while such principles are an important consideration, and in Chapter 7 I will return to a number of the principles she established when considering how self-governance may operate more widely, perhaps the key take away from her work is the importance of multiple case studies. It is only through conducting, and comparing the results of these case studies that a set of principles for self-governance can be created and validated, and I will return to this topic in Chapter 3 as I discuss the methodology and choice of case studies for this research.

2.8 Norms & Virtual Worlds A body of existing work connects norms theory and the study of Virtual Worlds, particularly with regard to the regulation of such environments, as discussed previously in the work of Suzor (2010). Similarities can be drawn between the challenges faced by citizens in the physical world and the challenges of aligning norms with codified rules and laws in Virtual Worlds, as Humphreys and de Zwart (2012, p. 508) argue in comparing the tensions between “local authorities, state governments and federal governments” and “the intersection of game rules, legal rules, and social norms”.

While this thesis seeks to highlight a number of these tensions, in particular with respect to Eve Online, it also discusses the methodological challenge faced by those tasked with identifying them If such norms are to play into any legal process. As Suzor (2010) suggests, arbitrators, courts and industry experts will be called on to identify norms in a range of environments, and they are likely to differ substantially across platforms. In this section I consider a number of different authors’

43 approaches towards norms in Virtual Worlds, and how such approaches contribute to, or differ from the approach taken in this research.

Humphreys & de Zwart Through considering a range of in-world activities, Humphreys and de Zwart (2012) identify and describe a number of areas where community and codified norms may differ. The first of these is in ‘griefing’ activity; that is, deliberate behaviour designed to be “malicious and damaging to the experience of other players” (p. 518) through a range of motivations. Such behaviour, they argue, breaks the norms of the community rather than codified terms of service or interferes with the software itself, and this behaviour may often be permitted under real-world law.

They then discuss the question of whom the responsibility for enforcing the rules falls on, which, as I will highlight in Chapter 5, was a common theme when discussing botting and real money trading activity in Eve Online. As they note, “sometimes there is a clear case for the consensual suspension of these rules, as when a game like EVE Online makes piracy and theft part of the gameplay” (p. 521). However, as Chapter 5 demonstrates, such suspension does not extend to the introduction of outside aids or currency into the environment.

Humphreys and de Zwart identify the multiple levels of governance that exist in such spaces, noting that a number of different stakeholders within the environment each play a role in the process, with players governing community norms, game providers designating representatives to manage the players, publishers responsible for managing intellectual property infringements and governments with the authority to regulate the content of the game. In many ways, this mirrors the system described by Bartle (2006b), however Humphreys & de Zwart place greater emphasis on the “blurring of boundaries” between these stakeholders, and highlight the important role that ever changing participant behaviour has on managing the process, noting that such behaviour is “both hard to control and hard to predict” (p. 521-522). This is particularly highlighted by the on-going technological battleground of botting behaviour, which I will describe in some detail in Chapter 5.

Drawing on the example of Twixt, they note that when Myers (2008) committed a range of transgressions that broke the social and cultural norms of City of Heroes, but not the codified game rules, he “attracted the wrath of the player community, inspiring death threats both inside and outside of the game world” (p. 523), and that “any players who were tempted to follow Twixt’s lead were subjected to the same social pressure and ultimately altered their gameplay or left” (p. 525). As they argue, this case exemplifies how the norms and social rules can take precedence over the formal rules and software code specified by the game developer, as the community is able to use

44 sanctions such as social pressure or exclusion to force adherence to the behavioural norms of the majority.

While in EVE the codified rules are often seen as dominant, with people accepting that ‘anything goes’, in City of Heroes the cultural norms are more significant, highlighting the importance of correctly understanding each environment before rushing to judgment on participant behaviour.

Lemley Lemley (2012) draws comparisons between Virtual Worlds and early internet subculture, allowing comparisons to be made between contemporary gaming environments and other cultures developed online, as I do here with the offshore gambling industry. Specifically, he argues that the early Internet was “a place inhabited by a small and relatively insular subculture that created its own set of norms [...] largely outside the view of the world at large” and that “it didn’t really matter what we did on the Internet because it was just the Internet. Bits – ones and zeros – didn’t have any real significance” (p. 576). This is of course an approach mirrored in the game studies arguments I discussed previously, and is highlighted in the work of Dibbell (1998) in “Rape in Cyberspace”.

Lemley argues that such an approach still persists in Virtual Worlds, and recounts a discussion with a federal judge who stated that one could not defame an avatar “because it’s not real. It doesn’t actually mean anything”. Lemley, however, argues that claims about the reputation of an avatar, or other online alias, would have the same reputational and psychological impact as if the claims were made about a real world identity.

Finally, and significantly for what is to follow, Lemley argues for the type of assemblage previously discussed by Taylor (2009). Specifically he notes how the architecture, or design, of a virtual world shapes the behaviour of participants as least as much as the legal rules or social norms of the platform, whilst highlighting the difference between Virtual Worlds and other internet-based platforms. In the comparison of norms and governance in the offshore gambling industry and the MMOG EVE Online that follows, I highlight a number of these differences.

Hickman & Hickman Hickman & Hickman (2012) consider the merits of alternative governance approaches for Virtual Worlds. They note that, as I argue in this thesis, an increasing number of scholars are arguing for bottom-up attempts at creating self-governance, or specific governance mechanisms targeted at matching the norms of online communities, as opposed to the traditional model of top-down governance that has been advocated in the past (p. 542).

45

They also argue that there is a “perceived separation” between the real and the virtual, which they justify by comparing the behavioural norms in the real world to virtual world experiences. Echoing Bartle, they argue that by opting into particular environments, and thus the norms of that environment, users “[signal] their otherness from the real world” (p. 549). They continue to argue that, in the real world, users choices are frequently limited by regulation, and that the existence of multiple virtual world platforms offers a “normative justification for regulation”; that is, regulators may feel a need to guide players to particular platforms, or to influence their behaviour within them. Again, here, as with Lemley, strong comparisons exist with the offshore gambling community. As I will detail in Chapter 6, it is the existence of multiple essentially equivalent operators that enables self-governance to operate with some success in that industry.

The authors continue to discuss the significance of norms. They dismiss EULAs as “at heart, boilerplate rhetoric that may well be unenforceable under the actual law of the land” (p. 553), while noting that the costs of challenging EULAs in courts is likely to be greater than any proceeds from the challenge, making it unlikely for participants to challenge the document, and thus leaving the only remedy as choosing another platform with a less restrictive EULA. At the same time, they argue for the importance of community norms, noting that while new participants to the environment are likely to have their behaviour influenced by the interface and the EULA, eventually the community norms come to dominate. (p. 554)

Hickman & Hickman also discuss EVE Online, identifying that the it has “experienced a history of individual cartel or bank members seizing the assets of the group, converting them to real-world funds, and absconding with the cash” (p. 556). Although the authors do not specifically address this, it is important to note that such a cash-out mechanism is, as I will discuss in Chapter 5, in specific breach of both community norms and the terms of service, as well as a source of active enforcement action from the developer. As the authors say, though, a number of participants have been successful in withdrawing in-game currency to real world currency.

The authors argue that while the press has often portrayed these activities negatively, the EVE Online community considers them part of the normal behaviour of the community. Whilst this is true for fraud or heists committed in-game to obtain virtual currency, my research shows that once the currency is cashed out for real world money, this is far less clear cut. Hickman & Hickman also argue “explicit regulation can easily overturn these norms in favour of external mandates of behaviour” (p. 556). However as I will explain in Chapters 5 and 6, attempts to regulate – at the company or mediator level – such behaviour are subject to a number of enforcement challenges that

46 lead to an on-going technical battle between those engaging in the activity and those seeking to regulate it, such that external mandates may not be as simple to enforce as the authors argue.

Hickman & Hickman continue to discuss a range of environments, noting that online platforms differ significantly in their community norms, and emphasising that when such norms are given credence in the governance process, each platform must be considered separately. They suggest identifying the rules of each platform by combining formal agreements with community norms, arguing that users of the platform are likely to give equal weight to both the general social practices that they witness and the rules set by the publisher for the environment (p. 568). Whilst both are significant, I would question whether they are equal, as the design of the environment, and the means through which the explicit rules are communicated to the user, would seem to alter the extent to which the two parts of the equation contribute to the users experience.

They also discuss a community’s structure as a significant factor in the mode of governance under which it could successfully operate, noting that a hierarchical community, in which the users have specific roles and there are higher authorities to aspire to and consult, would seem “more amenable to self-governance through shared norms than one ruled by fiat of the publishers” (p. 569). In many ways, as I will explain in Chapters 5 & 6, this reflects the situation in both Eve Online and the offshore gambling industry in which a group of users, through the creation and management of external news sources, blogs and/or forums, are able to influence a range of participants.

As these approaches highlight, discussing Virtual Worlds in terms of community norms is by no means a unique approach. However, the case studies herein both confirm and contradict a number of the principles set out above, and in doing so highlight how we may identify norms and their value both to understanding the relevance of a particular governance approach and for establishing the precedents under which dispute resolution may apply in such spaces.

2.9 Advantage Play A concept to which I return throughout the thesis, and which I wish to establish at this stage, is that of advantage play, as distinct from, and compared to, cheating. It can frequently be hard to distinguish between the two in contemporary gaming spaces, although I do argue that both exist. ‘Advantage play’ is a term frequently used in the gambling industry, and it is through this lens that I will introduce the concept, while in Chapters 4, 5 and 7 I seek to establish its application to other environments, particularly gaming platforms.

Humphreys and de Zwart (2012) discuss the problems of defining cheating, noting that while “some forms of cheating are reasonably straightforward cases of breaking the explicit rules of the game” (p.

47

516), others “may be breaking either the internal, implicit, social, and community norms of the game or the legal or cultural norms of the outside world, on the understanding that gamespace is a heterotopic space where such norms are available for reordering” (p. 516-517).

Further, they discuss players’ motivations for, and definitions of, cheating, arguing that “one player may consider using a walk-through guide to a game as cheating, and others may consider it a legitimate strategy” and that “sometimes the definition of cheating varies between the player and the publisher. What the publisher thinks of as exploiting a bug in the code, the player may think of as particularly advanced play, built on an accumulation of knowledge and expertise about the game, unavailable to lesser players, and derived through a complex understanding of the game” (p. 517). Through my use of the term ‘advantage play’, I intend to differentiate between these forms of activity, so that the boundaries between explicit rule breaches and other activities can be extricated from the term ‘cheating’.

The term ‘advantage play’ is used in the gambling industry to represent players who attempt to gain an advantage; that is, to make a long-term profit. They do this through the use of weaknesses in the gambling operators, be they technical (such as allowing related bets to be bet in a parlay) or mathematical (such as offering lines which are so out of line with the market consensus that they are subject to arbitrage). Importantly, they do this without breaching the codified terms and enforced guidelines.

For a number of years, line services and other software allowed players to gain an advantage on platform operators; some of which could be reasonably termed advantage play, while others would be considered cheating, However, until relatively recently, it was largely undetectable.

At betting exchanges, such as Betfair & Matchbook, which allow players to bet on either side of a market and place bets that may be matched by another player in the future, the source of offers are always the subject of some uncertainty. However, it became evident that some offers on popular markets during the hours before an event were generated and updated automatically. In fact, it was evident that the offers were being generated using the XML feed of Pinnacle Sportsbook – a market leader for US-facing sports. The XML feed provided a text feed of the current odds at Pinnacle, which player developed tools could then automatically place as offers on betting exchanges such as Matchbook.

The weakness, and the opportunity for players, existed because Pinnacle only allowed calls to their XML feed every 60 seconds and, in any case, the XML feed itself appeared frequently delayed by some seconds. This created a market for live information (for several reasons), which was filled by

48 line services such as G&J Update, Don Best and SportsOptions. These services meant that players had information ahead of the Matchbook market, and so were able to place a bet on one side of the market when the paid service changed, wait some seconds for the market to update, and subsequently bet the other side for an immediate arbitrage opportunity and profit. This continued for several years until Matchbook changed their commission structure and players were charged a fee on each bet made, negating the advantage. Matchbook paid all players without complaint.

The second set of tools include applications such as Casibot, which is representative of tools that were used for some years to automatically play . Blackjack, depending on the rule-set, can result in a loss of less than 1% of volume paid on average. As a result, over any significant number of hands, the platform operators were still making a profit, and thus, at first glance, it would seem odd that players would wish to automate this and generate higher turnover. However, from the late 1990s, online were part of a rapidly growing and incredibly profitable online sector. To obtain and keep customers, operators were offering 100% or greater bonuses on deposits, with a relatively small turnover requirement – often 5 times or less.

This meant that a player could deposit $100, receive $100 in bonus funds (for a total account of $200), play blackjack hands equivalent to $1000, and cash out the account. On $1000 of blackjack, the average player would lose $10, giving them a profit of $90 on the endeavour, which, given the number of operators, could be repeated almost infinitely, providing a steady income. Many did this manually, even playing $1 hands to lower the variance, and while occasionally attempting retrospective action casinos, in general, paid out with no, or minimal, intervention.

Some players saw an opportunity. To make a consistent income, minimising variance was important, and playing 1000 x $1 hands could often take even an experienced player over 2 hours, while playing perfect strategy (to keep the house advantage under 1%) required significant concentration resulting in this being a pretty tedious activity. Instead, players wrote applications to automate the process, an example of which is presented in the screenshots above. These tools evolved to become quite advanced, including random mouse movement and ‘toilet breaks’, and could be relied on to play uniformly perfect strategy that required minimal human intervention or effort.

This, in time, led to an arms race, with casinos attempting to detect the use of the application, similar to what I shall detail in Chapter 5 of this thesis, with Eve Online participants developing and using bots to accrue environmental resources while the developer, CCP, and player community attempted to detect and sanction them.

49

The reason I consider this to be cheating, as opposed to advantage play, is that such applications were a clear contravention of the terms of service – and one that the community felt reasonable to enforce. Thus, the players had gone from advantage play – profitable and legal, to cheating – profitable but illegal, though enforcement remained problematic. It is this type of distinction that is important to consider when evaluating behaviour in contemporary virtual environments, and I shall return to this throughout the thesis.

2.10 Summary This chapter has sought to establish the ‘lay of the land’. While many of the topics discussed within this chapter will be considered in more detail in the latter chapters of this thesis, a basic outline of the issues is important to have established before discussing methodological approaches and challenges and the specific results of my research into both the offshore gambling industry and Eve Online. In particular, I have highlighted that there are a large range of issues in contemporary online environments, and that while many of them were established and documented in gaming spaces such as Virtual Worlds, it is becoming increasingly evident that they equally apply to games hosted on social media platforms and, in fact, to the platform itself.

Additionally, I have established a number of underlying principles to which I return throughout the thesis, including my reliance on norms as an approach for considering both behaviour within online environments and as a means of evaluating self-governance. In this vein, I have introduced the concept of advantage play, to which I will return throughout the thesis, establishing an important distinction between a play style designed to optimise play in the environment and one designed to subvert either the norms of the environment or the codified terms and conditions.

Despite the attempt of some Asian companies to regulate gaming activity under gambling laws, such as the example of Complete Gacha, the industry still has time to adopt a pro-active approach to regulation and to consider whether a community-driven form of dispute resolution may limit the need to have further top-down governance imposed upon it. In Chapter 3 of this thesis I discuss my approach to researching both Eve Online and the offshore gambling industry, as well as outlining a number of the methodological and ethical challenges faced during the research, while Chapter 4 returns to a number of the theoretical issues discussed in this chapter and provides detailed examples of their existence within contemporary online environments.

50

3. Methodology

The methodology deployed in this research evolved over time, and that evolution is itself worthy of discussion as it raises a number of issues with such research. The research draws specific case studies from both a gaming environment, Eve Online, and from the offshore gambling industry, with those cases selected through theoretical sampling, representing times when rules, norms, or a combination of the two were in dispute due to the actions of participants within the environment. Within each case, data was drawn from a number of sources; my own experiences, community blogs, forums and Twitter conversations in the public domain, official statements from company representatives and, on occasion, other academic accounts of events, archived, and, later, analysed and further explored iteratively as I established both common factors and differentials in line with an approach to case studies I will discuss subsequently.

This chapter will outline, in brief, the evolution of the methodology, including the narrowing from a multi-sited research project to the concentration on Eve Online, and, ultimately, the addition of a more detailed focus on offshore gambling so as to provide a detailed analysis of successful and unsuccessful regulation attempts in an environment which, research showed, had a number of comparatives to the online environments on which this research concentrates. Additionally, I address some of the issues with Eve Online as a non-avatar environment (discussed in more detail in Woodford, 2012), and their implications on this research.

3.1 Environment Scoping During the first 12 months of this research, I conducted research within three environments: Eve Online, Second Life and Star Trek: Online, I had significant participation – in excess of 100 hours – in each. The goal of this early stage of the research was to consider which of these environments had the most significant and interesting cases that may be subject to regulation; partly so as to provide better examples for the eventual thesis, but also to consider which was the most challenging regulatory example, in order to increase the likelihood of generalizable results.

I began by participating in, and made observations of, all the environments discussed to date. In these preliminary sessions, I sought to gain an understanding of the mechanics and affordances of each environment, as well as the experience a new player to an environment will experience. In doing so, I participated in the environments on a part-time basis over 18 months, establishing an avatar with sufficient skills and possessions to gain a basic understanding of the environment, and in

51 the case of Eve Online joined two corporations to understand how participation as a single player differed from participation while a member of a group.

I also observed and participated in the online communities for each environment, through reading and occasionally participating in online forums, observing publicly available IRC channels set up for both out of character (OOC) discussion of the environment, and more focussed in-game (thought not necessarily in-character) discussion of the environments, attempting to gain an understanding of the topical issues within each environment; for example, the legal status vis-à-vis gambling in regard to the real money economy.

In Eve Online, the community focus was at this time on issues surrounding the PLEX (Pilot License Extension) system, whereby participants are able to use real money to obtain in-game currency and thus progress further in the ludic environment. This is especially prevalent in cases of fraud and the loss (through destruction via in-game conflict) of items in game that now has direct real world currency equivalence. Meanwhile, in Second Life, the ramifications of the Bragg vs. Linden Labs case were still being felt as other parties brought class action suits in response to Linden Labs reclaiming land they believed they owned, in addition to an ongoing debate over adult content being separated from the remainder and a reduction/elimination of discounts being offered to educational institutions.

I firstly eliminated Star Trek: Online (STO) as a source for my study. At the time, STO was a newly launched environment and the original press materials indicated it would be an environment of some promise. However, shortly after the launch it became apparent that not only was the environment struggling to reach critical mass (and indeed it was only a few months before it switched from a subscription to free-to-play model), it also lacked the points of contention between players, or even between players and providers, that would make it an interesting case study. A brief return to the environment in 2012 indicated that they had experienced issues with botting (as you would see in most contemporary environments) and real money trading, however these did not seem to garner the same response from the community as, for example, with Eve Online. From my experience with STO, the game is often contrasted with Eve as a less-serious alternative, with many likening it to a single-player game with a chat room; the focus being more on completing missions than interacting with other participants.

In Second Life, by contrast, there are frequently disputes – both between participants and Linden Labs, and between participants within the environment. There is a record of these disputes being escalated to the courts, including the well documented case of Bragg, but also the OzAnimals

52 copyright dispute and virtual land class action lawsuit, all of which significantly featured US complainants, which highlights the issue of uneven access to justice in virtual environments that I have discussed previously and will outline in more detail in chapter 4, contrasting online environments with the offshore gambling industry. However, there is also a long documented record of disputes that have not ended in legal action, and have not always been resolved to everybody’s satisfaction, such as those discussed in the Second Life Herald, outlined in the previous chapter.

Second Life also provides an interesting example of real world legislation impacting on in-world activities, with the Linden Lab policy on gambling activity being a direct response to the Unlawful Internet Gambling Enforcement Act, as discussed in Chapter 5, while also showing the problem with enforcing such regulations, as slot machines can still be found in Second Life to this day. There have been documented attempts to set up dispute resolution systems, and even political systems, within Second Life, most of which have – to date – met with failure due to the inability to enforce decisions. However, certain zones, such as Dreamland (controlled by Anshe Chung), have implemented and enforced their own measures. In general, however, the official policy, stated by Rand Linden (2011) is that:

Linden Lab cannot verify, enforce, certify, examine, uphold, or adjudicate any oath, contract, deal, bargain, or agreement made by the Residents of Second Life. Nor does Linden Lab enforce or uphold rental agreements between Residents. While you may have a valid agreement with another person, Linden Lab is not a party to and cannot resolve your dispute. Please contact the Resident involved and resolve the issue with them.

Second Life, then, had interesting examples in many of the areas I wished to study. However, it also had a number of weaknesses. Firstly, by virtue of being located in the United States it actually has a far clearer legal framework and – for a number of players – ability to challenge decisions than many other environments; filing a claim in a US court is likely to be easier for the majority of players worldwide than filing a case in the District Court of Reykjavik, as required by the terms and conditions of Eve Online. Secondly, by virtue of being challenged in court, the Second Life terms of service is somewhat evolved in comparison to many other international environments, which still compel either arbitration or a law suit in a particular jurisdiction and have not been subject to such intense legal study as those of Second Life.

It is also significant to note that Second Life is not, primarily, a ludic environment – that is to say, the purpose of the environment is to form and to continue a sense of community, and, as such, features a number of differences from other online environments where competition between participants is

53 fierce and are frequently changed in an attempt to balance the environment – with the result being that they impact on the value of players holdings, and, arguably, many more sources for friction. Additionally, the notion of competition means that players more frequently go to great extents to gain an advantage, meaning the development of ever more complex systems to automate ‘play’ and generate assets while avoiding detection by the operator, and also attempts to purchase in-world currency for real-world money (which is permitted, nay, encouraged, in Second Life) in breach of the terms and conditions of many environments.

Regardless, an argument certainly could have been made for making Second Life the primary object of study in this research. However, a second and significant consideration was the extent to which these environments had been studied. At the time I finished the scoping of the research, in late 2010, Eve Online was an environment that had received remarkably little academic attention, considering that it had been in operation since 2003. As of this writing, in 2012, Eve has begun to receive more attention, with a number of forthcoming publications, however it is certainly still under-studied in comparison to environments such as Second Life. Bartle (2012) offers a graph used by Jessica Mulligan, conveying that while far more people play game worlds vs. social worlds, the inverse is true in academia. It is for these primary reasons that I opted to concentrate my research on Eve Online.

I will detail below the approach I took to studying Eve Online, however it is worth noting at this stage that as the project evolved and I began to consider the conclusions that could be drawn from my research – both in terms of the types of disputes which emerged and the potential solutions that could be proffered as worth of consideration – I began to place Eve Online in the context of the offshore gambling industry, another industry that has received little academic attention yet features a strong example of both participant-led regulation and online operations outside the guise of formal regulation.

In the final chapter of this thesis I again attempt to broaden the results, considering the application of my comparison between Eve Online and the gambling industry to the wider virtual world industry, and other forms of online environments such as social networks.

3.2 Case Study Methodology This thesis utilised case study methodology (Eisenhardt, 1989 & 1991, Eisenhardt & Graebner, 2007) in order to consider the examples of Eve Online and the Offshore Gambling Industry, both as independent case studies examining the regulatory questions and approaches each has adopted, as

54 well as in comparative terms, as a first stage towards building a theory of governance in contemporary online environments, in the way described by Ostrom (1990,2002,2008).

Eisenhardt (1989, 1991) discusses both single and multiple case study research as a methodology from which to form theory, arguing that the use of multiple cases is “powerful [...] because they permit replication and extension among individual cases”, meaning that those independent studies can be used for “corroboration of specific propositions”, while noting that “different cases often emphasize complementary aspects of a phenomenon. By piecing together the individual patterns, the researcher can draw a more complete theoretical picture” (1991, p. 620).

Eisenhardt & Graebner (2007, p. 25) expand on this, referencing Yin (1994) in identifying that “each case serves as distinct experiment that stands on its own as an analytic unit. Like a series of related laboratory experiments, multiple cases are discrete experiments that serve as replications, contrasts, and extensions to the emerging theory”, and that “the theory-building process occurs via recursive cycling among the case data, emerging theory, and later, extant literature. Although sometimes seen as ‘subjective,’ well done theory building from cases is surprisingly ‘objective’, because its close adherence to the data keeps researchers ‘honest’.” Such adherence to the data relies firstly on identifying the subset of data to be studied, for, as I will discuss subsequently, the sheer scope of contemporary online platforms makes starting with the entire data set impossible.

They also identifies the similarities and differences between “theory-building and theory-testing [...] in particular, the importance of creating precise and measurable constructs [...] because such constructs are the foundation of powerful theory”, and the importance of “methodologically rigorous research designs” (p. 620). While Eisenhardt’s work focused on “interview schedules and questionnaires”, a qualitative case study approach, such as I detail in this chapter also serves address the question of scope identified in the previous paragraph, and highlights the importance of theoretical sampling.

Theoretical sampling is the approach I have taken – well established in case study research – to identify the data from each of the platforms studied which is appropriate to consider the modes of regulation in these environments. Eisenhardt & Graebner (2007) hold the view that readers may “make the faulty assumption that the cases should be representative of some population, as are data in large-scale hypothesis testing research. In other words, they ask, “How can the theory generalize if the cases aren’t representative?” (p. 27, emphasis in original). They address this concern by noting the purpose of the research, that is, “to develop theory, not to test it, and so theoretical (not random or stratified) sampling is appropriate”, noting that just as scientific lab experiments are

55 not chosen and conducted at random, it is logical to select cases “for theoretical reasons, such as the revelation of an unusual phenomenon, replication of findings from other cases, contrary replication, elimination of alternative explanations and elaboration of emergent theory” (p. 27).

Significant in this discussion, for my work, is the distinction between single and multiple case studies, as Eisenhardt & Graebner note that within single studies such sampling is made because “they are unusually revelatory, extreme exemplars, or opportunities for unusual research access” (p. 27). Each of these factors apply to the case studies within this research as at the time of which both Eve and the offshore gambling industry were heavily under-researched (and while research on Eve is improving, there remains almost no research on the offshore industry). Both are atypical examples of regulation – Eve because of its laissez-faire approach to gameplay, with fraud and other activities encouraged, and the offshore industry because of its complete lack of applied formal legal oversight; and both are at the forefront of regulation in online spaces, highlighting approaches that may be taken in the future in other online industries, including social networking platforms.

By comparison, they argue, “multiple cases enable comparisons that clarify whether an emergent finding is simply idiosyncratic to a single case or consistently replicated by several cases (Eisenhardt, 1991) [and] create more robust theory because the propositions are more deeply grounded in varied empirical evidence” (p. 27), noting that theoretical sampling in such studies is more complex. Yin (1994) argues that the decision on sampling should not be reliant on the uniqueness of a given case, but rather support the overall theoretical development, being chosen for reasons such as replication, theory extension, and elimination. In many ways, the case studies in this research were able to both take advantage of the uniqueness of the cases, as stated above, but additionally complement each other, for reasons I shall discuss in detail in Chapter 7. Briefly, however, through their varied approaches to regulation, the cases enable a more generalised proposition to be established than either would have been able to explore without the comparative approach adopted in this study..

Returning to Eisenhardt (1991), she discusses the case study by Lipset, Trow and Coleman (1956) of democracy in the International Typographical Union (ITU), noting that the authors of that study were “concerned with illuminating ‘the processes that help maintain democracy in the great society by study in the processes of democracy in the small society of the ITU’ (1956: xi)” (p. 624). Here, they note that the choice was made “for the explicit reason of theoretical sampling. Most unions are oligarchies, but the ITU is unique in that it maintains a democratic form of governance” and that, as the ITU “apparently violates Michel’s Iron Law of Oligarchy, it is an extraordinarily appropriate setting to explore the limits of oligarchy” (p. 624). A similar approach underlies my decisions to

56 select Eve Online and the offshore gambling industry as my case studies. Both presented environments where traditional modes of regulation and dispute resolution were challenged, and they provide grounds from which to consider alternatives to top-down governance that is often proposed for such environments, but also to consider the limitations and past failures of self- regulatory approaches within online platforms.

Finally, Birks & Mills (2011), discussing grounded theory, offer a slightly different definition of theoretical sampling, which is particularly relevant to the selection of specific data within my case studies. In particular, they highlight that theoretical sampling is an “iterative process”, in which “it will become apparent that more information is needed to saturate categories under development.” (p. 10). Specifically, they note that in conducting theoretical sampling, “the researcher makes a strategic decision about what or who will provide the most information-rich source of data to meet their analytical needs” (p.11).

As I will detail subsequently in the discussion of Eve Online and the offshore gambling industry, I first conducted initial research in both online spaces to identify that the data that I needed to obtain involved methods of cheating, how different forms of such activity was viewed by participants to form community norms and the types of disputes that emerged among and between participants. Having done this, and realising that I needed to research the individual stakeholders further, it became clear that the best sources for such data – considering methodological and ethical challenges and restrictions – were the postings made by the various participants on public forums, blogs and similar spaces, which could be easily archived, sorted and manipulated using web archiving tools such as Evernote.

3.3 Case Study Selection My approach to selecting the environments to focus my research on, as well as the specific data within each environment to collect, was heavily influenced by readings in Grounded Theory (Charmaz et al., 2001) and theory building from case studies (Eisenhardt; 1991, Eisenhardt & Graebner, 2007; Dubois & Gadde, 2002). As discussed in the previous chapter, another significant influence was the work of Ostrom (1990,2002,2008), and while the governance material was inspiring as a starting point for significant factors and challenges to self-regulation, another key take away was the importance of multiple case studies, both for initially forming and subsequently testing approaches to self-regulation in particular spaces. The material below discusses case studies as a theoretical and practical approach, as well as the method I adopted to conduct and analyse the cases within this research.

57

Essentially, I sought to draw conclusions from gaming and gambling case studies, together and independently, to generate an understanding of how regulation, and particularly self-regulation, works in these environments. It is important to note, however, that the two case studies contained within were, and are, likely to be insufficient to create any new theory, or, as Eisenhardt & Graebner (2007) states, “to create theoretical constructs, propositions and/or midrange theory from case- based, empirical evidence” (p. 25). While, ultimately, I would like to generate these, this research stands as two case studies towards that goal, with each case study describing how topics such as cheating and dispute resolution are handled within those spaces. As with the work of Ostrom (1990), both the individual studies and the whole have merit.

3.4 Eve Online Eve Online is, as mentioned above, different from those virtual environments, which are so frequently the object of study. To that extent, when discussing the methodology adopted I believe it is important to both explain the unique issues that Eve presented, and the implications of that, vis-à- vis the alternative methodologies discussed in Chapter 2, before discussing how the blend of participant observation and textual analysis I adopted overcame some of these challenges, while also acknowledging the remaining limitations of the research.

Issues with Eve Online Research1 There are a number of methodological difficulties in conducting research in virtual environments that are not centred on the lived experience of an avatar. Some of these can be resolved through a consideration of the meta-game, which can enable conclusions to be drawn about the environment where other research may be inexact or inappropriate. Whilst traditional ethnographic approaches may focus overly on core elements of play and avatar representation while backgrounding many elements not represented through play, the meta-game enables these to be brought to the forefront. Non-avatar environments also present a very different aesthetic to the player, with both communication and the perception of the ‘self’ within the space – and in relation to other participants – feeling very different to online worlds such as World of Warcraft.

Eve Online is a science fiction massively multiplayer game with a hands-off governance structure, in which fraud and corruption is actively encouraged as an equally valid approach to concentrating on ship-to-ship combat or mining resources from planets. This is notable because it explains the pervasive undercurrent of mistrust that permeates the environment; a commonly espoused motto is

1 A version of this section has been published as “Hanging out is hard to do: Methodology in non-avatar environments” in Journal of Gaming & Virtual Worlds, 4:3.

58

“trust no one”. This extends into the corporation and alliance structure, with major corporations establishing an extensive recruitment process coupled with slow progression; new members are given very limited access to space, resources and, indeed, other members. Further, corporations are protective of information and assets, with tight controls in place on what information about corporation activities is publicly available, both in terms of in-game activities and potential grey/black-market real-money trading of currency and assets.

In Eve, until recently, only a ‘pod’ represented players. This pod, surrounded by life-supporting ‘pod goo’ is encapsulated in a ‘capsule’, described in the game literature as a “4m long egg shaped Starship with built in sub-light propulsion systems capable of performing warp”. This, essentially, is the basic representation, with the capsule capable of boarding other, more advanced, ships.

Social Interaction It is interesting to note the space given over in virtual ethnographies (see, for example, Taylor (2006) and Drennan (2007)) to the description of the avatar, and the importance of the personal and research considerations that go into establishing your representation. Taylor (2002) notes “Avatars […] provide a means to live digitally – to fully inhabit the world” and that users “construct their identities through avatars’. (p. 40), and notes that they are “used in a variety of ways – to greet, to play, to signal group affiliation, to convey opinions or feelings, and to create closeness.” (p. 41). Further, she contends that “[People] don’t simply chat in disembodied spaces, but use their avatars to gather for social events like weddings, community meetings, games, and simply hanging out” (p.47), while Bartle (1999) notes that “socializing seems to relate inversely to teleportation - it's hard to meet people on the street if everyone is teleporting.” This succinctly summarises one of the issues with Eve: the lack of an avatar and the speed of spaceships means everybody is ultimately teleporting and have minimal need to interact.

Issues of games and gaming environments that lack sufficient in-game social interaction (to satisfy players) are not new. Manninen (2003) commented that “[e]ven multiplayer games have fundamental problems in supporting rich social activity, and, thus, players constantly seek work- arounds and external support in order to fulfill their need to socialize”. This is what is referred to as the meta-game; those community sites which support the gaming environment giving players the possibility to interact, discuss in-game issues and communicate with, perhaps, a freedom that is not available in-game or through the official website. Manninen (2003) does not detail these, instead discussing means of establishing interaction within the games, but in the case of Eve Online they consist of the official forums, corporation forums, blogs, community news sites such as EveNews24.com and unofficial forums such as kugutsumen.com.

59

Humphreys (2005) discussed the use of forums of Everquest and Star Wars Galaxies for both player/developer communications during testing, and for commentary on other, in world, events, and Taylor (2006) discusses the use of message boards for interactions between designers and players. However, with environments such as Eve Online the prominence of these meta-game considerations needs to shift, from being a supplement to experiences observed within the environment, to being a core part of the study, with weightings depending on such environmental aspects as the presence of avatars, social design, etc. In environments where sub-cultures are hard to infiltrate, through design or culture, we must consider other means of getting at their experiences, and the meta-game is one approach for doing so.

In Eve, the lack of conversations that take place within the game client, and the fact that the majority of small-group conversations relate to the current objective rather than general discussion about the gaming environment, leads to these locales better representing the range of communication observed by authors such as Drennan (2007) and Duchenaut & Moore (2005) in the social hubs of the environments they study than would a sampling of the chat from Jita, or any corporation.

Through my participant observation within Eve Online, which contrasted to my earlier experiences in environments such as World of Warcraft and A Tale in the Desert, I observed that the lack of an embodied avatar significantly affects communications in Eve Online. Interactions in the environment feel more distant and there is little or no emotion expressed; chat conversations are purely business. Respect is earned, not assumed, and is directly linked to the ‘birth’ date of your character.

Mittani, head of the CSM, commented in an interview with the gaming RockPaperShotgun (2011) that “One of the reasons we make jokes about Eve being a bad game, or a spreadsheet or what have you, is that it lacks immersion. It’s just talking space ships. And most of the time you’re so zoomed out because of the lag that you don’t even see your space ship […] I almost never log on to Eve Online itself because I run a spy network. For me, Eve Online is talking to people in a Jabber client.” For many, Eve is a game about politics, about subterfuge and about controlling territory, very little of which involves communicating with other humans through the game client – the core mechanic of environments such as World of Warcraft.

The traditional avatar, as discussed previously, is significant because it not only provides the means of interaction with other players, but also because the design decisions that accompany it tend towards the formation of social spaces. The mere act of walking from location to location versus near-instantaneous travel forms choke points where players meet. Similarly, the design norm in

60 many MMOs of central locations where players’ trade with other players also provides a location for chat. The fact that in Eve you are represented by a capsule capable of travelling at supreme speed around a vast universe eliminates these choke points, and while there are trade hubs, they are vastly underpopulated compared to other virtual environments. I will discuss the reasons for this below

As Williams et al (2006) argue, World of Warcraft itself only becomes a social game as players reach the end-game content – with grouping together in earlier stages of the game having a negative impact on a character’s progression. This, in some ways, is similar to Eve Online, with the exception that the end-game content in Eve is effectively gated, only accessible to those with the relevant allies, dictated by the behaviour of participants as opposed to being made available once the player reaches pre-defined game goals. This, combined with the lack of grouping functionality often found in other MMOs, by which players are encouraged to form ad-hoc groups at an early stage, means that players have little in the way of forced or voluntary co-operative play until such time as they become involved in a corporation.

In other studies (Duchenaut et al, 2004; Ducheneaut & Moore, 2005 & Ducheneaut et al, 2007) consideration has been given to the establishment of social spaces; for example, through cantinas in Star Wars Galaxies (which were found to be largely unsuccessful – most participants visiting simply to complete a task for a short period, though a few took the opportunity to create a social environment). Duchenaut & Moore (2004, p. 1) note that:

[M]ost MMORPGs are structured so that players are forced to interact. EverQuest is a good example of a successful attempt at encouraging player-to-player interactions: the “quests” players have to accomplish are purposefully too difficult for a single character, and require the help of a group of other players. In more recent games like Star Wars Galaxies (SWG), the interdependencies between players are even deeper and broader: a complex ecology of professions forms the basis of an economic system where players have to cooperate and exchange goods and services, as they would not be able to progress otherwise.

This again highlights areas where communication, and thus observation, in Eve suffers in comparison to other environments. Eve’s Player vs. Environment (PvE) content, or ‘missions’ are designed to be performed by a single character at varying levels of difficulty; while receiving assistance is possible, and can be beneficial at higher levels, it is in no way forced or encouraged through the mechanics of the environment. Similarly, Eve’s trading system is designed to be largely independent of player communication, with items sold through stations in a market that accepts orders of

61 days/weeks/months duration, resulting in players not having to be in the same space, or even online, to trade items.

Similarly to Duchenaut & Moore (2005), Kolo & Baur (2004) note “The evolution of social formations among the game characters is stimulated by the design of the game environment and, indeed, most game characters do not remain loners for long in the world of ” and Drennan (2007) comments “Guild Wars contains a series of relatively small social hubs. Players are able to use the social hubs as a forum for advertising the quests that they wish to carry out, looking for like minded people to accompany them”, also noting that for her research “social hubs provide the opportunity to observe players in a complex social setting in a relatively small space, with a number of concurrent conversations” (p. 44).

By virtue of this either not happening or being obscured in the design of Eve Online, the research experience in Eve differs from that in the worlds studied by these authors.

Chat and Social Spaces Even in games with avatar representation, chat is largely text based. While operations within guilds, and possibly even ad-hoc groups, use internal or external voice-chat mechanisms such as TeamSpeak or Ventrilo to co-ordinate and chat, interaction within the social spaces of the environment, a players local area or with specific players takes place in text form, use emotes and conversational norms that have changed little since the time of MUDs and (see Bartle, 1990 & Cherney, 1999 for a detailed description of these, and Williams et. al, 2006 for a contemporary observation). While these generally take place using the in-game client, it is not uncommon to substitute platforms such as Jabber (as referred to in the prior quote by Mittani), especially in an environment such as Eve Online, where paranoia is rife.

These same chat mechanisms largely exist in Eve Online. There is local chat – a channel where anybody in the same solar system as you is able to see your messages, corporation chat – where a corporation is akin to a guild in a traditional MMORPG, private chat with individuals or groups, and there is the ability to create other, custom, channels. Why, then, is the level of socialisation different? The answer lies in the design – central hubs are designed for utility rather than socialisation, for trade rather than chat.

Duchenaut & Moore (2005) refer to the design of space as a “central aspect of the game […] Indeed if players are to interact, they have to meet in the first place. In S[tar] W[ars] G[alaxies] space has been organized so that players have to congregate in certain locations.” (p. 2) and offer the following account (p. 3):

62

For instance, many large cities have a cantina. This is the place where entertainers gather, and for good reasons: indeed, cantinas are the only places where entertainers can heal battle fatigue […] This system has been put in place by the developers specifically to encourage player-to-player interaction. The rationale is that these periods of “downtime” can be used by players to chat with each other.

Another important interaction spot is the starport. Players often need to travel from one planet to another, either to accomplish a mission or to find a vendor for a specific, rare item they need. Travel, however, is not instantaneous; shuttles fly every 9 minutes and, unless you happen to be lucky and catch one just in time, you will usually have to wait for a while. Again, this was designed so that players would have opportunities to ‘bump into each other’, have serendipitous interactions, and eventually form relationships.

These mechanisms are clearly designed to force players to communicate (see, for example, Bartle (2004, p. 232-234) and to be co-located for substantial periods, and again provide an interesting contrast with Eve Online. In Eve, at least outside of ‘’ areas or secure space, players ‘heal’, or repair, their ships in small corporation-owned home systems or in remote space in order to not provide an easy target for roaming players. Similarly, the healing mechanism itself is time or cost based and does not require the participation of another player (although, within battles, there are ‘logistic’ ships that serve the repair functionality – in the heat of battle, however, this provokes little communication.

Spatial Design Jita, the solar system widely recognised as the centre of the Eve economy is a trade hub – the location where players most frequently choose to purchase and sell items in order to receive guaranteed supply and demand. In comparison to games such as World of Warcraft, where trade hubs have popular routes leading to where players congregate, there are four gates which allow entry to Jita (the only chokepoints, at which players normally spend no more than a few seconds), and vast swathes of space through which players travel, meaning the visuals of these hubs is very different to those in World of Warcraft or similar games, contributing to the feel of Eve as a barren environment in contrast to the crowded/populous feel of, for example, a World of Warcraft auction house.

The vastness of space, combined with the temporality of visits resulting from the fact that almost all visitors are heading to or from the market (where they will spend less than a minute collecting items, having often placed orders from some distance away), means that Jita is by no means a social hub. The solar systems that act as agents’ (equivalent to givers in traditional role playing

63 games) hubs suffer from this same problem; visits are temporal – players return to collect rewards and a new mission, and others are looking to sell items needed for missions, meaning the type of communication seen at the hubs in, for example, Star Wars Galaxies, is not seen in Eve.

Players in Eve are spread across multiple regions, with high-security space focussed on the new player experience, and players tend towards lower-security space as they gain more experience in the environment. While this is not a universal rule (some experienced players ply their trade in high security space to arbitrage markets, supply new players and so forth) it does mean that different communities and spaces need to be considered when conducting research within Eve.

Eve itself is divided into regions of space with differing security levels. As a new player, your first experience is with high-security space, with systems ranging from 0.5 to 1.0 (decreasing levels indicate a slower security response from the in-game police (CONCORD)), but they also have a higher level of missions and resources to exploit. Below 0.5, security space is labelled ‘low-security’, and in these systems there is no security response from CONCORD. These areas are generally seen as ‘public’ space, and tend to fall under the control of one of the in-game races – Amarr, Caldari, Gallente and Minmatar – races that have varying access to ships and in-game rivalries through faction warfare (the final race, Jove, is essentially CCP staff), and even here, unless you are in a corporation friendly to the race owning the space, you are likely to be attacked and killed promptly if you are anything resembling a ‘newbie’ ship.

The other two areas of space are zero security space – a range of systems under the control of player corporations and alliances with varying resources determining their popularity (and thus the frequency with which they are battled over) – and wormholes – essentially, hidden pockets of space from which there are only a few entrances and exits and which can only be found by utilising scanning skills, modules and a not insignificant investment of time. In the case of 0.0 space, the owner corporation or alliance tightly controls access, and in the vast majority of cases a ‘shoot on sight’ policy is enforced, whereupon anybody who is not marked as friendly to the host corporation is immediately killed.

Wormhole systems do not generally have formal ownership; however, a similar policy is enforced by small groups of players who control the wormholes, often anchoring a control tower structure to guard and dock their ships, and other groups of players live a nomadic life. All, however, operate a shoot-on-sight policy because of the general mistrust experienced in the environment, meaning access is only possible on a referral /word-of-mouth basis.

64

Player representation across space Non-player corporations (NPCs), the home for players new to the game, have the same chat functionality as regular corporations, and this provides limited social functionality – however, this is essentially limited to new players (a high tax rate and the ease of setting up corporations mean players leave within a short period of time to a tax haven, if not a corporation) and has a high turnover (Eve suffers from a low retention rate of trial accounts). This means that from social, learning and research perspectives such channels do not provide anything near a useful cross- section with which to observe or form relationships.

As Bartle (1999) comments, “MUD social activity often centres on the entry, where users begin their sessions. It often appears as a lobby, town square or visitor centre. The area immediately around the entry is also populated but occupancy drops off sharply thereafter”. Eve mirrors this in some ways, with new players congregating around the systems in which they start their careers. More experienced players, by contrast, will start each play session at their last known location (usually a home starbase/structure), and are unlikely to return to tutorial systems, contrasting to the centralised population Bartle describes.

Drennan (2007), writing about Guild Wars, notes “the mix of player experiences allows for a greater range of social interactions, which is why [in her research] observations were carried out in a number of different areas throughout the game. Hypothesising about the interactions that take place in different locations leads to the question of whether the style and topics of interactions change as the mix of players tends towards more experience as opposed to less experience” (p. 53). This mix is simply not possible to observe in Eve, and the challenges associated with accessing the low security areas that prove host to highly experienced players largely prevent the question of contrast in interactions being satisfactorily answered through participant observation.

These design decisions, combined with the lack of grouping functionality, mean that there is little to no room for small group conversations, or to meet other players, outside of the formal corporation structures in low security space, which are, as I explained previously, heavily gated communities. Eve developers are attempting to resolve this situation, and have also done so in the past – previous attempts include the failed social network ‘COSMOS’ (parts of which eventually became Eve Gate, a relatively unused social network currently undergoing renovations), while the most recent (July 2011) expansion saw the creation of full-body avatars and a 3D space to use them; however, as of this writing one is still limited to one avatar in a restrictive location (designed to represent your captain’s quarters).

65

Researcher Roles & Access Drennan (2007), writing about her methodology, noted that “typically […] an ethnographer would begin to categorise or label the roles and activities that people have given themselves or that they are given by other members of the community” (p. 46). In Guild Wars, and the other virtual environments studied by Humphreys (2005a, 2005b), Taylor (2006), Steinkuehler (2005), etc., the role is assigned as part of the character creation process; that is to say, the tasks you will perform as a solo player, and particularly within larger groups, are assigned on joining the game. In Eve Online, by contrast, the role you play is directly linked to your service time – skills are acquired purely on the basis of the amount of time played.

In some ways, this is more akin to anthropology traditions, where a new community member is given only the most basic and least sensitive tasks to complete (McNeill & Chapman, 2005). Drennan (2007) notes that she “was able to chose multiple roles with which to interact with players [so she] could play as many ways as the game would allow, and all of these would be accepted by players within the game” (p. 54).

The difference in Eve Online, however, is that while in Guild Wars or World of Warcraft skilling up is simply a matter of time investment, it is impossible to ‘skill up’ or acquire the skills needed to perform at the same level as the advanced players in Eve, especially during the timeframe of a PhD research period, as the higher members of corporations and alliances having approximately 5-7 years worth of skill points (and are still acquiring them at the same rate as a new character). This inevitably limits the reliability of participant observation, though some information can still be gathered – by flying a cloaked ship into a battle or viewing forum posts leaked online by opposing corporations it is possible to gather a detailed understanding of tactics, of corporation roles and structures, espionage attempts and the interactions between high-level alliances.

In terms of access to end game spaces and the corporations that inhabit them, there are perhaps four possibilities to consider. The first, and most obvious, is to limit one’s study, and thus conclusions, to the public areas of the environment. While it is certainly possible to conduct detailed research of these public spaces, I would question the ultimate worth of such an analysis. One would ultimately be over-representing new players and ignoring significant areas of the environment and the sub-cultures which inhabit them. Such a study would gather some useful information, but would be like claiming to conduct a thorough study of New York without leaving Manhattan, thus ignoring the sub-cultures of areas such as Westchester or the Bronx.

The second possibility is to gain access to the late-stages through a pre-existing character or account. This causes a number of ethical and methodological concerns. Firstly, if the character is one

66 of your own creations then the relationships formed between your character and others within the environment will be very different to the relationships between a new character with declared research interests.

The alternative, if a researcher has no pre-existing relationship with the environment, is even more ethically challenging. In most environments, there is a market for existing characters, and so it is in Eve Online. It is possible to buy a character with the skill points, resources and relationships to gain access to the late-game or low security areas, but here the character’s previous relationships are not even with you, let alone a research-declared character.

Thirdly, there is the option to observe low security behaviour through public accounts. These come in a number of forms, including forums, community sites, word of mouth and leaked information (In Eve Online there is a history, with the most recent example in April 2011, of low-security corporations being infiltrated and their forums copied and made available for viewing online). These accounts are never going to be entirely accurate as when players are immersed in a gaming environment, they struggle to later recall the details of their play session (see Drennan (2007)). However, with battle accounts being recorded and made available through the Eve Online API, piecing together the information available online can often provide a reasonable facsimile of the play experience.

Finally, I would contend that we are now reaching a position in the study of gaming environments where there is significant merit in combining and contrasting the results of multiple studies. In oft- studied environments such as World of Warcraft or Everquest, there is no reason not to conduct a thorough study of the new player experience, and then compare and contrast your observations with those of Taylor (2006) or Humphreys (2005), who have studied the end game in more depth. Similarly, the observations of an author such as Chen (2011) might be an invaluable addition to public accounts of the behaviour of low-security Eve alliances, and contrasting the ethnographies of Taylor (2006) and Drennan (2007) to my Eve Online experiences may provide critical information on how identity differs between avatar and non-avatar environments.

Given my focus on Eve Online, and the lack of current academic accounts, I chose to blend participant observation with textual analysis of the meta-game. In doing so, I utilised my participant observation experiences to provide the key context demanded by authors such as Charmaz (2006) and McKee (2003).

Through my research, it readily became apparent that there is significant merit in comparing and contrasting research studies, personal observations and public accounts and data in order to

67 construct a thorough understanding of a particular environment. Similarly, it is worthwhile contrasting studies of similar, and of different, environments in order to better understand how a specific type of player or grouping of players behaves, how identity is constructed, the implications of designing a specific style of environment, and so forth. What remains key is that restricting such analysis to the game, as an object, is insufficient if we are really interested in the lived experience of players. What happens outside of the game is often just as important.

Multi-Method Research My research into Eve Online began with a period of observation that I continued until June 2011. During that time, I participated in the environment as a player, exploring the ludic structures, the relationships that exist within corporations as well as independently, the community surrounding the environment (forums, internet relay chat, Eve Radio and alliance tournaments) and the various ways that players interacted with the environment. During this stage, data was recorded in a number of ways – through notes of my interactions with the environment; logs saved by the game client and manually saved from out of game chat channels; online forums – both official and unofficial; privately recorded and publically available economic data; provider, player and media provided news articles; and in and out-of-game conversations with other participants.

The objective of this observation period was twofold. The first objective was to develop an understanding of the consensual norms, i.e. what the participants can be said to have agreed to by participating within the environment (including the degree to which they are influenced by the design decisions made by the developer), the norms established by the players within the environment as a whole, and within specific corporations and alliances. The second objective was to identify the governance norms negotiated between participant and provider for behaviour within the environment, and the enforcement of those norms.

This combination of participant observation and textual analysis has much in common with the approach adopted by Ostrom in her study of communities, discussed in detail in the previous chapter. As Poteete, Janssen & Ostrom (2010) argue, “to overcome the limits of any one method, one needs to draw on multiple methods […] if social scientists have shared standards, no single method fully addresses all standards. Methods offer different strengths and weaknesses. Rigorous research that combines complementary methods will be superior to research that relies on any single method” (p.5). Given that my work loosely tests many of the assertions made by Ostrom – that collective action provides a solution to issues raised in communities where their successful operation and continuance is beneficial to all participants (despite these communities being

68 commercial in nature rather than the commons-type communities Ostrom researched – outlined in greater detail in Chapter 2) – it seems particularly fitting to adopt her methodological framework.

The culture and design of Eve, discussed in greater detail below, means that it is not possible to gather all of the information through traditional participant observation. Similarly, outside of a few public participants, the core structure of the environment makes it difficult to gain access to interviews with those participants that are outside of your direct circle – and thus to be representative of the overall environment, especially when you are known to be active within the environment.

For my research, however, this did not prove overly problematic, and indeed I feel that better results were obtained by considering the public and private discourse around rules, player conventions and disputes. While interviews are a great technique for understanding the depth of a participant’s engagement and opinion, what is more important in this research is the breadth of opinions, and the combination of participant observation and textual analysis conducted here allowed me to understand the broad positions that are in opposition when rules in Eve are negotiated. Public discourse on the forums and other community sites surrounding Eve Online highlighted the key viewpoints, and often provided the key follow-ups on why such a position existed (for example, a significant number of players are pro-botting because it results in lower resource costs for their player vs. player combat operations). Similarly, the transcripts of the private discourse between the CSM (Council of Stellar Management) and CCP, developers of Eve Online, provides solid, referential, evidence of how these player positions are represented in decision making meetings.

Whilst the perspective of an individual bot user, and an individual ‘newbie’ is interesting – and some are included in Chapter 7 – what is more significant is the broad positions that are adopted and the reasons for them. It is more useful to understand why there is a block of players who are pro real money trading than to be able to say that Player Z is in favour of real money trading because they work 16 hours a day. That is not to say that the individual discussions and participant observation more generally was not worthwhile. It was fundamental to my understanding of the discourse to be familiar with the language, mechanics and play styles to which they refer; it is difficult to understand the reasons for botting unless you are intractably familiar with the (acknowledged) failure and tedium of the game mechanics for mining, for example.

Standard instruments were used for the collection of data during the observation process. I utilised a local and online file store to keep snapshots of community discussions on both official and unofficial forums, blogs and other platforms, such as Twitter. This allowed me to both annotate the

69 discussions with key research themes, and reminders to follow up on a specific topic, but equally importantly it meant that I held a permanent record of the discussion should the thread later be deleted, which is a semi-frequent occurrence on the official forums when a contentious topic is raised, and particularly where a thread denigrates into attacks on CCP staff.

Participant Observation Participant observation has its roots in anthropology, in which researchers spend long periods as participant observers within the cultures and society that they are studying (Bryman, 2004). It is a technique aimed at providing “an authentic account of a segment of social life in terms that disclose its meaning for the people who live it” (Kirkpatrick, 2009, p. 21), taking place within “a setting that is relevant to the research problem in which … [we] are interested” (Bryman, 2004, p. 294). That is to say, it is about immersing oneself in the community being studied, be that real or virtual, with the intention of understanding the participants, the way they act, and the reasons that they act that way. As Hine (2000) puts it, “the ethnographer inhabits a kind of in-between world, simultaneously native and stranger” (p. 5).

More recently, Taylor (2006) has made the argument for studying virtual environments using this methodology, asserting the benefits of “a qualitative approach in which the researcher immerses herself in a culture and lives, talks, and works with and among the community members for a stretch of time […] in understanding the richness of spaces like Everquest “(p. 16).

Participant Observation is a proven and valuable research tradition within the field of game studies, with notable examples including work by Cherney (1994), Dibbell (2006), Kendall (2002) and Taylor (2006). The approach I followed was essentially a combination of that described by Taylor (2006) and Cherney (1999) whereby I conducted a pre-research period to both establish presence in the environment and, in my case, to decide which environments I wished to pursue further. I then collected data from a number of sources, including personal records of my play sessions, as well as documenting public domain forum posts, mailing lists and blogs where regulatory issues were being discussed within communities.

The inter-relation between the actors carries great significance, and my understanding of those relations was informed by Taylor’s (2009) assemblage, which argues for the interrelation of the various actors in creating the game experience. As a methodology, assemblage seeks to evaluate and consider the impact of two or more factors on a subject; for example, online and offline lives in Barnett (2009) and technology, game experience and sociality in Taylor.

70

Taylor’s approach is based on that proposed by Giddings (2006), and suggests that games, and the play that takes place within them, are “constituted by the interrelations between (to name just a few) technological systems and software, the material world, the online space of the game, […] social worlds that infuse the game and situate us outside of it, the emergent practices of communities, […] institutional structures that shape the game and our activity as players, legal structures, and indeed the broader culture around us with its conceptual frames and tropes” (p. 332).

While it is certainly the case that the affordances offered by the technology shape the relationship between the actors, including placing limitations on what can be implemented and the enforcement strategies that can be adopted, a thorough treatment of such is beyond the scope of this research project. What I am examining here is more the interaction between the actors and the motivations, causes and externalities that impact on the norms that the actors develop in these environments.

During my play experiences, I paid particular attention to patterns of play, conversation and interaction that suggested the presence of a norm – and the way that things were shaped by the design and governance structures put in place by the professional designers and corporations. Then, drawing on recent norms theory, notably work by McAdams (1997) and Strandburg (2004), I examined the norms observed in these environments, enabling me to give precision to, and to develop possible mechanisms to overcome, the problems highlighted by Humphreys (2005) and Taylor (2006).

In some areas this may well have produced competing norms, as highlighted by Banks & Potts (2010) in regard to the social and economic norms at play in consideration of user-generated content. Where this is the case I intended to identify the norms in-play, and to give consideration to the interaction and tensions between them.

My participation in these environments attempted, as far as is possible, to replicate the experience of the community, and sought to illuminate and describe their understandings and perspectives by analysing them as norms.

Textual Analysis My textual data was obtained in a number of ways, and was analysed once I felt a conversation had reached its natural conclusion. As discussed above, I collected data from a number of sources, which included Twitter, blogs and community forums. The Twitter data was collected using an application called YourTwapperKeeper, and consists (as of June 2012) of approximately 6-18 months of data, depending on the keyword. This was collected and analysed using techniques discussed by Bruns

71

(2011) and Bruns & Burgess (2012), but essentially stored all tweets available, given Twitter API restrictions, using certain keywords (such as eveonline, #tweetfleet, CCP) or from certain accounts (such as @CCP_Manifest – a community manager), and were stored in a MySQL database, which could export the data into comma-separated or tab-separated formats for further analysis. A number of Gawk scripts (Bruns & Burgess, 2011) then allowed data to be collected, as simply as investigating the volume of tweets from CCP after their 2011 layoffs, or as complex as mapping the conversation themes over a period of months. Importantly, the original data was also retained, so it is possible to investigate the data set should there be a notable conversation or trend, such as the debate over removing The Mittani from the Council of Stellar Management following allegedly inappropriate comments at the FanFest event.

I highlight this availability, as it was a key element of my research methodology. While I did not ultimately follow a Grounded Theory methodology, it was one of my prior methodological considerations, and elements of the approach detailed by Charmaz (2006) underlay aspects of my textual analysis, as well as methods detailed by McKee (2003). Charmaz, however, highlights the importance of context in textual analysis, that “[t]exts do not stand as objective facts although they often represent what their authors assumed were objective facts (Prior, 2003). People construct texts for specific purposes and they do so within social, economic, historical and situational contexts” (p.35). This is particularly true of gaming environments, where you also have to give consideration to aspects such as a player’s alliance and be wary that sometimes community posts may represent an attempt at role-playing rather than the true opinion of the author.

Charmaz (2006) highlights a number of questions that rise when analysing a text, including “how was the text produced? By whom? What is the ostensible purpose of the text? Might the text serve other unstated or assumed purposes? Which ones?” and “Who benefits from the text? Why?” (p. 39-40). These formed a significant part of my analysis of these conversations, regardless of platform, and were why I felt it important to keep complete snapshots of the pages at the time I analysed them (and, in the case of blogs, I frequently returned a week later to take a final snapshot of any contemporary comments). In the case of forums and blogs, I achieved this by utilising the software package Evernote, which enabled me to take a complete snapshot of a web page, and then I stored it in searchable form.

Having stored the content in Evernote, I then coded the data according to the theme of the conversation. This meant that as well as the posts being searchable for keywords, I could easily access the posts around a particular theme when I needed to further research or write about a particular issue. This content was normally stored with brief notes that identified the context of the

72 content, for example one series of CCP forum posts regarding the Mittani incident at Fanfest carries the note: “After Twitter outrage, no comment from CCP”, providing me with the context to discuss how the issue evolved over time.

The final methodological comment I feel needs to be made with regards to this textual content is the motivation for collecting it. There were three triggers that led to my searching for content on a particular theme. The first was a direct result of my participant observation; for example, if logging into the game I was presented with a splash screen stating “Jita under attack. Avoid if possible” that would indicate to me that a significant event was in progress and that I needed to start data collection (by checking the forum for the key threads relating to it, any blog discussion and checking for the twitter keyword being used, i.e. #burnjita). Secondly, I would notice an uptick in the Eve related content in my Twitter stream and similarly start monitoring, and, thirdly, I subscribed to a large number of prominent Eve Online related blogs through Google Reader, and I would archive important posts and pursue data collection on the other platforms.

The most prevalent themes I monitored over the approximately 15 months of intensive data collection were botting, controversies (broadly designed to incorporate events such as Burn Jita, but also player-led events such as the Ice Mining interdiction), the CSM election cycle, Hulkageddon – a player led event targeting miners – and real money trading. It is no surprise that they are the examples discussed in most detail in Chapter 7.

3.5 Offshore Gambling The second facet of my research was added during the second year of this project. While I had always intended to consider the gambling industry as a real-world example of the types of regulation that could be deployed into online environments, as both my participant observation and textual analysis of Eve Online continued, it became readily apparent that a large number of the issues I was observing – automation, players circumventing terms of service; the debate between what was legitimate, but optimised, play styles and cheating; and, more broadly, the categorisation of industry wide disputes between player and participant and between participant and participant – had much in common with what I had experienced previously as a participant in the offshore gambling industry.

As I continued to compare the two, it became clear that there was good reason for this similarity; the two environments actually have a great deal in common. These will be discussed in detail in Chapter 4. It is worth nothing that they are both online environments where the participant base is potentially located far from the provider, and the player base is geographically diverse. Both feature

73

Terms of Service agreements where the enforceability has been drawn into question and the practical enforcement has proven challenging, they have a strong potential for both types of disputes and they have a strong community that is able to spread news about the platform to other participants with relative ease.

The material on online gambling is drawn from three sources. The first of these are my personal experiences between 2000 and 2009. During this time, I maintained active participation with the industry and was active across several discussion forums. During 2003 I met a number of the industry participants at a Las Vegas convention, and remain in contact with some of them to this day. In the following section on Ethics I discuss some of the specific challenges of conducting research in the offshore gambling industry, and why – for ethical reasons - I do not detail my experiences in the industry nor those I have spoken with, but it is worth noting at this stage while my personal experiences influenced the way in which I have drawn on case study material, and meant I was aware of specific exemplars, this is by no means an (auto)-ethnographic study of my participation in the industry. I was particularly aware of, and cautious about, partiality (see, for example, Cottingham (1986)) towards those I had experiences with, and this thesis does not discuss any cases in which I, nor my immediate contacts, were involved.

Secondly, where I refer to past events, I have supported my memories of them with contemporary accounts from the community discussions, which are still archived on those community sites still operating, or are, in a couple of cases, available from The Internet Archive (Archive.org). This data was collected in much the same way as was discussed with the Eve Online textual analysis material; that is to say, it was captured in its original form and my prior knowledge of the industry was used to supplement the context. Through services like Sportsbook Review, a dated history of many of these events is also available, which allowed me to place a number of the public discussions I cite into the specific time context with regard to the status of the disputes being discussed.

It is important to note that, as previously mentioned in the discussion of public accounts of Eve Online play sessions, community accounts – such as those found on online forums, blogs and news services such as Sportsbook Review - can not be taken as completely authentic accounts of historic or contemporary events. Such accounts provide important evidence of contemporary discourse surrounding the events in both Eve Online and the gambling industry, and as such provide important context for the analysis conduced in this thesis. However, where I use this material, it contributes to the case study analysis, and often placed in comparison to other sources of information.

74

Finally, during 2011 I was able to discuss a number of these cases personally with industry participants who were directly or indirectly involved in the disputes. These discussions are used with my personal experiences to provide background context, however they are not quoted or specifically attributed for reasons I shall discuss in the ethics section of this methodology.

Through this material, I have reconstructed a number of the pivotal and precedent-setting disputes within the offshore gambling industry with the intention of both describing how they contributed to the evolution of dispute resolution within that industry and the parallels that can be drawn between those disputes and the types seen in contemporary online environments, of which Eve Online is an exemplar.

3.6 Ethics For the Eve Online portion of the research, ethical clearance was received for the participant observation. The textual analysis was conducted on publicly available material. One proviso of the ethical clearance for the participant observation was that my online representation in each of the virtual environments was to contain a notice that the character was being used to conduct research, and a link to the applicable documentation was hosted on my personal website. I did this on the research character in each environment I studied. However, I know of at least two cases where this hindered the research. My first attempt to join an Eve corporation, Eve University, was hindered by this disclaimer. My application was continually passed up the chain of command by the alliance recruiters, which both meant that my attempt to join the corporation did not mirror the experience of other players and ultimately meant that I was denied access to areas of the environment that I had hoped to experience.

As discussed previously, this added to the existing challenges of conducting research within Eve Online, and artificially limited the scope of my research beyond those restrictions that already existed through the nature of the platform. While this is not the appropriate place for an extensive discussion on the virtues of ethics policy, I feel that continuing efforts among the Internet Research and Game Studies communities to define and publicise ethical standards are warranted, to allow research to gain better understandings of these spaces.

More challenging ethically was the material regarding offshore gambling – both with respect to my personal involvement but also to others that I had interacted with in the past, and those I spoke with during 2011, during ethically cleared background conversations in Las Vegas. As mentioned previously, I was an active participant on the community forums for many years, and thus I inevitably draw on prior and personal experiences that were, and are, not able to be ethically

75 cleared. However, as I detail below, I have taken measures to ensure specific information, where it is not in the public domain, is not revealed through this research.

Specifically, I do not attribute specific quotes to those I spoke with in 2011, nor do I name participants I have spoken with in the past. In the latter case, research ethics would not permit this. However, even in the contemporary cases I did not seek clearance to name specific individuals, because of the knowledge that to do so would compromise their position both within the industry and with regard to US law on online gambling (discussed in more detail – with exemplars – in Chapter 6).

If, in a purely hypothetical case, I discussed the case of a participant who attempted to steal money from the operators through depositing, losing his funds (either as part of an arbitrage with another Sportsbook, or with another player through playing poker), and then charging back his deposit with the operator, to name any of the principals involved would allow those in receipt of the processor records (and US authorities frequently seize payment processors used in offshore gambling) to reconstruct the transaction, which under the precedent of cases involving the domains of sites such as Bodog and BetCRIS, and the prosecution of Jay Cohen of WSEX, would be enough proof for a criminal case to be issued. It is not my purpose here to document such action, and thus those participants who informed my discussion are not identified (at least, beyond the pseudonyms they have placed in the public domain through their forum posts).

Instead, both my personal experiences and these past and contemporary discussions merely act as background material from which I have shaped the discussion surrounding these issues. Many of them are worthy of more detailed analysis, and should the legal position change there are many more accounts that could be brought to the forefront. For now, however, it must suffice to inform the reader that these are informed accounts.

Significantly, however, all of the accounts I refer to in this thesis are based on, and are evidenced by, discussions on community forums that remain as online artefacts to this day. To that end, privileged information was not required, and was not used, to draw the conclusions that I do in this thesis, nor to evidence the significance of the regulatory approach adopted in the industry. The vast majority of forum discussions included in this thesis are attributed to the pseudonym under which they were posted, as a simple Google search would easily trace the content back to the username were they to be further de-identified.

In summary, material for both my work on Eve Online and the offshore gambling industry is drawn primarily from public domain materials, and is backgrounded by personal experiences. The personal

76 observations were constrained in a number of ways, through the boundaries of research ethics, public disclosure and game mechanics in the case of Eve Online, and through ethical concerns relating to privacy, security and protection of confidential information in the case of the offshore gambling industry. Accordingly, what I present in this research are limited accounts, but accounts sufficient to establish the principles of self-governance and dispute resolution that I intend to discuss.

In the next chapters, I will return to a number of the theoretical issues discussed in Chapter 2, as well as the methodological challenges discussed here, to consider a number of topical issues with contemporary online environments. Chapter 4 contains the detailed research into Eve Online, while Chapter 5 contains the material on the offshore gambling industry referred to herein.

77

4. Issues in Contemporary Online Environments

As was briefly outlined in the literature review, there are significant issues facing contemporary online environments outlined by prior authors; largely derived from studies of environments such as Everquest and World of Warcraft. Taylor (2006, p. 125-162) outlines the vast majority of the tensions between industry participants, which remain major challenges in the field.

These include disputes between participants, between participants and operating companies, and those involving outside legal principles such as intellectual property rights, and it is those between industry participants on which I will focus. Challenges concerning the design of these environments, and those debating the role of the player in the formal design process, are largely beyond the scope of this project. There are also a number of new challenges that have arisen since 2006, largely focused on contemporary mechanics in social environments, and in this chapter I will outline them and their impact on the future regulation of these environments.

Finally, this chapter seeks to identify the range of disputes between customer service departments and judicial decision for which there is not currently an appropriate remedy, but for which an intermediary regulatory step may be suitable. It will also identify those for which the formal resolutions provided by the legal system are the better remedy. This gap, as identified by Reynolds and de Zwart (2011), primarily exists for disputes between participants or between a participant and a developer.

A number of scholars have offered suggestions for how to fill this gap, primarily favouring a hands- off approach (that is, allowing the companies to do as they want and if customers don’t like it they can go elsewhere) or a form of self-regulation, in which the industry forms a body to regulate itself. The challenges such a body would face are highlighted by those experienced by the ESRB, a body that freely admits it is unable to rate the online component of games, through an “online interactions not rated” notice prominently included on packaging. As Chapter 5 will explore, both of these methods have been tried unsuccessfully in the gambling industry, an industry that has many similar disputes to the types of environment described in this chapter.

4.1 An outline of the issues

There is a range of issues, hypothesised and documented, within existing literature on virtual worlds. I do not provide a comprehensive summary here, but instead attempt to offer indicative disputes in a range of areas, explaining their potential resolution and the means such a resolution may take.

78

Particularly, I differentiate between disputes in which the parties are self-contained (that is, the only parties to the dispute are within the community) and those in which there is an external party interested in the resolution, a distinction which I return to subsequently and which is crucial for bounding the range of issues to which an emergent regulatory approach may apply, which also mirrors the borders which Reynolds & de Zwart (2011) contend is the regulatory gap within the industry.

Intellectual Property & The legal system Taylor’s (2006, p. 125-162) analysis begins by considering a 2004 lawsuit issued by comic book publisher Marvel against the virtual world City of Heroes. This lawsuit arose from the Cryptic character creation engine allowing and encouraging players to ‘create and utilize Heroes that are nearly identical in name, appearance, and characteristics to characters belonging to Marvel’ (Marvel 2004)” (p. 125). That is, it was possible for players to create characters in the environment that were a near-exact representative of characters for which Marvel owned the copyright, and thus to act as those characters within the environment.

These are thorny issues, and are also issues outside of the scope of negotiation between players, or between players and providers. While Cryptic, the developer of City of Heroes, might permit players to create characters in any given style, the permission is somewhat irrelevant if they infringe on the copyrights or trademarks of another entity. Marvel may have a claim against either Cryptic or individual participants (though it seems unlikely they would pursue the latter), but either form of dispute is beyond resolution through the community as Marvel are neither a part of the City of Heroes community nor bound by the contract between Cryptic and their participants.

This dispute provides a clear case of a dispute which would, as a result of the involvement of a third party with no stake in the environment and likely seeking remedies outside of the environment, be better settled through formal mechanisms, whether that be private negotiation between Cryptic, their participants and Marvel (in the case of ‘cease and desist’ or compensation claims), or through formal legal remedies offered by the courts.

Game Mechanics & Account privileges Taylor also describes cases recounted by Grimmelmann (2003), Harmon (2004) and Castronova (2005) that are disputes more readily able to be settled within the community. Grimmelmann describes tax protests in Second Life, while Harmon details a case where a researcher was banned The Sims Online for discussing negative in-game events. Similarly, Castronova details demonstrations in World of Warcraft by players discussing changes to a player class. In each of these cases, Taylor is describing issues that are within the remit of the community; that is, in which the participants

79 involved and the remedies sought are within the bounds of the environment. Thus, these are issues in which greater community input or a better system of handling customer complaints may have prevented the disputes escalating to the point where they were notable.

Both Grimmelmann and Castronova’s accounts refer to issues surrounding in-game mechanics. In such disputes, I would suggest that participant-driven regulation is an alternative to the increased involvement of players in the design process, which Taylor suggests (2006b). As with the Eve Online CSM described in Chapter 6, if players feel they have an input in the design process and a decision can truly be said to be representative of the overall player will, then even if a subset of players are unhappy the dispute is likely to be less severe. I would suggest that a participant-driven regulatory system able to intervene in disputes, and allow players a remedy to appeal what they view as an unfair decision, would achieve the same goals.

Neither of these systems should act as a player veto, and it is never possible to please the entire player base. Rather, by allowing the players a say before the decision or having a process to appeal it after its announcement, players are offered transparency, in which the decision to change the environment is tested against the terms of service and past precedents, which may result in the decision being upheld or reversed, or a compromise solution being found (such as a delay in enforcement to allow players to adjust their play style).

In the case recounted by Harmon, the act of ‘booting’ a researcher/player from The Sims Online, it appears problematic that the capital invested in an environment – social or otherwise – can be removed without the player having recourse to challenge that decision. It may be that the player breached the terms and conditions of the environment, and thus such an act was justified, however currently there is no process, beyond customer service and other than taking expensive legal action, to investigate whether The Sims Online acted within their terms and conditions – and, if so, if those terms and conditions were reasonable. As established in Chapter 2, there is significant personal investment, be that financial or social capital, in these types of virtual environments, and thus it seems increasingly problematic and subject to challenge, as these environments take up an ever- widening role in the lives of participants for companies to, at will, terminate and make worthless that investment.

Both of these disputes provide exemplars of disputes between stakeholders in the environment – participants and companies. Both are cases where neither party is seeking any action beyond the environment itself, that is the disabling/re-enabling of an account and the change or otherwise of a

80 rule regarding taxation. As such, both disputes seem logical territory for an intermediary regulatory mechanism.

Community Taylor next refers to the importance of what I have previously termed the ‘meta-game’, i.e. community forums and blogs. To the extent that these aspects of the environment are supportive of the publishers, there is likely to be support from developers and marketing teams, and tacit acceptance from the legal departments of publishers for the use of trademarks, such as the name of the environment. Should such a community site turn negative, encouraging players to terminate their accounts or otherwise protest the action of the game developers, developer support may be terminated. In that case it is unclear what protections would be offered to the operators and communities formed with regard to the continued use of the developers trademarks.

While the community could continue to support such a site, any issue involving the trademarks is likely to be outside the scope of the mechanisms discussed herein. In a number of jurisdictions there may also exist a ‘fair use’ legal argument, to the extent the term is used for an environments community, and as such may be subject to a wider legal process identifying the jurisdiction under which the site was operating. Regardless, while a participant-driven body could condemn such attempts to censure the community, with the very real possibility of impacting on the company’s decision to continue such action (as evidenced by the example of Sony and fan fiction, which I will discuss subsequently), any formal resolution would be outside the scope of the process I am discussing.

Real Money Trading Real money trading is another prominent issue, with Taylor noting that as early as 2000 “Sony Online Entertainment secured cooperation with the Internet auction sites eBay and Yahoo! to prevent Everquest users from selling game accounts and in-game goods”, while noting that Mulligan (2002) dates such activity back to the 1980s “with the sale of accounts in games like Islands of and Gemstone II, and that in 2000 “it was not unusual for a high-level character to fetch several thousand U.S. dollars on the auction market” (p. 130).

In almost any environment, you will find players who are for and against real money trading. Taylor notes that even in 2000 players considered it “a loathsome practice [...] and often derogatorily term such purchasers ‘eBayers’”; which was an opinion frequently mirrored in my research of Eve Online, despite the presence of a legal RMT market in Eve. There are a large number of players who participate in the activity and not all of the wider player base shares the opinions above. Taylor considers the reasons for this, noting that “high-level players actually do buy accounts as a way of

81 bypassing what is seen as tedious work”, implying that such players avoid the label primarily “used to mark those who have bought loaded accounts and characters but themselves have no real game skills and have not ‘paid any dues’” (p. 130). Again, the reasoning has changed little in 2012, and Chapter 6 details the accounts of real money traders who purchased Eve Online currency because they either found the mining aspect of the game tedious or were short of time and wanted to play the higher level game with their friends.

Many of the objections to such behaviour are highlighted, including the ability of out-of-world wealth to impact on in-world gameplay, the effect on subscriptions if players are able to skip the levelling stage, designer concerns regarding the integrity of the environment, social ties and acquiring in-game skills, as well as online resources sharing optimal play techniques. This, again, can easily be evidenced in 2012 as a community driven Eve Wiki details ship specifications and step-by- step instructions for completing the vast majority of the in-game missions; however, the same degree of coverage cannot be afforded to emergent player vs. player combat.

Significantly, Taylor affords prominence to the concerns of customer service departments about being asked to intervene if an auction purchase or character transfer goes wrong. CCP provide an interesting example, with a formal character transfer service being offered for players who sell their character for in-game currency. Perhaps this concern can then be addressed by internalising the transfer rather than utilising third-party services such as eBay; CCP charge a $20 fee for conducting this transaction.

There is, then, a wide range of disputes that we could categorise under real money trading. By far the most common type of dispute likely to arise is the banning by the company of those players’ accounts who participate in the activity. Such a case is, like the banning cases discussed previously, merely a case of evidencing a breach of the terms of service for which banning the account (or other action, such as confiscation of in-game assets) is an appropriate remedy. In these cases, the community binds all of the relevant stakeholders, and the proposed remedies, and as such the disputes are suitable for community regulation.

Should companies seek external remedy, such as, for example, payment of compensation equal to the funds the participant has drawn from the environment, a participant driven body could certainly consider the case in the first instance (as they have done occasionally in the offshore gambling industry), particularly if the both parties agree to be bound by the findings. Enforcement of the remedy may require either codification of the player body or a formal legal hearing to order and enforce compensation.

82

Productive Players The final broad area considered by Taylor is that of productive players; in this case referring to player created content and modifications within the environment, as opposed to third party sites such as forums and wiki’s. This is not such a significant issue in Eve Online as it is with other environments, such as The Sims Online; however, CCP do still rely on players’ goodwill in a number of areas. One example of this is the test server Singularity (the live server is referred to as Tranquillity), which as well as acting as a place for players to test strategies also acts as a beta environment for CCP to test future deployments to the live server. CCP frequently organise group sessions on this test server to test a new feature they are developing, and one could reasonably argue that this is an example of ‘productive players’.

The broader application is also worthy of consideration. Both Banks (2002) and Kosak (2002) question true ownership of player created assets within the environment and the rights of both the player and the game publisher to that content. While these issues were discussed in some detail in Chapter 2, the pressing question for my current purposes is whether publishers’ claims to these works also creates a responsibility to their users.

The argument can be made that consumers already have the ultimate right; the ability to stop playing and financing the company operating the environment, and indeed CCP’s player representative body the Council of Stellar Management and Bartle’s (2004) comment that “only a foolish designer would ignore the community management team’s input” (p. 623) seems to acknowledge such a position amongst developers. Of course, as discussed in Chapter 2, it is not as simple as saying players could leave if they’re not happy – they have social ties and investment in these spaces.

Everquest uses the tagline "You’re in our world now”, and Taylor (2006) suggests that “over time many users came to cite this as summing up not simply the experience of virtual-world immersion but a problematic management stance in which the definition of whose world it was actually ended up negating their (often valuable) experience and input” (p. 148). Mulligan & Patrovsky (2003, p. 161) argue that the vision of designers “does not normally allow for flexibility or change based on the actual play styles of for-pay gamers. No designer or team of designers could possibly hope to close all the holes or find and fix all the flaws [...]; the collective intelligence of a player base in the thousands or tens of thousands dictates that any design hole or flaw will be found and exploited”. Even the strongest of contemporary design-based argument does not call for the exclusion of the community from the design process; rather the degree is to what extent they should be involved, and, in some cases, the rights they should be afforded for participating.

83

Sony organised a June 2004 Guild Summit, involving seventy Everquest players, which Taylor noted was “organized with the explicit intent of player input on the game and design decisions”. While this seems to have garnered a mostly positive opinion from those present, Taylor noted that “[s]everal message-board commentators noted how much less attention was given to mid-to-lower or casual player’s concerns, and in this regard it is worth being clear about how the subset of players invited – leaders of high-level guilds, fan Web site operators, longtime players – influences its role as a representational mechanism” (p. 149).

In many ways, this foreshadowed the CCP Council of Stellar Management, which was founded with a White Paper Document (CCP Games, 2007) and has evolved over its operation. By virtue of being elected from within the player base, it does favour the over-representation of the same kind of high- level players that Taylor observed. New players are likely either not aware of the election or, if they are, unclear who to vote for that will represent their interests. The large alliances have the benefit of being able to instruct their members to vote for a specific candidate, meaning that the large power blocks within the Eve Online community are over-represented in the CSM.

The wider issue here is that while designers have long listened to players, and have created many formal or informal mechanisms for facilitating this, ultimately, designers and players have different, often competing, objectives, as described in Chapter 2. While Taylor (2006b) argues for including players in the formal design process, others such as Bartle posit that designers should be free to create whatever it is they wish to, and players to participate or not. The model of community driven regulation, I suggest, ultimately leans towards the Bartle position, merely testing whether the rules created are enforced fairly. In doing so, it also provides the community with a means to express their position and pressurise developers regarding design and other corporate decisions.

Taylor acknowledges the problems of placing players in the design process, and many of those same limitations apply to this mode of regulation. Amongst these are problems for traditional understandings of intellectual property and for the roles of institutional stakeholders, with both designers and corporate interests being asked to subject themselves to a third-party process that they traditionally have not. In some ways though, such an approach may prove less problematic than giving players a formal role in the design process. As discussed, democracy in design terms does not have a successful history, and even the current implementation in Eve Online has occasionally proved problematic.

Both designers and corporate stakeholders are more experienced with justifying decisions, both formally through court processes and to the community through discussion forums (albeit often

84 through a community manager serving as an intermediary). Thus, while giving players the ability to engage in dispute resolution, which would be an improvement on the current state of affairs, it is unlikely to completely eliminate the demand of some, such as Taylor, to give players a more formal role in the ongoing design process. Giving players such a mechanism to appeal what are seen as either unfair or unwarranted developer decisions may meet many of the objectives that Taylor highlights.

4.2 Defining Cheating A number of the more difficult issues in online environments relate to an attempt to form a definition of cheating. While developers may argue that “anything we tell you not to do” is cheating, the emergent nature of such environments results in players continually seeking new ways to gain an advantage.

A portion of the player base often sees real money trading as cheating. This is generally a binary determination: a player either participated on real money trading or they did not, which was either a breach of the terms of service or was not. Often, cheating is harder to define, and companies are unable to create terms of service that react to each of the possible ways in which participants could interact with the environment. Taylor refers to this as ‘(il)legitimate play’, and highlights the difficulty with identifying such behaviour by noting that once developers “put a product out there the players will do with it what they will, often playing in ways the designers never anticipated” (p. 136). Similarly, Mulligan & Patrovsky (2003) note “Developers spend years focused on making a game. If they’re not careful, this will breed certain assumptions, such as the world they created will remain their world and the players will play the game the way the creators want it played. That will not happen. Players have their own motivations and objectives” (p. 217).

This behaviour seems particularly problematic for developers. Taylor notes a thread amongst developers that “at time expresses itself with statement about players ‘not playing right’, ‘causing trouble’ or ‘ruining gameplay’. In general, there are fewer examples of this in Eve Online than many other environments, as Eve is, as will be discussed in more detail in Chapter 6, a relatively free-form world in which CCP adopt a laissez-faire type of regulation; that is, pretty much anything goes within the environment. The caveat I offer there is important as there are two types of issue which, during my research period, proved problematic for CCP and participants alike. The first of these is exploits, i.e. the game software allows a player to perform an activity not intended by the developers, and the second is the use of external products or macros to automate actions of the in-game experience.

85

The use of such external aids is not new, and indeed Taylor describes the development of a product, EQ Macros, “that allowed players to record and play back keystrokes. According to its developers, the intended use was not to create unfair advantages but instead that ‘EQ Macros takes the grunt work out of playing Everquest, and makes it more fun.’” (p. 137). Taylor also describes a tool by the same developers called Xylobot, which was a more generic tool that “included on-screen maps, waypoints, and auto-start options”, and notes that these applications were not free, though did provide trial versions (p. 137). At the same time, players using “EQWindows or, more often, had second computers attached to the Internet, were able to use map sites and the vast helper databases available”.

Players “found a range of functionality not proscribed by the game’s designers”, and that “with an abstract notion of “fair play” such helpers certainly could constitute cheating in the minds of some, though I think they are better seen as pointers to underlying design insufficiencies within the game itself or alternative play models deemed illegitimate or not fully accounted for” (p. 138). One example of this was ShowEQ that, Taylor notes, is “deeply contested by both fellow players who do not use the program and EQ’s designers”. This software was a source of much debate, and Taylor noted, “Its existence prompts discussions about not only what fair play is, but what the legitimate bounds of the game are”.

Sony did crack down on the use of automated scripts in the same way CCP have; issuing bans to those found using the scripts. However, the debate within gaming communities surrounding whether such action is cheating continues, and indeed I would equate it to advantage play in online gambling (discussed in Chapter 5). Both are equally difficult to delineate – where is a player using their skills (in or out of game) to gain an advantage, and when are they cheating? If we acknowledge the use of Wiki’s and other tools, but ban automation, is the act of scripting what we are actually prohibiting?

Cheating vs. Advantage Play Cheating remains a difficult term to define, particularly so in contemporary gaming environments. It is a term frequently used to represent a range of situations, including where players do not understand the reason they are losing to a (supposedly) less skilled opponent and where players are exploiting a bug. Caillois (2001), Huizinga (1995) and more recent work by Consalvo (2007) have all contributed to the literature on cheating, however, I believe a distinction between cheating and advantage play, based on observations of the offshore gambling industry (described in Chapter 5), is more suitable for contemporary online environments.

86

Such a definition returns to the work of play theorists such as Huizinga (1955) and Caillois (2001), as well as the more recent work of Crawford (2003) and Koster (2005) to understand that players are by nature competitive and will try to find the optimal solution for any given problem; many of those solutions are within all known rules (advantage play), while some transgress them (cheating). This border is constantly in flux as operators revise their rules and communities revise their norms in response to past actions.

Huizinga (1955) argues that “[a]s soon as the rules are transgressed the whole play-world collapses” (p.11), but differentiates between those who overtly ignore the rules and those who appear to be honouring them while subverting the game, stating that the “player who trespasses against the rules or ignores them is a ‘spoil-sport’. The spoil-sport is not the same as the false player, the cheat, for the latter pretends to be playing the game and, on the face of it, still acknowledges the magic circle”.

As in my distinction between cheating and advantage play, Huizinga notes that cheating may itself be a form of competition, noting that “[a]rchaic culture, however, gives the lie to our moral judgment in this respect, as does the spirit of popular lore” (p. 52), citing the case of the hare and the hedgehog in which the hedgehog, seen as the good-guy, wins by what we might refer to as cheating. This seems to provide substance to an argument that there has always been a degree of uncertainty as to how to describe utilising loopholes in the games structure and external aids to attempt to win a game.

Caillois (2001) defines both cheats and professional players as corruptors of the game, arguing that those who are not satisfied by the games mechanics turn to alternative means to find an outlet for their play (2001, p. 45): “The cheat is still inside the universe of play. If he violates the rules of the game, he at least pretends to respect them... he safeguards and proclaims the validity of the conventions he violates, because he is dependent upon others obeying the rules. If he is caught, he is thrown out. The universe of play remains intact. Neither does the professional player change the nature of the game in any way. To be sure, he himself does not play, but merely practices a profession.” (2001, p. 45).

Contemporary Environments The approach above does not seem to extend well to the type of contemporary online games I discuss here. Firstly, the Caillois (2001) definition seems overly broad, as we could construe ‘alternative means’ to be anything from forums to wikis, add-ons to interface overlays, keyboard macros to fully automated bots. Secondly, as with Bartle (2004b), such an approach is problematic; it is certainly not the case that in contemporary environments professional play does not change the environment (or, as Bartle phrases it, exist in a different magic circle). Gold farmers have a direct

87 effect on the economy by increasing the supply of resources, and in a game with legitimised real money trading it is hard to say that they are breaking the ‘conventions’ of the game.

Crawford (2003), a game designer, notes “It’s easy to ruin a good challenge by exploiting loopholes in the rules. No matter how carefully you set up the challenge, somebody will think of a way to subvert your system. One solution to this problem is to write reams of rules to prevent every imaginable form of cheating”, noting “players rely on simple rules and reject clever tricks that subvert the challenge of the game. “No fair!” is a cry that makes up for a lot of complicated rule- mongering” (Ibid, p. 39-40). In contemporary online environments of course, there are two problems with such an approach: the players may not know each other and are likely so geographically diverse that the social implications of Crawford’s “no fair” cry are unlikely to have impact upon their participants. Further, while developers and publishers can certainly “write reams of rules”, technical limitations may prevent their implementation, as seen with the botting in Eve Online highlighted in Chapter 6.

Koster (2005), who also documented the rights of the avatar, argues that cheating is a form of competition, noting that the human mind naturally seeks shortcuts, and that “once a player looks at a game and ascertains the pattern and the ultimate goal, they’ll try to find the optimal path to getting there […] players often have little compunction about violating the theoretical ‘magic circle’”, or, more simply, “many players are willing to cheat”. His overall perspective – that this is natural and a sign of lateral thinking rather than a problem – is supported, he claims, by warfare, “where it [cheating] is acknowledged as one of the most powerful and brilliant of all military techniques”, concluding that by cheating, the player is “choosing a battlefield that is broader in context than the game itself ... From a strict evolutionary point of view, cheating is a winning strategy. Duellists who shoot first while their opponent is still pacing off are far more likely to reproduce (p. 112).

Koster argues that designers and players struggle with defining cheating, but for him “it boils down to whether or not the extraneous action is one that resides within the magic circle”, noting the issue with players attempting to enforce rules which are not enforced by the technological system. He argues the preconception with gaming environments is “if the game permits it, then it’s legal” and that those attempting to solve this are “fighting a losing battle against a natural human tendency: to get better at things” (p. 114). Dekoven (2002) highlights other examples of this, noting that there are cases where players bend the rules to create a fairer environment.

In online environments, where you have a multitude of human actors, these problems are only amplified. In the gambling industry, as I will examine in Chapter 5, players and providers normally

88 accept that players will attempt to do whatever they can to gain an advantage within the rules. Here the term rules actually refers to some form of composite between the written terms of service and industry norms, so as to prevent rules stating “If you deposit on a Tuesday, 25% of your balance will be transferred to our Christmas party fund” (a hypothetical and extreme example), as will be considered in the remaining chapters.

Resolving Disputes This differentiation between cheating and advantage play, as applied to contemporary online environments, seems supported by both traditional play literature and contemporary designer accounts. While it is primarily a distinction of terminology, loosening the rhetoric around cheating to me seems advantageous. We can broadly divide play approaches into three styles: developer- approved, advantage play and cheating. The first and last of these provide simple solutions (permit it or take action against it), while advantage play is constantly in flux between the two. By doing so, we can closely align disputes arising within online gaming environments to those in the last 10 years of offshore gambling, making use of precedents and resolution strategies where appropriate.

Within Eve, real money trading and automation (the use of bots to automate in-game activity) are widely regarded as a form of cheating, however, such a definition is not universal, and a number of other technologies pose more difficult challenges. Whatever definition of cheating one ultimately prefers, these are clearly issues on which the community is able to adjudicate. And perhaps it is best that it is the community that adjudicates for it is the community that best understands the practices that have become commonplace, the precedents that have been set in the past by the developers, and the norms that have been established. Before considering the applicability of responses (in code, in regulation and in the community) we first need to find a resolution for the higher-level debate: is this cheating or merely an externalisation of the natural competition found in gaming environments? I will return to this difficulty of defining cheating later in this chapter.

It is clear that this is the subset of disputes that is most closely aligned with the conditions I have suggested for community regulation. While there are difficult issues here, and the determination of the terms and conditions and their applicability to a particular issue are likely to be problematic, these are all issues involving the mechanics of the environment. As such, these issues only involve participants within the bounds the environment – players and platform developers – and thus remedies are limited to those within the environment.

While Taylor provided a fairly comprehensive framework for considering these issues, new challenges have emerged since 2006, regarding mechanics in contemporary social games and virtual worlds, which might be considered gambling, and which have been determined to be so in other

89 jurisdictions. More broadly, they highlight a range of mechanics that are themselves problematic, including the increased use of real money, and so the staking of financial, as well as social, capital in the environments.

4.3 Gambling, Social Games & Financial Addiction One of the more notable changes in virtual worlds occurred with the July 2007 banning of gambling in Second Life. Prior to 2007, highly developed casinos were a frequent feature on the landscape, and an oft-highlighted game mechanic. In response to the United States’ passing of the Unlawful Internet Gambling Enforcement Act (UIGEA), as part of the SAFE Port Act, Linden Labs felt it necessary to prohibit gambling within the environment, and introduced a policy to do so. While the enforcement of this in the contemporary environment is questionable, the policy continues to this day.

Hornle & Zammit (2010) offer the example of Second Life in discussion of “de-localized gambling in Virtual Worlds” (p. 8), noting that Second Life has its own currency and per Linden Labs nearly US$50 million changed hands monthly in 2008. Hornle & Zammit note that while “such virtual worlds are currently mainly used for gaming and seem a matter of fantasy to many Internet users at present [… they may] also be used for online gambling. This can take many different forms, for example users from a variety of geographical locations, represented by their avatars sitting round a virtual poker table, or a simulation of the horse-racing industry”.

Figure 1: Second Life c. 2007 – Image via Google Images.

90

They highlight the difficulty of complying with individual countries legislation in a multi-national environment, noting that “an operator of a virtual world established in another jurisdiction where gambling is not regulated may well decide not to ban gambling or even promote the use of the platform for such cross-border activities”, and continue to note that enforcement takes place both at the level of enforcement authorities of a particular state and also at the platform level, noting that “even if a virtual world operator decides to ban gambling, the question arises whether the operator itself is effectively able to enforce the ban on online gambling engaged in by users of the second world”, questioning whether “any [casinos] are left or whether new ones have developed”. To this day, logging in to Second Life and entering a search term such as ‘slot’, ‘Casino’ or ‘Las Vegas’ into the map search will allow you to easily locate gambling activity taking place within the environment; not as advanced, well built or visually attractive as in its prime, but still present.

Figure 2: Second Life c. 2012 – Image my own

Hornle & Zammit note that the rules of Second Life now state, “all forms of online gambling are prohibited and Linden Lab may confiscate any virtual land or other objects used for gambling and may exclude users infringing the rules. Furthermore, in order to prevent users finding virtual casinos, Linden Lab blocks any advertising of gambling opportunities and acts on notifications of gambling activities in its reporting system”; that is to say that Linden Lab operates on a take-down notice and relies on users to report the activity, while users may well learn about the service from outside blogs (or, indeed, in the example above by typing ’Vegas’ in the Second Life provided search feature). Hornle & Zammit note that Linden “would have to constantly search its servers hosting the

91 virtual world to find the code enabling the online gambling. This is not impossible, but may be time- consuming and expensive to implement”. This must draw into question both the desire and technical feasibility of implementing such regulations within the environment, but also the community’s opinion of such regulations considering that Linden Labs generally rely on player complaints to police their environment.

Methenitis (2007) also raised questions over the mechanics in other virtual environments, specifically: massively multiplayer role-playing games. As I address in Chapter 5, these appear to be more ‘gambling-like’ activities than true gambling, as is the case with many other activities permitted by law, such as the stock exchange. However, other mechanics have in recent months and years also been brought into question in other jurisdictions, either being seen as gambling activity or otherwise enticing participants (especially minors) to pay money as part of an online gaming or social activity in problematic ways.

Purewal (2012b) documents debates around the mechanics deployed in free-to-play games, , questioning whether “the use and/or marketing of freemium games/in-app purchases/ is ‘evil’”, noting that “if a game (or other software) is designed in such a way that it encourages its users to pay money, potentially quite a lot of money, in return for little more than transitory enjoyment or other advantages, AND if the majority of those users are children, then parents are going to start getting angry, businesses are going to get sued, and politicians will start getting interested”.

Purewal cites articles from GamesIndustry.biz and The Wall Street Journal as evidence that “the first two [are] already happening [and] it’s only a matter of time before the political interest starts up – which will rapidly lead to regulators in key territories (in particular the FTC in the USA and the European Commission in the EU) announcing investigations into it”, citing the Japanese attempt to regulate Gacha as the start of a trend. Purewal argues that “there is the potential for some form of industry wide self-regulation here based on more enlightened working practices as well a greater willingness to name and shame the few bad apples that spoil the barrel”, while noting that “there’s precious little sign of any industry consensus or action that could lead to justified self-regulation. Until that begins to happen, there will be nothing to stop piecemeal regulation in different countries”. The kind of system called for by Purewal, particularly the “willingness to name and shame the few bad apples that spoil the barrel”, is in fact remarkably similar to the system that evolved in the offshore gambling industry over a number of years, described previously and expanded on in Chapter 5.

92

While the formal acceptability of mechanics is likely an issue for governmental regulation, the community can certainly influence the number of participants utilising any particular operator. One example of this is the offshore gambling website Wizard of Odds, operated by Michael Shackleford, Adjunct Professor of Casino Math at the University of Nevada, Las Vegas. Shackleford, as with Sportsbook Review, maintains a blacklist of casino operators, publicly shaming those who, through testing, offer games that appear to subvert standard probability. Certain casino software has been known to be able to guarantee a particular win/loss percentage, doing so through generating non- random outcomes to games, effectively turning table games such as blackjack and into de- facto slot machines, with set payouts. By making such information publicly available, Shackleford both informs players and, presumably, reduces the profitability of such operations.

From the above discussion it becomes apparent that there are likely to be a wide range of disputes emanating from these environments. There will be discussions over the ethics of particular mechanics, just as there has long been with gambling services, and we are also likely to see disputes between players and platform providers over terms of service, cheating, payment disputes and so forth, and highlights the range of issues that have arisen since Taylors work on Everquest. While Dibbell’s ‘Play Money’ (2006) demonstrated the range of participants who were profiting from virtual worlds, those profiteers are increasingly entering more mainstream online environments such as Facebook, and as they do the range of disputes those environments face will only increase.

As with the earlier examples, a participant-driven regulatory body could have a number of roles in such environments. Disputes between participants over the terms of service, or actions taken by participants within the environment, could certainly be subject to consideration by the body, just as they are in the offshore gambling industry and just as I have suggested they could be for the range of environments discussed previously. Issues in which the publisher is seeking external remedy from the participants (that is, they claim to have over-paid or subsequently discovered that the participant should not be paid) may, though, need external enforcement if the participant is not willing to submit to the authority of the community body.

Policy decisions, such as whether the type of mechanics seen in these social games are ethical, addictive, and should be regulated at a higher level, are decisions over which a community body would not have jurisdiction. As in the examples discussed earlier in this chapter, they are certainly areas over which a community body could use its influence to put forth the opinion of the community to any formal process, and similarly could highlight potential problems arising from such mechanics, with the possibility of damaging the reputation of those companies that continue to

93 utilise them, and the potential implications of that as seen through the Sony Online Entertainment case discussed previously.

4.4 Terms of Service & EULAs Many of these issues have, traditionally, been governed by the EULA; the enforceability of which have often been drawn into question. Donahue (2012) discusses the impact of the Bragg & MDY cases on contemporary online environments, noting, “After Bragg, the enforceability of many standard components of virtual world EULAs is questionable. While many operators have conformed their arbitration clauses to the result in Bragg, the analysis in this case is readily applicable to the self-help provisions as well”. The ‘self-help’ provisions Donahue refers to here are the other protective clauses claimed by operators such as the ability to terminate an account and confiscate the assets. Donahue contends that these clauses may be subject to legal challenge just as the arbitration clause was in the case of Bragg, with the court’s “substantive unconscionability analysis focused on the broad powers that Linden Labs had reserved for itself” (p. 450).

We might, then, conclude that just because such clauses are present in the EULA or Terms of Service, they should not be enforced as written but rather the term should be subject to evaluation by the regulatory mechanism to see if it is a fair, equitable and enforceable term. As such, as I continue to consider possible regulatory solutions, it is necessary to consider their suitability to evaluate such factors.

The issues discussed above broadly demonstrate that there are some issues that can only be negotiated between a company and a third party, or a company and a government or legislative entity. For these disputes, direct negotiation and/or the involvement of the traditional legal system are likely the only recourse. There is also a third category of cases: those involving real money and cheating, player accounts and assets, bugs and exploits, which are community issues with nobody to satisfy but the operator, the player and community sentiment.

For such disputes, it would seem that traditional dispute resolution systems described in Chapter 2, through customer service departments and the legal system, are often unfair, untimely and overly complicated, and this gap seems worthy of further investigation. If these systems do not present the long-term solution for the industry, at least in the first instance, it is worth exploring what potential solutions may look like, and whether their implementation may prevent the escalation of disputes to the stage where legal intervention or governmental oversight is necessary, with all the complications inherent in such mechanisms. The following sections will consider a number of possible solutions put forward by a range of authors, from designers to legal scholars. In doing so, I consider their

94 applicability to those disputes identified here as suitable for community regulation, recognising that, as Reynolds and de Zwart (2011) have identified, and as I discussed previously, some disputes are simply better suited to formal resolution through the legal system.

4.5 Categorising Potential Regulatory Issues One aspect highlighted by the above discussion, both of Taylor’s (2006) work and issues that have arisen subsequently, is that a regulatory body is better for mediating disputes between individuals and participants than it is for considering disputes outside of the environment or the wider legal issues surrounding companies.

Similarly, some disputes, where large amounts of compensation (especially in environments which do not offer a cash-out mechanism) are demanded, or in which corporations are requesting funds from participants, may be better handled by legal jurisdiction. Smaller cases could be handled by the mediation system, and environments where a cash-out system is in operation could be requested by the panel to restore property or other assets within the environment that the participant would then be able to realise through traditional methods. Similarly, if a player agreed to be bound by the decision of such a body, it may be able to decide on cases where small amounts of funds are requested from players. However, if the body were not codified, enforcement action would be likely to require legal sanction.

It is also clear that there are two factors affecting the categorisation of a dispute: the type of participants involved and the type of remedy sought. From there, I identify seven different categories of cases that arise in online environments to form a typology of disputes, namely:

 Player vs. Player  Player vs. Provider with in-world demands  Provider vs. Player with in-world demands  Player vs. Provider with out-of-world demands  Provider vs. Player with out-of-world demands (e.g. hacking)  Provider vs. Third Party with out-of-world demands (e.g. bot provider)  Third Party vs. Player OR Provider with out-of-world demands.

It is also likely that specific cases (and counter-suits) may contain two or more of these types of disputes. For example, a provider taking action against a third party who wrote a botting application (in the mould of, for example, WOWGlider) would be requesting out-of-world action, i.e., that the company stop offering their product. Such a case may, by extension, feature claims by the provider against one or more players for confiscation of account assets or closure of the account. The

95 provider may counter that their operations were not breaching the terms of service as written at the time of the actions, and players who were already subject to in-game action may counter that if that is the case then any suspensions/confiscations were unjust.

The mediation system alone would be sufficient to act on the first three categories mentioned above, if it were to receive sufficient buy-in from players and providers, and these three categories are representative of the majority of cases that are likely to be raised in online environments. The cases of Marvel vs. City of Heroes, or Blizzard vs. WOWGlider are relatively unusual in the wider context of the daily operation of these environments; merely being able to adjudicate on the first three categories from companies who either opt-in or are co-opted into the system would be a substantial improvement over the current situation.

4.6 Offered Solutions The subject of regulating these online spaces has, unsurprisingly, been discussed previously. As discussed below, none of these has received universal adoption or praise. There may, of course, be no perfect solution to regulating such a multi-national industry. In Chapter 5, I outline a mechanism, previously deployed in the offshore gambling industry, through which the communities participating in these environments are able to share information and enact a form of regulation. This regulation, which I term ‘reputational regulation’, has been shown to serve the objectives of the primary stakeholders, should it gain the co-operation of platform providers.

Here, however, I discuss the advantages and disadvantages of solutions previously offered by a range of authors, and their potential contribution to the future regulatory culture of these environments. In Chapter 5, I return to these suggestions and discuss their implementation in the online gambling industry, considering where they succeeded and where they failed, and how participants’ exposure to these mechanisms ultimately paved the way towards participant driven regulation.

No Regulation One perspective is to allow the industry to operate as it always has: to allow designers complete freedom to create and shape the environments as they wish, with the theory that people who don’t like it don’t have to participate in it. As explored in Chapter 2 and previously in this chapter, it is not that simple, with players investing both financial and social capital in the spaces created, and through roles such as the community manager or mechanisms such as discussion forums, feeling that they have a stake in the development of the environment.

96

Bartle (2006b) argues, “Virtual World developers do rule their respective virtual worlds, but not in the same sense that real-world states are ruled – even tyrannical dictatorships. They rule not as governments, but as gods”. Specifically, he argues that “developers can do whatever they wish in their world [and that] this is true whether the developer likes it or not” (n.p.). In the days of MUD, where you may have had one or two authors – this was the designer. Now, the majority of contemporary environments feature a mix of designers, marketing, legal personnel and community managers. It is then reasonable to consider whether the degree of protection Bartle and other designers’ request (as outlined in Chapter 2) should be extended to these environments.

Bartle (2004) acknowledges this, noting, “[t]here’s a governmental issue here. If the community management team wants something in the virtual world, does the designer have to put it in or can they say no? [...] It’s my belief that in the end, the designer must be in overall charge – but that only a foolish designer would ignore the community management team’s input” (p. 623). Similarly, Taylor (2006) notes, “[a]t what point does something shift from being solely the property of an original author to being that of those who not only use it but give it meaning” (p. 129). Both of these approaches seem to suggest a ceding of control in contemporary environments.

If we are able to say, then, that the community, possibly through the community manager, can not only influence the design of the environment but also take it in new directions not foreseen by the designer, the question of players’ rights and citizenship come to the forefront. While I argue that players should at least have the right to appeal decisions made by platform owners, at no or limited expense, it may be that players should be afforded more rights. Such rights are beyond the scope of the issues I address in this thesis and are subject to further research.

More troublingly, Taylor opines (p. 132) that designers often “place actual players as consumers, not authors, of the game. On the design end this can be heard in comments that frame users as ‘not playing right’”, noting that “what is fascinating are the ways, for many designer’s legitimating this kind of activity poses some serious threats to not only their game, but the status of MMOG’s in general”, referring to Marks (2003, 75) who states that “When people claim that having time invested in the game somehow gives them authority or ownership over elements of that game, you certainly have a situation that could threaten the entire genre itself” (p. 132).

On the other side of this experience are the players, and as Taylor notes, “Outside of any individual player’s time the account is, in fact, devoid of meaning or game status. It takes a player to create a character, and it takes the time of the layer to develop that character [...] Indeed, while the owners of a game provide the raw materials through which users can participate in a space, it is in large part

97 only through the labor of the players that dynamic identities and characters are created, that culture and community come to grow, and that the game is made animate” (p. 133). Not only is the design of the environment able to be modified by the input of the participants, but also without the participants the environment (and by extension the genre) has no value.

Taylor considers the uneven representation of the player–developer relationship, acknowledging that while players often present this from an argument that they should be able to do whatever they want with their accounts (i.e., sell them), corporate owners have the advantage of “the full weight of their access to legal and judicial remedies”, and that “the battle over user autonomy would not be nearly as worrisome if people were operating on a level playing field with the corporate owners” (p. 133-134). Amongst the many other reasons discussed throughout, this uneven balance seems to invite some form of representation for the players.

Doctorow (2007) claims that online games are dictatorships. He, like Lastowka (2010) subsequently, compares virtual environments to Disney theme parks, noting that Disney enforces its own rules and offers its own currency (or did until October 2009) on their private property, a situation analogous to virtual worlds. He also refers to disputes between players and the Second Life developer Linden Labs, noting that if you have accumulated wealth within the environment, “your virtual capital investments are totally contingent” (p. 3) on maintaining a good relationship with the developer.

Doctorow’s solution to this wealth issue is a democratic game: “World of Democracycraft”, which he states would be open-source and run by elected representatives. As he himself notes, however, “I’ve never done anything run by a government agency that was a lot of fun. It’s my sneaking suspicion that the only people who’d enjoy playing World of Democracycraft would be the people running for office there” (p. 4). As with LambdaMOO, the Eve CSM and A Tale in the Desert discussed elsewhere, implementing even limited democracy in online environments has a chequered history, and so Doctorow’s reservations with such an approach seem legitimate.

Adopting no regulation at all, then, does not seem appealing as a long-term outcome. If developers have complete discretion to create environments, and to create and enforce any rules within that environment, to which players have no recourse other than to leave the game, this poses an increasing problem as participants continue to become more reliant on online spaces (Castronova, 2008). If players are afforded no recourse, then participants must question whether they should be investing in these spaces, socially or financially.

98

Self Regulation The video game industry has long been a proponent of self-regulation. While many countries have their own system for regulating and rating video games, one example of this is the ESRB in the United States, as highlighted by Pitofsky et al. (2000). Pitofsky states, “In the early 1990’s, Congress responded to concern about the violent content in some electronic games with hearings and legislative proposals. Although no legislation was enacted, several members of Congress were critical of the electronic game industry for its lack of a self-regulatory system to rate electronic games. In 1994, industry members formed the Interactive Digital Software Association (“IDSA”) to address this criticism. The IDSA, in turn, created and funded a separate division, the Entertainment Software Rating Board (“ESRB), to develop an interactive software rating system” (p. 13). Many countries have a similar approach, and such a system is now well established and operational.

It is important to note, though, that the types of games these bodies were set up to regulate are single-player, local, multiplayer, or, in some cases, LAN-based games, in which the experience was controlled purely by code and the other players were expected to be known to the end-user. They were not designed for the massively multiplayer games of today, where the user may be playing with any number of other participants around the world, and elements of the game experience are perpetually changing at the hands of game designers, and rule interpretations are constantly made by game-masters monitoring the live operation of the environment. As Warner & Reiter (2005) note, “most rating boards have acknowledged that it is not feasible to rate online games – the ESRB includes the proviso “Game Experience May Change During Online Play” as part of its rating of the offline content of online games”.

Crucially, such rating bodies make no attempt to regulate the behaviour of those operating the game environment or interpreting its rules. There have been a few notable attempts to influence this behaviour, either on an industry-wide or individual game basis, and I will briefly outline two of these here.

Koster’s (2000/2006) “Declaration of the rights of the Avatars”, and subsequent “Advice to Virtual World Admins”, discussed briefly in Chapter 2, is one such potential framework for the industry to govern itself. Koster precedes his list of avatar rights with the statement that “the ease of moving between virtual spaces and the potential transience of the community do not limit or reduce the level of emotional and social involvement that avatars may have with the community, and that therefore the ease of moving between virtual spaces and the potential transience of the community do not in any way limit, curtail, or remove these rights from avatars on the alleged grounds that avatars can always simply leave.”.

99

The principles themselves were relatively wide-ranging, from declaring avatars “free and equal in rights”, declaring that the “code of conduct is the expression of the general will of the community and the will of the individual who maintains the hardware and software that makes up the virtual space”, delineating the prominence of the terms of service, free speech, the accountability of administrators and so forth. As noted in Chapter 2, this was met with a negative response from the administrators of environments operating at the time, which Koster lists in detail, including the following quotation:

If I were the United States Secretary of Virtual Worlds and I were shopping around for an administration policy for USMud I would start with something like this. If I were Joe Businessman, I might pay lip service to this, but I sure as heck wouldn't put it in my user contract and leave myself open to lawsuits.

Instead, Koster offered a document entitled “Advice to Virtual World Admins”, which he noted “admins find [...] much more palatable. Phrased in this way, it’s not an abrogation of their power. It’s concrete advice that will help you retain your playerbase. In fact, some even said they’d be willing to sign it as a “declaration” because it would make them look good as admins to adhere to such a standard”. This revised version replaced the prior term regarding the will of the community, for example, with one stating “The code of conduct should evolve based on the way the culture evolves, and players should get a say in how it evolves. The mud admins get to write it however they want, but they have an obligation to listen or else the players might leave”, which mirrors Bartle’s comment discussed previously with respect to listening to community managers.

While it is interesting that some developers found these principles agreeable, it is safe to say that they have not been ‘signed as a declaration’ by the wider industry. When Koster attempted to launch his own social place, Metaplace, in 2008 he used a variation of these terms of service as the terms of service for the environment, in which he included terms such as “Reasonable processes to resolve grievances with Metaplace and world creators” (Koster, 2008). The Terms of Service also demonstrated the limitations of the law under which Metaplace operated (i.e. US law) with a term stating that players would not be spied on / monitored prefaced with caveats, which Koster (in Axon, 2008) later explained by stating “the law says that while we can ignore certain kinds of things, it's illegal for us to ignore gambling, for example”.

As with the examples from Second Life discussed in Chapter 2, terms such as “You can't punish someone in a way not in the code of conduct, and you the admin don't get to rewrite the code of conduct after the fact to make it legal” (Koster, 2000/2006) certainly do not seem to be universally

100 practised by environment administrators. From my research with Eve Online and other environments, this term remains representative of the expectations of the environments’ participants, just as it was in the days of MUDs. Players enter these environments with the norms established in their everyday lives, and those norms often replicate a legal system in which the letter and spirit of the law are recognised, and cannot be re-written on a whim by those charged with enforcing them.

The Eve Online CSM could also be seen as an example of self-regulation, and the CCP White Paper (CCP Games, 2007) delineates both the rights of players and the limit of the remit CCP enjoy in governing the environment. It also acknowledges the ever-present role of the players, stating, “feedback between CCP and its customers – or members of the society – was always present in the interest of adapting the product to meet consumer demands” (p. 6).

The document continues, noting that “every individual starts their experience in EVE on equal footing”, and that “there is a social contract system in effect in EVE. New players cannot join the society without agreeing to the terms of the EULA [...] which spells out not only the technical restrictions imposed but also establishes the conduct by which players may treat each other in a real-world context via interactions in the game”. CCP also claim that “Individuals have complete freedom in choosing whether or not to agree to these terms” (p. 7), though, as seen in the Bragg case, a court may take a different view considering that Eve could be said to be a unique environment, just as Second Life was in the Bragg judgment.

Another interesting aspect of the CCP document is the responsibilities they absolve; “abusing the trust of other individuals is an affair that is left to society itself to contend with. Crimes are not persecuted by the legislator here: the fate of peers who commit wrongdoings such as theft, fraud, destruction of property and even ‘murder’ is determined exclusively by the society [...] provided that the means of execution complies with the ‘meta-law’ of the EULA and Terms of Service” (p. 8).

CCP continue to list the rights of players, such as “freedom from undue external influences” and “unlimited interaction with other individuals” before allocating the right to have “influence on how society is legislated”, which, they state “until now [...] has not been fully accessible. The goal of CCP is to provide EVE’s individuals with societal governance rights”, noting that the role of elected representatives “will be to uphold the society’s views as best they can via direct contact and dialogue with CCP”, and that “selected player representatives [will have] the same opportunity to discus and debate the ongoing evolution of EVE that CCP employees have”. (Pg. 9-10)

101

While the document goes into some detail on the election process and the terms of such membership, it suffices to state that the “resulting council would have the responsibility of identifying what the most pressing electorate issues are and voting to determine which ones will be escalated to CCP for resolution; only a 51% approval vote would be needed to pass. Every topic that passes these layers must then be examined by CCP. From here, one of two outcomes is possible: either the issue is “supported” with plans for an implementation or otherwise prudent follow up; or the topic is denied upon grounds that are publicly documented with supporting arguments” (p. 12).

While such a mechanism is certainly a step forward from having no form of regulation, it is still company specific, with meetings held at the behest of the company. Problems of representation, detailed in Chapter 6, still occur, and the CSM are not in a position to assist with individual customers’ disputes. For example, a player whose account is wrongly banned is, if not overturned by the customer service department, still faced with filing a case before the District Court in Reykjavik should they wish to seek resolution or restitution.

Government Regulation The majority of government attempts to regulate online environments originates in Asia. As discussed briefly in Chapter 2, the Japanese government is beginning to regulate particular environments that operate the ‘Gacha’ mechanic (akin to a reward for completing a set of trading cards), however, China has long had a policy of government regulation, primarily on imported games. Nan & Fu (2011) note that “Korean games’ market share in China has gradually decreased from 100% in 2001 to 26% in 2010”, citing Daewoo Securities analysis Kim Chang-kwean as stating “the Chinese government started to protect its game industry through regulations, putting the Korean online game firms at a disadvantage” (p. 137-138). While it is argued that this legislative attempt is primarily a protectionist measure, it has impacted on the games released in China.

More relevant, perhaps, is the anti-addiction mechanism deployed in China, in which a player who spends more than three hours online in a game in one day is limited in their ability to continue playing; a policy that was originally targeted at all players, though it was eventually restricted to players under the age of 18. Hsu, Wen & Wu (2009) note that this system will result in “the users’ game character [losing] power and experience points after a certain amount of game play” (p. 991)

While we have not yet seen a move towards this type of regulation in Western countries, as Purewal (2012b) argues, it is likely that as more issues arise and receive media attention, governments will take an increasing interest in regulating such spaces.

102

Arbitration Over the past two years, it has been recognised that, given the push for regulation from other venues, consideration must be given to a system for online environments. Here, again, I intend to outline two examples: a system mirroring the Court for Arbitration of Sport, proposed by Reynolds & de Zwart (2011); and the system implemented by the gaming environment “League of Legends”.

Reynolds & de Zwart argue that “online games have been framed in terms of intellectual property and contract, which has served to exclude competing discourse about what is at stake (Reynolds 2009) particularly where conflicts arise”, and note that others “have long challenged the legitimacy of this view of online games as mere contract and intellectual property and an increasing number of legal actions and court rulings are further problematizing it” (p. 1). They highlight key areas for dispute around “Accounts / Characters / Avatars; Virtual Items; and Virtual Currency” (p.2) and discuss the typology of a dispute and publishers reliance on End User License Agreements and Intellectual Property protections.

They continue to outline cross-boundary disputes, which “have given rise to a rash of threats of legal action, a number of cases (both criminal and civil), several statutory changes specially addressing online gaming, and a number of other forms of regulatory action”, including disputes surrounding Real Money Transactions (RMT), theft and other categories such as harassment (p. 3-5), and note the problem of “conflicting and potentially inconsistent views of how they should be treated [,] complicated further by the international nature of online games particularly where people from a range of countries are playing in the same online space”.

This range of users, they note, “could prove to be increasingly difficult for publishers to manage should there be an increase in conflicts brought before the courts – which we predict will be the case” (p. 5). They cite the example of theft & Chinese duty of care cases which “suggest that virtual items have a value that is not merely that of the publishers’ intellectual property”, noting that a “policy maker or regulator might view this state of affairs and conclude that virtual items and especially virtual currency are so akin to e-money that they demand an equal level of protection and due diligence on behalf of the publisher” (p. 5).

In short, Reynolds & de Zwart predict “that a number of things are likely to occur in the short term: Increased theft of virtual items; Increased third party sales of virtual items and related crimes e.g. credit card fraud; More players will seek legal remedies for publisher acts that they do not agree with; More judgments will be found in favour of players overturning EULA and copyright primacy; and, Policy makers and regulators will increasingly focus on the virtual items and currency – probably

103 creating regulations that inadvertently harm at least one sector of the industry, thereby also harming citizens that enjoy participating in that sector” (p. 6)

The solution they propose is one which would mirror the governance of sport, noting that “the law accommodates the cultural values embodied within sport” and that “when cases do go to court they are judged contextually i.e. a court does not ask – did the rugby player hit the other player (as of course they did, they do all the time) but rather did they do so with intent and in a manner that is outside what would be reasonably expected given the context and rules of the sport” (p. 6). In this, it is possible to see strong parallels to the ‘magic circle’ concept discussed previously in this chapter and Chapter 2; and this is perhaps the one application where the concept serves a useful purpose. Reynolds and de Zwart note that what is key “is that all parties recognize both the centrality of game derived meaning, value and harms; and, recognize how the limits of those values are negotiated” (p. 7).

Figure 3: ODAB - via the Virtual Policy Network

104

They thus suggest a “putative governance body the: Online Dispute Arbitration board, henceforth ODAB”, or alternatively an Ombudsman (Online Dispute Ombudsman ODO), “that could exist on a publisher-by-publisher basis” (p. 8). They argue that such a body would “site between players, publishers and national / international law”, with “issues that arise while having some online game specifics tend to be of a generic nature relating to the application of the publisher’s own rules”, meaning that “ODAB would be of most benefit sitting across a set online games that accept it’s governance”, and state the mission of the board as follows (p. 8):

To resolve the disputes that are referred to them through ordinary arbitration;

To resolve through the appeals arbitration procedure disputes concerning the decisions of publishers, associations or other online game / social network related bodies, insofar as the statutes or regulations of the said online game / social network bodies or a specific agreement so provide.

The scope of such a body is defined as including “appeals against bans from games / social networks; exclusion from virtual items be this through: ban; removal of items through means outside the rules of the game e.g. hacking; or publisher error e.g. accidental deletion. The scope of ODAB would exclude: Changes to game mechanics such as: nerfing; User vs. User disputes; and, User vs. Group e.g. Guild disputes”. They note that they included Social Networks in the definition “as it seems that many of the same issues and disputes and modes of resolution that apply to in-game items, especially those in games based within social networks, apply equally to access to the network itself” (p. 8)

This is followed by a list of specifications, which I do not intend to detail. It suffices to say that the authors foresee such a body as having a contractual relationship with publishers and/or trade bodies, feature both publishers and players of as-yet undefined quantities and roles, and would potentially be “cheaper” and “better” than current solutions, while reducing the “regulatory burden” and “regulatory peril” (p. 9). Moreover, they note that such a panel may face problems such as insufficient volume (to make the body financially efficient), would be subject to ‘griefing’ (to which they recommend that “publisher’s dispute systems are fully exhausted before the arbitration body is evoked”), that it may be difficult to have publishers sign on and that there may be a lack of player representation if the body is publisher funded (p. 9-10).

Such a system shares many similarities with IBAS (Independent Betting Arbitration Service) that operates in the gambling industry, which is discussed in more detail in Chapter 6. As will become

105 apparent in the discussion of cases handled by IBAS, my primary reservations with such a model are the speed at which cases are handled (IBAS claim an average of 26 days), and the lack of transparency with regard to their rulings. The 2012 IBAS Annual Report states that of 4170 requests for arbitration, 2910 were referred to the panel, suggesting a substantial workload; with these numbers being a substantial increase over the 2005-2011 period, which ranged between 2607 and 3087 requests, and 1674 and 2373 referrals. The chart below, showing the IBAS arbitration process, highlights the steps taken in conducting such arbitration:

What is not evident in the report, nor otherwise made available from IBAS, are the details of the cases they handled, beyond a number of specific examples cited in the press, their annual report, or examples included on their website. While IBAS undoubtedly provide a valuable service to the gambling industry, whether such a service is applicable to the type of disputes seen in contemporary online environments remains unclear, and in such environments, the lack of near-total lack of transparency will be particularly counter-intuitive to participants.

Of course, such a system does not necessarily have to operate identically to IBAS, and indeed there are many similarities with the Tribunal System operated by League of Legends.

Tribunal System In May 2011 the online environment “League of Legends” launched a tribunal service. When a player logs in to the tribunal system, they are assigned a case featuring another player who has been reported for committing offences on multiple occasions. The reviewing participant is provided with chat logs, statistics and the report details, and asked to vote whether the player should be punished

106 or pardoned – they also have the right to abstain. In order to participate in the system, the player must be at least level 20, and each individual participant can review up to 15 cases per day. If a participant votes with the majority on a case, they receive influence points, while if they continually vote against the majority; they lose access to the tribunal. The system then seems designed to re- enforce the norms, with those who feel a rule is not worthy of sanction slowly being filtered out of the voting population.

On May 25, 2012, Riot released metrics on the tribunal system, noting that 47 million votes had been cast, with 51% resulting in a guilty verdict (of which 5.7% received a permanent ban). 50% of players warned by the tribunal have not subsequently had another case brought before the tribunal. A previous set of metrics, published on December 21, 2011, noted that 1.4% of all players had been punished by the tutorial, “94% of players who receive enough reports to face the tribunal are punished by their peers”, a player generally required 11 reports to face the tribunal and 24% of offenders were on the winning team (as opposed to 76% who lost).

While such a system at first glance appears to be a smart way to reduce the workload on customer service staff, there are a number of concerns. The first of these regards privacy; Riot note that the chat log from sessions in which a player is reported is made available to others to view – this would not just contain information belonging to the offending user but potentially anybody else within the play session. They do state (Riot, 2012) that if “you have chosen to only play with your friends and are not playing with any strangers on your team [...] then any chat text that is submitted on team chat (as opposed to public game chat [...]) will be redacted from the chat log”, and the terms do make this clear, I would still query whether opening such information up to the player base at large is reasonable.

Secondly, the mechanic only provides resolution for a range of offences that are generally committed against other players, namely: “explicit use of hate terms, racial slurs, cultural epithets, etc.; players who deliberately and viciously insult other players; repeatedly negative, nonconstructive attitudes; players whose teasing crosses the line, and who persist after being asked repeatedly to stop; deliberately disruptive gameplay, such as intentional feeding or otherwise assisting the enemy team; offensive summoner names”. Crucially missing from such a list is any of the big-topic issues highlighted by Reynolds & de Zwart (2011), any disputes between participants and the environment itself (such as banning accounts) and anything involving real world assets beyond reputation.

107

For that reason, I would question whether the mechanic is extendable. Sharing such logs within Eve Online, for example, is unlikely to be accepted by the community due to the paranoid nature of participants – as explored in Chapter 3 – and similarly the type of dispute that arises in League of Legends is perhaps more akin to the type we would see in a competitive first person shooter than in the majority of contemporary online environments.

While the League of Legends case study provides an interesting example of a software based solution, it is unlikely to be the solution to the wider problem of governance of these spaces. As the examples above illustrate, a number of different mechanisms have been deployed, with limited success and possibility for wider application. Of these, the most broad facing is the ODAB proposed by Reynolds & de Zwart, in which, as I note above, there remain some limitations, and some queries over the remit such a body would have. Through Chapters 6 through 8, I highlight a system deployed in the offshore gambling industry to resolve disputes, detail a range of issues which have arisen in one such contemporary online environment, Eve Online, and then finally consider what a body based on the offshore gambling model may look like in online environments – in doing so I shall consider aspects of a number of the proposals outlined above.

Devolved Power While it is possible to make the case that the CSM in Eve Online is a form of devolving regulatory power to the participants, it is – as highlighted above – a system operating under very constrained mechanisms. While it gives the players a role at the design table, and an official stakeholder status within the environment, the power given to players pales in comparison to that of environments such as LambdaMOO and A Tale in the Desert.

It is interesting to note that despite A Tale in the Desert offering such a degree of freedom in the contemporary market, it is not a dominant MMO in the marketplace. This could of course be a question of design (i.e., the game’s environment and technical implementation does not have mass market appeal), however, in the light of Doctorow’s “World of Democracycraft” ideal, it may also be, in part, that players do not desire such a degree of freedom in the environments they play. To establish this, it is worth considering how both LambdaMOO and A Tale in the Desert have implemented this form of devolved power.

In 1993, following a range of time-consuming disputes, Pavel Curtis, the creator of LambdaMOO, devolved power to the environments participants. Mnookin (1996) details the process, and describes the result as “a petition system, a process through which the players in LambdaMOO could enact legislation for themselves”. Within this petition system, the participants could propose virtually any change to the environment they desired, which would then be discussed and voted on by other

108 participants. Prior to the voting stage, the game developers and managers (“wizards”) would vet the petitions according to a set criteria; key amongst which was a term stating that the change is “not likely to bring the wizards or Xerox (who hosted the world) into conflict with real-world laws or regulations”. Additionally, a dispute resolution system existed, operated by experienced participants, and described as akin to arbitration, with remedies specified as “almost any action within the MOO”.

Curtis (2001) detailed the process of creating and operating LambdaMOO, including the process of establishing the community principles (p. 33):

Frand approached me one day to complain that several of his objects had been moved about by other players without his permission; he asked me to find a way to let all the new players know what was considered acceptable and unacceptable behaviour on LambdaMOO. The idea seemed pretty daunting to me, but he had a good point, so I wandered all over the MOO asking old-timers (those who had been around since the good ol’ days of October and November) for examples of unwritten rules that ought to get writ. After a few days, I wrote the first draft of the ‘help manners’ text that for a long time was the only written “law” that LambdaMOO had.

He continues to detail how discretions evolved over time, noting that he “started telling stories to my friends about this weird place I had accidentally created, where all these seemingly normal people did such extraordinary things and behaved in such interesting and unusual ways” (p. 33), how that led into a conference presentation and eventually his lab manager suggesting he “should consider going into ‘this MUD stuff’ full time!”

While Curtis’s account is a truly fascinating account of the way norms, rules and play styles evolved in LambdaMOO (including the player who said “that it really, truly was not his fault, be he seemed to suddenly be a !” – and was, only for it to prove to be an April Fools’ joke), it is not relevant to quote it all here. He details the creation of the regulatory board (ARB) to “move this quota-judgment task off all of our plates”, and the suspicion that created, and eventually the abdication, which he notes “in hindsight [...] forced a transition in LambdaMOO government, from wizardocracy to anarchy” (p. 38), and the ‘Rape in Cyberspace’ incident recounted by Dibbell (1998) which led to the “move from anarchy to democracy” (p. 39).

The experience of this democracy is worth noting, and observing (p. 40):

“Overall, though, the petition system has failed on LambdaMOO. It has failed to be the jumping off point I hoped for; we have not seen it used successfully to move LambdaMOO to

109

a working, stable form of government. There were long periods, indeed, when many petitions reached ballot stage and failed to pass; it seems to me now that the voting population could never agree on any measures of real substance. This is the real lesson of LambdaMOO’s experience with direct democracy. In a representative democracy, politicians get together behind closed doors and make deals; they compromise in order to make progress. Direct democracy, though, leaves no room for this pliancy; direct democracy is intrinsically rule, and mobs are organizationally incapable of compromise. On LambdaMOO, this incapacity engendered a profound stagnation, true progress is impossible to achieve in the petition system.”

Ultimately, then, Curtis decided that, in fact, the code of LambdaMOO was the law and that the environments’ participants still considered the administrators of the environment as omnipotent. Lastowka & Hunter (2003) quote Curtis as stating that the gods “would not and could not fully submit to the will of the community” (p. 78). As a result, LambdaMOO returned to the traditional modus operandi: being ruled by the administrators.

A more recent, and oft-cited, example of self-governance in virtual worlds is “A Tale in the Desert”. This environment, set in ancient Egypt, focuses on the social and economic aspects of the environment, as opposed to the raiding, levelling and killing found in titles such as World of Warcraft. The environment is cyclical, with the world refreshing (described in the lore as “tellings”) at undefined intervals. Within each of the game cycles, participants are able to propose and vote on laws and request the addition of features. While laws are implemented following a successful vote from the players, feature requests are sent to developers for evaluation. A Tale in the Desert defines a law by determining whether it is something “that real-world governments cannot do. If the petition asks to do something that a real-world government could not do, then it is not a law, it is a feature request”.

This is not really self-governance as seen in the LambdaMOO example, but rather is what Bartle (2006b) argues is standard for virtual worlds; that players create “their own rules within the constraints of the virtual world’s physics and the real world’s laws”. In this case, the developers of A Tale in the Desert have told participants in which ways they are able to change the environment, while retaining a veto over those changes put forward by the players.

4.7 The Core Issues Remain Having considered the range of mechanisms above, it is clear that none, other than perhaps no regulation at all, has really gained traction within the industry. While no regulation is understandably

110 popular with developers, it is problematic for environment participants, and with the trend towards regulation it is unlikely to be the long-term future of the industry. Similarly, while self-regulation has been successful for single-player games, the applicability of current methodologies to virtual environments has been acknowledged as problematic, and developers have thus far been unwilling to sign a code of conduct akin to that proposed by Koster.

The self-regulation and devolved power examples demonstrate that both designers and the world do not want, or perhaps are not ready for, direct democracy, and it is not my intention to suggest otherwise. Many participants interact with these types of environments as a recreational activity, and involving all or some portion of them in the design process, and within dispute resolution, may prove too much of a commitment, and may not, in any case be representative. However, when they are personally involved in a dispute, they should have a better solution than to file a case in a court that may be located on the other side of the world, for that is also likely too much commitment for the financial and social stakes involved.

Towards resolving the issues Regardless of what system a virtual world uses to enforce both its norms and terms of service, though, there is a public interest in ensuring firstly that the rules are conscionable and, secondly, that they are enforced uniformly. It is apparent that there exists a gap in the contemporary regulatory process between developers and game-masters being able to implement whatever designs, changes or sanctions they want, regardless of the impact on participants, and players’ ability and willingness to challenge these decisions with the legal remedies currently open to them.

The issues identified in this chapter are common to many virtual environments. Chapter 6 will place these in the context of Eve Online, a contemporary science fiction based MMORPG, and will provide specific examples of the types of disputes that have arisen in that environment; their causes – both in terms of game design and community norms, and resolutions which emerged from both the developers, CCP, and the community. In doing so, I return to the discussion of norms, and consider how this framework enables us to understand the development of community practices, as well as highlighting the importance of the community for regulation of the environment.

Identifying the issues, their causes and resolutions, is only the first stage of the process of developing a more widely applicable regulatory model. This chapter has identified the types of disputes that arise and the range of systems proposed to resolve them. However, just as I have identified conditions in which those regulatory systems are problematic, it is important to understand the conditions that need to exist for any system to be successful.

111

My hypothesis is that the participant-driven system that has operated for over a decade in the offshore gambling industry is one worthy of consideration in the context of contemporary virtual environments. As I will describe in Chapter 6, the evolution of issues in contemporary online environments such as Eve Online closely mirrors those that arose in the development of the offshore gambling industry. To that end, Chapter 6 will outline the conditions which led to the success of participant-driven regulation in the offshore gambling industry, the way in which the system evolved and the pitfalls which it faced during that development. Chapter 7 will test the existence of those conditions in the context of Eve Online, but also in online environments more generally.

5. Eve Online

Throughout Chapters 2 and 4, a number of issues in the broader gaming industry have been considered. This chapter details disputes that have arisen within Eve Online, the acts and motivations of the participants and the company itself, and the mechanisms that arose to resolve these disputes. In doing so, it establishes the conditions that are present in Eve Online, which will ultimately be considered in relation to those identified in the offshore gambling industry in Chapter 6.

This chapter will contextualise these issues within Eve Online, with a focus on the norms surrounding botting (the use of computer software to automate tasks within an environment, which many would call cheating) and real money trading; discussing the actions, the players who do it, their motivations, and the response from the community and the publisher, CCP. Eve Online was chosen as the case study, as detailed in Chapter 3, precisely because it was one of the more difficult environments in which to explore regulatory approaches, given the general anything-goes attitude of the developer and community. However, as I will detail, the development of community norms and their codification by the developer is still prevalent.

Secondly, I will discuss the democratic process within Eve, manifested through the Council for Stellar Management (CSM). In doing so, I will build on the implementation discussed in the CCP White Paper, and summarised in Chapter 4, by highlighting a number of issues that have arisen with the process, specifically the apparent disenfranchisement of Eve Online voters in the most recent CSM, by power blocks and by the removal of the CSM chairman for actions at Eve Online Fanfest.

In doing so, I return to the discussion in Chapter 4 regarding alternative regulatory mechanisms, and demonstrate the need for an alternative mechanism between existing customer service

112 departments and legal mechanisms, and the limited applicability of providing players with democratic representation to provide this. Ultimately, the examples detailed in this chapter, along with those in Chapter 4, will be used to demonstrate the similarity between the conditions identified in Chapter 6 for regulation and dispute resolution in the offshore gambling industry and those present in contemporary online environments.

5.1 A re-introduction to Eve Online While I refer the reader to Chapter 3 for a more detailed introduction to the environment of Eve Online, it is worthwhile restating briefly some of the fundamental aspects on which this analysis is based. Subjects such as the geographic regions of the game, chat functions and so forth were described in Chapter 3, and I refer the reader to that previous discussion.

Eve Online is a science fiction themed massively multiplayer game. Amongst its primary appeal is a hands-off governance structure in which fraud and scamming is as equally a valid approach to the game as tasks such as mission running (equivalent to completing quests in traditional MMORPGs, ship-to-ship combat (P v P) or mining resources from planets. Among the many examples of in-game fraud are: a player-created bank, the ‘Eve Investment Bank’ (Adrian, 2010, pp. 192-194), which disappeared with 700 billion ISK (the in-game currency), valued (today) at approximately AU$126,600; and one major in-game alliance (Goonfleet) infiltrating another (Band of Brothers), obtaining powerful roles within the alliance and using them to disband it.

It is an environment in which the operator, CCP, which actively tries to defeat real money trading (yet still has a black market), but actively supports the use of real money to further your in-game progress through the purchase and sale of PLEX (Pilot License Extensions), which the player buys using real money and can then either be used to purchase 30-days of game time or can be sold for in-game currency.

Another frequently cited concern amongst the community is the role of developers within in-game alliances and corporations. This has caused community consternation, with one notable example being the case where a CCP developer, t20, was a member of the alliance “Band of Brothers” (Blancato, 2007). The developer, on being outed by an ‘alt’ (a second account held by an existing player, often used to avoid consequences of an action / public statement) and being forced to leave the alliance, was widely reported as giving blueprints to produce expensive in-game items and continuing to support the alliance. Escapist magazine reported at the time:

BoB directors knew that that character was a dev, BoB directors put this dev character in charge of their entire capital ship fleet, and when the dev was "outed" by an alt

113

and had to leave BoB - left them a series of T2 blueprints worth the equivalent of $1,000- 2,000 in real money and told them that they could stay in touch with him through various other methods of communication, like IRC. Kugutsumen documented all this largely with posts from BoB director and public forums, private communications between directors or directors and eBayers, email addresses from BoB forum applicants (such as the infamous [email protected] address, which belongs to t20), and IP addresses traced back to the CCP offices in Iceland.

Similar concerns have been reported within the Eve player representative body, the CSM. The process of voting has allowed alliances to elect members to the committee through sheer force of numbers – and such members, once on the committee, are privy to information not yet available to the wider community. Although their activities are monitored to ensure they are not profiting from that information, they have still caused community discomfort. In this case, CSM members (and Eve developers) are subject to a non-disclosure agreement preventing the disclosure of discussions at the meetings, with certain information being made available via subsequent (edited, and approved, by both parties) minutes.

Similar non-disclosure issues arise around security risks (such as the use of bots within Eve Online), financial disclosure (the non-publishing of IBAS decisions) and other issues, and such an NDA is an example of a confrontation between commercial confidence and transparency, and, as I argue subsequently, is a major potential stumbling block to the implementation of self-regulation methods.

5.2 Mining The specific accounts and analysis below refer to botting & real money trading. These are an element usually found in mining operations, though as WoWGlider demonstrated, they could potentially be adapted to mission running as well. Mining, in Eve Online, is the process of fitting out your ship with relevant equipment, scanning for asteroid belts (or finding one freely offered through the game client), approaching, and then using mining lasers on the ship to recover minerals from the asteroid. The process of recovery may take several cycles of the mining laser or strip miner, each of which lasts a predetermined period of time (60 seconds in the case of mining lasers), and each of which must be initiated manually. A large ship can hold resources obtained through many cycles of the laser, and so this becomes a repetitive and tedious process. Alternatively, mining drones can be used, and these return automatically, though recovering a lower volume than the lasers or strip miners.

114

This, then, seems a prime mechanic for automation. In high security space, such missions are relatively safe. In lower security space – where the more valuable resources are located – both manual and automated miners are, by nature of the ship fittings required for mining, helpless against potential attackers and are reliant on ship scanners and observing the ‘local’ chat room for signs of attackers. Here, automation also provides somewhat of an advantage, with automated running of the ship scanners and monitoring of the local chat enabling the botting scripts to cease their activities and return to dock as soon as somebody enters the area. By doing so, they minimise losses, but they also lose revenue. This ultimately proved to be a weakness, with players taking vigilante action by merely having to idle in a system to stop the automated miners.

Hulkageddon is the one time these players are at risk in high security space. Hulkageddon is a player- led campaign in which players in high security space ‘suicide gank’ hulks – one of the large mining ships. ‘Suicide ganking’ refers the process of attacking another ship in the full knowledge that the mechanics of the environment will have the CCP police (CONCORD) destroy your ship. During Hulkageddon, however, Goonswarm – one of the major in-game alliances – reimburses all players who ‘suicide gank’ a hulk.

The net result of this is a large decrease in mining, particularly in high-sec, as seen in the graphic below (the blue line represents high security space – the large drop resulted from downtime to implement a game patch). In mid-2012, Mittani, a former chairman of the CSM and leader of Goonswarm, announced a permanent Hulkageddon, though a rebalancing of the mining ships in Inferno 1.2 (August 2012) caused this to end, as it became more difficult to destroy the mining ships before the attacker was killed by CONCORD.

115

Figure 4: EVE Mined Volume (Jan 2012 – May 2012). Image (c) CCP Games

CCP, the developers of Eve Online, offer the possibility of transferring real money to in-game currency through a mechanism known as PLEX. PLEX, or Pilot License Extension, can be cashed in for 30 days of game time, or sold on the free market to other players for the current equivalent in ISK (as of the time of writing, around 300 million ISK). The purchaser of the PLEX then has the same options: to cash it in for 30 days of game time, to hold it, or to sell it to another player.

In August 2008, a player undocked from a station in Jita, the central trade hub of the Eve economy, carrying 74 PLEX in a ship known as a Kestrel, a ship fitted with missiles and featuring a large cargo space, often used as a transport ship in high security space. Two players, Slickdog and Viktor Vegas, scanned the players Kestrel and, noticing that it contained the PLEX, destroyed the ship. When ships are destroyed in Eve, there is a percentage chance (akin to drop rates in traditional MMORPGs) that each given item survives. In this instance, all 74 PLEX were destroyed – valued at 22 billion ISK, or approximately $1,295 in US currency. This is equivalent to 2200 days of game time, paid for by players, which can now never be redeemed, resulting in a clear net profit to CCP.

While CCP are happy to profit from such an arrangement, they are not happy for players to do so. Real Money Trading (RMT) is expressly banned in the Terms of Service of the environment, meaning that while it is possible to put real money into the environment using CCP sanctioned methods, it is not possible to take real money out after a play session, at least legitimately.

Finally, for context, it is worth considering the growth of Eve Online over the past 10 years. The below chart, from MMOGdata.com, shows Eve’s growth from less than 50k subscriptions in 2004, to

116 over 350k in 2012, though it is worth noting the 2011 drop, which can be attributed to the “Greed is Good” protests described subsequently.

Figure 2: http://users.telenet.be/mmodata/Charts/Subs-2.png

This is particularly interesting in the context of Ostrom’s (2008) observations regarding small communities being able to be governed by norms that are self-enforced but growth requiring more specific rules and enforcement. As demonstrated below, enforcement in Eve Online has lagged behind the norms, and one case for that would be that the growth of the environment has led from a change to participants acting for the good of the environment to more participants trying to seek personal advantage through testing the norms and rules.

5.3 Cheating Norms Between 2010 and 2012, Eve saw an increase in the proliferation of botting and real money trading. While this was brought about through a number of factors, described in some depth below, it provides an example of competing norms in two senses: firstly, between two different groups of players and, secondly, between one of those groups and the company itself, with each of the three parties attempting to achieve different objectives.

The majority of the players and the company ultimately sought some form of harmonious existence, while the third group were motivated by real world profit, with the continued availability of that

117 profit, at least in part, reliant on the continued operation of the environment. To examine those norms I, firstly, consider that final group and their motivations before considering the community norms that sprung up to resolve this, and then, finally, the (re-) codification of those norms and its enforcement by the publisher, CCP.

The ‘Cheats’ I place cheats in quotes above without judgment, and because it was the terminology of the community. As explored in Chapters 4 and 5, I feel there is at least some debate as to whether this behaviour should be considered ‘cheating’ or ‘advantage play’, at least for the period when rules against it were not being actively enforced by the developer (and, possibly, for some undefined period after that where it became clear such rules were valid).

Similarly to the attitudes expressed by advantage players in the gambling industry, which I will discuss in Chapter 6, a poster on the Eve Online blog Eve News 24, Montoya (2011), recollects the following:

Back in the day I signed up for a StarCraft clan, mostly to be able to consistently find decent people to play with (rather than the random idiots that Battle.net would set me up with). After playing a clan practice match (3v3) I watched the replay and saw one Zerg player (the clan “leader”) 6-pool and ling rush direct to an opponent’s (one of my team mates) base. The thing was that none of the players had scouted anything at this stage so he was clearly using a map hack.

I confronted him about it with undeniable proof, and his response was “So? Everybody does it. If we don’t cheat we can’t be competitive against others who cheat. I do it in the best interest of my clan”. My response was to point out that if you can’t win unless you cheat, then you aren’t good enough to win. Funnily enough I no longer played with that group.

This is why it is so important to ensure that the rules of the game are upheld. If one player gets an apparent advantage from violating the rules of the game without enforcement, it makes other players feel that they have to violate the rules of the game in order to compete. At that point the game may as well not have any rules.

Koster (n.d.), in a list of “laws of online world design”, collected from a range of authors on the MUD-Dev mailing list, offers two contributions from Caliban Tiresias Darklock. Darklock’s first law states (abridged):

118

Cheating is an apparently advantageous violation of player assumptions about the game. When those assumptions are satisfied, all apparently advantageous methods are fair. When they are violated, no apparently advantageous methods are fair.

Defining ‘player assumptions’ is of course a case of understanding the norms developed within the environment, most likely as a result of negotiation between, and among, users and developers. This serves to highlight the importance of establishing these norms, or “player assumptions” for each environment.

Darklock’s second law argues that:

Any violation of player assumptions is bad. “This follows from the first law because allowing violation of player assumptions is — pathologically — a unilateral ‘license to cheat’. When you license any player to violate the assumptions of others, you imply a right for ALL players to violate the assumptions of others, and they will attempt to do so in an apparently advantageous fashion. This turns your player base into a society of cheaters, under the umbrella of truths we hold to be self-evident”.

Here, there are some problematic conclusions. It is likely that any environment will have different groups of players with different norms. Almost certainly some norms from one group will violate those of another, and it is these tensions that I consider, for any approach to regulation or dispute resolution will be required to negotiate them and to establish a set of principles that can be enforced for the good of the players, the developers and, indeed, the environment.

With both this and the design literature considered in Chapters 2 and 4, it seems fair to conclude that rules change, brought about through players discovering unbalance, using software tools which give a portion of the user-base an unfair advantage and the discovery of loopholes, amid a myriad of other causes. What many of these have in common, however, are players manipulating systems in a way that some would consider cheating.

Referring back to Ostrom (2008), this would seem to be evidence of the conflict over interpretation that she discusses. When designers and academics put such arguments forward, it is reasonable to suggest they may also arise within the player base. If a specific action is not in breach of the terms and conditions, or not being enforced, it is reasonable for players to question the interpretation of the rule. In essence, by failing to take enforcement action against players breaching the terms and conditions, or not including a prohibited activity in the terms and conditions, developers must take responsibility for the increased prevalence of such activity within an environment. Additionally, terms must be clear. If a rule bans other programs from interfacing with an application, it needs to

119 be clear whether this rule also applies to, for example, keyboard macros, which would be said to just be automating the process a player would otherwise conduct. A failure to codify clear rules weakens established community norms, and makes enforcement challenging.

One takeaway from this, and a factor highlighted by Ostrom when considering self-governance, is that rules must be written, and refined, in such a way that their interpretation is not up for debate, as to do otherwise is to weaken the impact of the rule (or norm). This does not exclude the evolution of rules over a period of time, as norms and rules are both frequently in a state of flux, responding to developments with all stakeholders. As seen in the gambling industry, and described in Chapter 6, it is sometimes difficult to define everything, and indeed the borders between cheating and advantage play are malleable. At any given moment in time, though, there must exist a set of rules against which actions can be measured, and against which enforcement actions are taken. The enforcement of unwritten rules is likely to problematize relations between operator and participants.

Koster (n.d.) also includes a rule stating that “No matter what you do, someone is going to automate the process of playing your world, and that “Looking at what parts of your game players tend to automate is a good way to determine which parts of the game are tedious and/or not fun.” Such factors are worthy of consideration as I move forward to consider Eve Online.

5.4 ‘The Cheats’: In Eve Online There has been much discussion in the Eve Online community on the subject of automation as a form of cheating. During 2011, the player-operated blog Eve News 24 published a series of exposés on large-scale botting operations, as well as companies operating large-scale real money trading within the Eve Online Environment.

While real money trading is problematic, and through my involvement with the environment it became apparent a community norm existed against the activity, it is an activity from which other participants do not see a direct impact. By contrast, botting actively removes resources from the environment that other players could obtain, and allows those partaking in the activity to quickly accrue more resources than other players, and Eve is ultimately a game about controlling resources.

Thus, when Eve News 24 exposed a large real money trading operation, IskBank, in Eve, the focus of a large section of the community was on how they acquired the resources they sold. In theory, the proprietors of the site, and their contacts, could have manually participated in the environment themselves or hired people to do so, in the fashion of traditional ‘’ operations frequently discussed in the context of World of Warcraft. Experience of the environment, though, led to the conclusion that it would be extremely difficult for IskBank to acquire the currency at the

120 rate they did, and indeed, in an interview with Eve News 24 Vadim, proprietor of IskBank admitted using botters (‘Lapham’, 2011).

Botters (or automated play) takes a number of forms in Eve, from mining operators (the extraction of resources from asteroids or moons, normally in a chained fashion repeated daily after the resources reset), to belt combat bots (travelling from system to system, again through a chained path, killing drones and AI agents, collecting dropped resources and possibly salvaging the wreckage of the ship) and market bots (often working in conjunction with the others, these monitor markets and undercut genuine player offers by 0.01 ISK, guaranteeing the best price for resources acquired).

All of these, and indeed all forms of automation, are in breach of CCP’s terms of service. CCP Spitfire (2011), writing on the Eve forums in January 2011 commented “Any means to automate the gameplay in EVE Online directly violate our terms of service, and (regardless of what someone might have told you) such behaviour is not tolerated.” and CCP developer Pollux (2011), in an August 2011 developer blog, commented “One particular type of cheating that the ESTF has been focusing its attention on is programs that automate EVE's gameplay on behalf of a player, or bots. In the past months of our war against the bots, we have been constantly identifying and tracking players using different types of bots, enforcing our policies and giving them their time off from New Eden”.

It is then clear that CCP are, in words at least, taking a hard line on automation, while some players continue to either utilise them directly, or acquire resources from others who do. While some would certainly argue this is CCP’s decision to make, it is important to examine firstly why players are resorting to this, secondly how exactly it works (and what that can tell us about possible enforcement mechanisms), and finally the implications of such action – in terms both of design decisions and the impact on other participants.

5.5 The Why It is important, especially in terms of considering possible regulatory approaches; to understand why players act in the way they do rather than just what they do. Seen through the guise of the norms literature previously discussed, it is apparent that there is, for example, a difference between players doing something they think is allowed or they think is universal behaviour and what they know is against the rules and are hoping to get away with. Given that action should be taken in either case, it seems logical to argue that sanctions in the latter case should exceed those in the former.

In considering ‘the why’ of botting and real money trading in Eve, I utilise the stories of six individual participants within the environment. All of these players have participated in real money trading and/or botting, in breach of the Eve Terms of Service, though for different reasons. Through their

121 stories, I outline both the diversity of reasons amongst players, and the factors that the stories have in common, with the intention of understanding why players do this, how they could be encouraged (or forced, if necessary) to adapt to the community norm against such play, and whether the developers and other community members need to adapt in some way to the play styles of this group. Each of these players has offered their account in a public forum, some anonymously and some with their actual name. Where the account was given anonymously, I have assigned a name.

Fred Fred (2011) joined Eve Online in 2004, and played happily and ‘normally’ until mid-2010. Shortly thereafter, his wife gave birth to his second child, and Fred found his time in Eve Online curtailed. Around that time, a thread on the Eve forum Kugutsumen entitled “The Summer of 10 an expose on RMT” provided details on how botting and RMT operated within Eve Online. Through this discussion, the player (who had previously reported botting activity) started conversations with a player known as Horus, who gave Fred a detailed insight into how to go about botting in Eve.

Fred, who claims to have “never cheated in a game ever prior to this, not even considered it”, considered that botting was so prevalent within Eve that an “attitude wear” existed, and investigated botting. After starting to use the software, it was clear that botting was able to pay for game accounts and to enable competition at a high-level within the environment. Fred comments, “I’m pretty sure that the average user do as I do. We use bots as a mean to pay for our accounts, and to get what we need without spending hours on hours to grind for it”

In the terminology of the literature discussed in Chapter 2, this provides a prime example of what Ostrom (2008) refers to as ‘memory loss’– the failure to enforce resulting in it being forgotten by the community. Previously, rules against botting had been enforced, however due to staff re- organisation there was “a period of time where nobody had responsibility for handling the technology responsible for nuking botters” (‘CCP Sreegs’, 2012). In time, this led to the type of ‘memory loss’ outlined by Fred, and subsequent case studies within this chapter.

In the framework established by McAdams (1997), while players still had a negative attitude towards botters, and thus those participating in the activity risked the esteem of the peers, a relatively low risk of detection made this largely irrelevant. For this CCP must take responsibility, though in doing so, the actions – which were against formal rules and community norms – should not be ignored. As I will describe subsequently, player-led actions were to significantly increase the chance of detection and increased focus on the norm, which ultimately would lead to increased codification and enforcement from CCP.

122

Eric Eric (2011) is not a botter, but is a customer of IskBank who chose to pay to acquire ISK at a lower rate than available through CCP. Eric purchased thousands of US dollars of ISK after his brother allowed him to use his capital ships (amongst the most high-powered and expensive ships in the environment), and promptly lost them in battle. Eric went to purchase GTC (equivalent to two PLEX and an authorised means of acquiring in-game currency) through the IskBank website, but the IskBank representative negotiated with Eric given that quantity of currency involved.

After a period of negotiation, Eric was offered the two ships directly from IskBank in exchange for approximately $2,500, a deal he accepted because he “was in a hurry, because I felt like a dumbass”. While waiting for the ships to be ready, Eric realised he did not have a way of moving the ships from the sale location to his previous location and purchased characters for the purpose of moving the ships. Records acquired, and made public by Eve News 24, indicate that Eric made a subsequent purchase to outfit the ‘Titan’ ship purchased.

Asked about his willingness to spend such a large amount of real money, Eric commented, “This is going to sound as gay as can be, but I don’t have a lot in common with my brother, other than this game. I’ve had a successful life, all the breaks; he has had none. He was proud that he was better than me at this game and I fucked up his work, even if it is a dumb game. At the time, I panicked; I should have stuck with the GTC route and gave him the ISK. It only saved me a couple hundred dollars and some time. I’m not sure anyone relates, but it mattered to me at the time. The [supercarrier] is gone already. [My brother] lost it, like, a week later”.

This case seems to be impacted less by the norms around real money trading or botting, but rather the availability of an option to optimise play in return for money, as described previously by Taylor (2006). It is, in essence, no different to purchasing a character or a service to ‘level up’ your own character. As described previously, there is a tenuous line between advantage play and cheating, however this does seem to be an explicit breach of the rules.

It is not clear from the interview with Eric whether he had knowledge of the rules or whether he knew players viewed players buying currency or ships negatively. It is apparent that Eric was motivated dually by the possibility of saving time and the availability of such services, and may have been less likely to participate in real money trading if the consequences (confiscation of purchases) were more apparent, publicised and immediate.

123

Paul EveNews24 records show Paul (2011) to have been a regular customer of IskBank. Paul wanted to acquire ISK to pay for equipment and resources within the environment to progress his character. Subsequently, he wanted ISK to fund market speculation – either arbitrage (different prices for items in different regions of space) or predicting that a game change or other development will lead to a change in resources value, making it profitable to stockpile and then to sell items. For Paul, IskBank was simply a cheaper way to acquire ISK, commenting, “It’s simple, really. ISK is cheaper thank (sic) PLEX, and PLEX is just a legalized way of buying ISK”. Over the course of several months, Paul spent more than $1,000 on ISK. Asked if he’d been caught, he replied, “Nope. If I did [get caught], I doubt I’d continue.”

As with Eric, it seems that Paul took part in the activity because of a lack of enforcement action and/or a lack of publicly known consequences. We can see from these cases that it is not only enforcement of rules and norms that matters, but transparency in doing so; it is not enough for the developer to do something, but it must be known that they are doing it.

Angela Angela (2011) is a former World of Warcraft player. She had only recently started playing Eve when she found IskBank, commenting “There is no PLEX system in [World of Warcraft], so old habits kind of carried over. I had just started playing, so the risk was low and the reward was high. I don’t have a lot of time on this character yet, so I can always start new if I do get caught and banned”. Angela noted that it was hard for a new player to acquire ISK in the environment, and that as you became more experienced you would have more options to acquire ISK, commenting that “the longer you play, the more you risk and the reward is probably a lot less”.

While Angela had heard of the PLEX system, she commented that she didn’t understand the difference between that and the RMT sites; “I’d heard about PLEX before, but didn’t fully investigate what it was”, and noted that subsequently she had learnt about the PLEX system and the CCP penalties for engaging in RMT, commenting that “I honestly don’t think I’m going to be using 3rd party [sites] anymore. I feel more inclined to play legitimately”.

In this case we see an example of what Ostrom (2006) describes as ‘imitation’. Because, within the MMORPG community, World of Warcraft is a dominant platform, there are, inevitably, new players coming to Eve Online who have previously participated in that environment. It is reasonable for these players to carry norms from their experience with World of Warcraft over to Eve, and as Ostrom notes this is frequently the case when the other community is prominent. This would suggest that there is an increased burden on CCP to re-educate new players and make clear what is,

124 and what is not, permitted within the environment they have created, re-emphasising the importance of transparency and publication.

Mark Not all players with IskBank even successfully complete their transaction. Mark (2011), new to Eve Online, decided to purchase a character from IskBank. “I was a newb back then. I thought – because of the way it looked – that it was a legit site; like how you buy time codes”. He paid a few hundred US dollars to IskBank for a character that he did not receive and subsequently contacted CCP to complain. “[they said] that wasn’t the way to buy characters and pointed me to the Eve Online forum where you can buy characters with ISK”. Mark never did get a refund from IskBank, noting “they took my money and I didn’t get anything back from it. ISK is money anyway, when you’re a PLEX player, so I took it as another Eve scam. I thought it was a legit way to buy characters […] I can’t sue them”. Mark commented that he thought CCP did not sufficiently explain that RMT was a violation, noting that “it’s in the fine print at the start, [but] there should be something simple […] which says ‘anything bought with real money outside of Eve that isn’t a time code is illegal”.

Here, as with Angela and Paul, we are seeing the impact of the developer – CCP – weaken the impact of an existing norm. Prior to the PLEX system being introduced, a very clear community norm against real money trading existed, and players breaching the norm were subject to the repercussions of their peers (as described by in McAdams (1997) esteem theory) and enforcement by the developers. The introduction of the PLEX system led to players becoming more accustomed to real money trading, and a blurring of the boundaries between purchasing such currency from CCP or an external, unlicensed, party occurred. By introducing PLEX, CCP reduced the esteem costs of participating in real money trading.

Vadim – The proprietor Vadim, the proprietor of IskBank, argues in Lapham (2011) that RMT is “a necessary and objective part of any MMORPG. Asked, “How do you respond to players who believe that sites like Iskbank.com have a corrosive influence on Eve Online?” his first response was to express his belief that RMT is, “a necessary and objective part of any MMORPG. Let’s just imagine an average 30-year old person, who has family, kids and a job. If he does not buy for real money, he’d have to spend his time farming, which is never interesting […] RMT services help him to save his time and [to] enjoy the game and not be inferior to the red-eyed geeks that play 20 hours per day.”

He further argues that selling in-game items for real money balances the Eve economy: “Let’s imagine that all ISK is bought from CCP. In this case, the price for PLEX will be very low, as all who want to buy ISK would buy PLEX. Consequently, for $35.00, you’d only buy 100 million ISK. That

125 would not allow us to generate an income, but would also repel those who don’t want to farm and can’t buy, as the price is too high.”

Asked whether IskBank acquired their ISK to sell by hacking, a common accusation of CCP, he argued, “You cannot generate a stable supply of ISK by hacking. So it is not a professional way”, while conceding that ISK was acquired through botting, despite subsequently commenting, “botting must be punished. Those who use them – banned”, while stating “[Some] of them must exist to keep things competitive. It is just about balance.” arguing that botting, whether commercial or individual is “a matter of choice, knowledge and dedication”.

The conflict here is an interesting point of contention. Hacking, in this context, likely refers to obtaining passwords to accounts and stealing their assets, which has been a long-term accusation against real money trading providers. It seems, from Vadim’s statements, that he places the two activities in different contexts, though perhaps he sees botting as more troublesome than hacking. The conflict between his two statements on botting may be motivated by profits; a crackdown on botting which a few operators are able to survive would likely decrease the supply of ISK and increase the margins which a reseller, like Vadim, is able to achieve for providing currency to players.

Asked about the implications for IskBank customers as a result of the Eve News 24 exposé, he commented that he knows “what [CCP] usually do if a player is caught using RMT – a) get a warning b) get banned – and we’re sorry”, but that in the long-term “Nothing is going to change; neither in the industry, nor with us as ISK farmers.”

Implications Through considering why players participated in botting and real money trading, three prominent themes came to the fore.

Firstly, by introducing a software function, or rule, which contradicts an existing norm, you are going to weaken that norm. By allowing real money trading from which CCP profit, it becomes harder to maintain a position that players should not participate in real money trading outside of the CCP remit.

Secondly, players carry norms from other environments. As Ostrom suggests, where a particular community is dominant in an industry – World of Warcraft in the massively multiplayer space – you are likely to continually receive new players who are familiar with the rules and norms of that space. You may desire, but it is unlikely to be the case, that everybody who joins your environment is intricately familiar with the particular conventions in place.

126

Thirdly, and most critically, each of the above – and many other motivations – can be remedied in large part by enforcement and transparency, as the work of Carlsmith (2002) indicates. By publically taking enforcement actions against those in breach of community norms, you increase awareness amongst your player base of the norms and decrease the likelihood that others will circumvent them.

This is a key finding, and important when we come to consider regulation. A slow court process or a private arbitration – while better than nothing – does not necessarily act as a deterrent. It is important not only that you enforce, but that you are seen to enforce, rules, and it is equally important that when such enforcement is disputed, the resolution is transparent and is publicised – to the maximum extent possible – to the remainder of the community. As described in Chapter 6, there are many cases where the precise details cannot be made public, but even in such cases the resolution itself should be known to the community.

5.6 The How I have described the motivation for a number of botters, but the tools used are also important. As described by Taylor (2006), and outlined in Chapter 4, other environments such as World of Warcraft and Everquest have seen a range of tools, with some allowed to continue, others shut down, and some becoming the subject of lawsuits. Clearly there is a range of software in use, from player aids to automation and cheating. This description of the tools used by botters is intended to place those tools along this continuum.

Fred Fred (2011), the first player discussed in the prior section, considered two options for bots, both of which are easy to find information on, with significant web presence and YouTube videos detailing their use. Fred details how he “decided to try both. Evebot requires more work to get started, and you have to pay a subscription fee that equals the cost of one eve account [$14.95/month]. [Y]ou can use it for as many accounts as your computer can run. Very good hardware can run up to 12 accounts on 1 computer”. The alternative, H-Bot, “has a one time fee, either with ISK (approximately 3 Billion) or rlm [real life money], […] for each account you want to use it on.. [It] has more options for looting and is more computer newb friendly”.

Fred states that he’s “not proud of what I do at all. Its plain necessary to do it in order to play the game for me”, and questions whether CCP’s lack of enforcement action is impacted by the revenue received for running multiple accounts.

127

Fred mostly used Evebot, stating that he has “never rmt, and […] never bot without being next to my computer”, commenting that he could play normally on one computer while having Evebot running on a laptop, and also take it to the living room “and spend time with my kids and wife, and just toss a glance at the screen now and then if people talk to me in local. In that sense I ‘play’ the game. I never do it ‘afk’. There’s a lot of opinions about how much botters earn pr. hour/day [and] running 2-4 bots dont (sic) give the income near to what people think.”

He notes that he ran bots aimed at killing AI agents in asteroid belts rather than anomalies (rarer spaces with higher rewards), arguing that this gives “less risk of getting caught by bothunters and requires less attention and knowledge of scripting. I dont know anything about scripting. I run my bots in “ok” security system and each of them make about 10-15m pr. hour if you exclude faction spawns and a rare officer now and then”. Based on the current PLEX to ISK exchange rate, this equates to an income of about $0.75 an hour; not enough to make an income, but certainly enough to give you an advantage in game-play terms.

He continues to detail his methods to avoid detection, stating “I use a VPN provider, so my IP isn’t traceable, and I use different emails on my accounts in order to avoid them all getting banned. I had one account temporarily banned at 1 point, but kept going on the others. I was a bit more cautious for a while until things cooled down”. As was the case with all of these accounts, the story met with an overwhelmingly negative reaction from the Eve News 24 community, with comments such as “go play something else and fuck that game up if you want to bot, at least on those games, you're not fucking up the entire economy in your efforts to automate winning”.

Fugazii and the time before botting Fugazii (2011) describes how he moved from WoW to Eve and brought his revenue generating experience from the former to his new environment, and argues that “EVEs belts weren't as empty as remembered before botting came fully into play”, speaking from experience as the CEO of Deep Space Productions, a corporation he created that became known as the largest Chinese ISK-farming corporation in EVE.

Fugazii describes how, from the middle of 2005 through to 2006, he had largely left Eve to play World of Warcraft. While playing World of Warcraft (WoW), he was gold to sell to kill time as he waited for battleground operations to complete. At the time, he notes “WoW did not have widespread botting, and [RMT] was primarily done by Chinese players.” Through his experience grinding gold, he “became friends and somewhat of a celebrity with the Chinese crew on my server. Learning the tricks of the trade, secrets of solo instance farming, gaining friends, and most

128 importantly from that I learned basic phonetically spelled Chinese to the point of being able to hold conversations with those that didn't speak English”.

In 2007, Fugazii was back in Eve Online, as a member of an alliance called Triumvirate Mk1 and “[w]hile flying around Venal I get convo'd by a CEO of a random Venal Chinese farming corporation asking if he can speak to diplomat in Tri.”. Fugazii then scammed the Chinese farming corporation out of ISK, asking for money in exchange for standings (security status) he cannot offer. “The next day knowing I'm going to get a convo from him I'm trying to think of a way to get more ISK out of him, when it hit me. Deep Space Productions a corporation I created 3 years prior will be what he must merge into. Reluctantly he agrees and […] within the next day and a half I have 15 Chinese npc'n [killing AI agents] 23hrs a day paying both rent and 9% tax. Within 2 weeks my scheme was discovered by Tri leadership and my corporation was kicked.”

Now without his former alliance, but still with a team of Chinese farmers paying him tax, he states he was “thrown into a world of EVE that I had never payed much attention to, I went full force into what would be my dream of creating the largest Chinese farming operation in EVE. Armed with the ability to speak their native tongue, a corporation with 9% tax, and 3 accounts I went to work. With a 3 man alt fleet I roamed the North […] finding a corpless farmer and telling them your going to join my corporation and you'll have blue (safe) standings with everyone or I'm staying here and killing you the second you uncloak. I'd then leave with 2 characters and find 2 more targets to do the same, when one of them finally gave in I'd use my 3 characters to escort them to the closest office and then back to their system.”

Through his ability to speak Chinese and investment of time, he eventually built a reputation “within the farming community […] as someone who was a friend of the Chinese. Befriending managers of the different companies I was able to negotiate entire companies to join. My reputation soon spread to the South and Chinese farmers from there started traveling to empire to put in an application at my southernmost office in Yulai. Realizing this I travelled to Stain, Fountain, Curse, and Great Wildlands renting offices in nearly every travel-relevant NPC stations. Within weeks of this my corporation had gained 50 additional members that willingly joined. By Late November 2007 I had nearly every formerly corpless Chinese farmer north of Germinate and Fade in my corporation.”

He notes that he was subsequently kicked from another alliance due to his corporation including a botter who spammed the alliance one night, noting that he “promptly kicked him as I didn't allow botting in my corporation”. Between December 2007 and January 2008, the corporation met the fate of many, with groups turning on each other, with Fugazii noting that after a break, “coming back

129 to the game, my corporation was in shambles”, with it collapsing completely in late January. Deep Space Productions is now a 97 member corporation with Fugazii’s alt being the only person logged in in 3 years”.

Fugazii, writing to the Eve Community, commented “Your probably calling for my head for providing a safe haven for one of the largest groups of Chinese farmers ever assembled. I think of it differently, the way I see it is I successfully took 9% of the ISK from 160 farmers that would have otherwise been RMT'd. At the peak of my corporation 9% translated to roughly 7-8bil a week in tax, meaning 70- 80bil a week was being generated by my guys alone, staggering numbers and even more-so when considering upgraded systems didn't exist at this time. I challenge you to find any player who's done more damage to the RMT community than that”.

Manny Manny (2010) detailed his techniques on the Kugutsumen forums in late 2010. He argued that bots were “so common now that regular players have started using them for passive income. CCP has only made trivial attempts at curbing RMT or dealing with bots. Unholy Rage […] was supposed to be the curbstomping of RMT'rs. But was it? The most simple answer is NO they didn't even scratch the surface.” Manny used different programs to those described earlier, noting the use of a bot called Reboot, which “will happily shoot NPC's for you all day long. [T]his program will earn the user up to 40 million ISK per hour. All you need is a ship a quiet system and the ISK rolls in.”

He notes that unauthorised ISK sellers, such as ISKBank or Playerassist.com, offer approximately 20- 40% more ISK for the same amount of US$ as purchasing a PLEX through CCP authorised resellers. Mogs.com at the time purchased ISK, with Manny stating that “once a account is created players deposit ISK by various means which is tracked and verified by API. The player then receives his money via PayPal or other medium”. This leads Manny to claim that “a[n] average botter can make $ 2.00 USD per hour”, which he argues might not appeal to the western world, but is a substantial income for the Russians involved in this activity; “what if it played for you for 12 hours a day everyday all month? 21,600 Rubles. That’s about $700 a month. The average Russian family lives off an income of $600-700”.

Manny does note that most “Russian players are people just like most of us playing a MMO for fun. There are other groups with large RMT sections most notably Serbians.” Importantly, he does differentiate between the two activities, stating, “RMT isn't limited to botting, however botting is an easy way for a individual to get into RMT”.

130

5.7 Implications What the above highlights is firstly the low barrier of entry to botting, and secondly the lack of respect most players have for CCP’s attempts to infiltrate and shut down the botting operations. Finally, and perhaps most significantly for the continued proliferation of the activity, it is apparent that the potential return can be substantial, particularly when placed in a non-Western context.

The differentiation that Manny discuses is important, as while real money trading and botting both currently contravene the Terms of Service, automation and player aids are a very different process to real money trading. Just as RMT is not limited to botting, it is possible to bot to gain an advantage in the game, without the intention of selling those gains for real world currency. The activities, while intertwined, should be treated separately for determining rules and remedies.

As we consider the types of software used by players, discussed by Taylor (2006) in Chapter 4, it is clear that tools such as H-Bot are on the extreme end of this continuum, tools that Blizzard took legal action to prevent with World of Warcaft and that Sony banned in the case of Everquest. It is important to note that not all tools within Eve should be considered this way; tools like EVEMon and EVEHQ act merely as player aids, suggesting ways for players to optimise both their character development and the fitting of their ship. These tools are actively supported by CCP, with links to downloads available from within the Eve website. As with the cases Taylor highlighted, there is a clear differentiation within CCP between tools they sanction and those they do not.

Finally, the accounts above continue to reinforce the findings of the prior examples, and particularly the presence of imitation norms from environments such as World of Warcraft, and a lack of enforcement weakening the norm to the extent players consider botting standard behaviour within Eve. As described in Chapter 2, one of Ostrom’s (2008) key principles for self-governance to be applicable within an environment is information; that is, information provided to participants with regard to potential actions and outcomes. It certainly appears clear from these examples that the providers of allegedly illegitimate software do a better job of publicising the benefits of their tools than CCP does in publicising the consequences.

5.8 EVE vs. World of Warcraft Fugazii (2011), the player who set up a Chinese ISK-mining operation prior to the prevalence of bots within Eve, also offers an intriguing comparison with World of Warcraft, commenting that “much of the time the [ISK-mining operation] was going on in the foreground, in the background on my computer was 4 accounts of WoW being piloted by a program called WoWGlider, later renamed MMOGlider. To my left was another computer doing the same with 4 accounts”. He notes that “from

131 late 2006 to mid 2008 my job was botting WoW running 16 accounts 24hours a day 8 at a time in 8 hour staggered shifts […] To put it in perspective […] the month after Burning Crusade came out, 1k Gold fetched $80-120. A single character lv60+ grinding 8hours could break 1k/g.” By extension, then, this equates to 24 grinds per day, or approximately $2,400 per day.

At that time, in World of Warcraft, the bot population exploded, Fugazii noting that “anyone could make gaming a viable job that made more than your average job a 16-24yr old would hold and if on a big enough scale, more than salaried jobs. The amount of Chinese farmers disappeared replaced by bots being run by people from the West who just dumped their Gold to the Chinese companies who no longer had to deal with the problems of farming operations, hiring workers, maintaining accounts”.

Blizzard, as is well known and is discussed in Chapters 2 and 4, responded with first software patches designed to detect players’ usage of bots, and subsequently taking out a lawsuit against WOWGlider. During 2006 and 2008, Blizzard and the bot developers and users entered into an arms race of detection and avoidance, with Blizzard sometimes claiming to close 400,000 accounts overnight (equivalent, at the time, to the entire population of Eve).

While you might expect this to have reduced the prevalence of botting, Fugazii comments that the opposite happened:

[B]otting use skyrocketed. The reason behind this is simple, if it's your job and your losing accounts faster the way to combat this is to make more accounts to bot with to offset the shorter lifespan of said accounts. Combined with the lessening of Gold value you simply just needed more bots. The bots themselves [became] more functional. Rapidly making the bots go from simple loops and basic attacks to being able to do quests, mount and un mount when moving to new locations, talk, re-supply themselves with food and ammo, effectively PVP, log out and in whenever you wanted, go afk for X amount of time at random intervals just to name a few things. Essentially being at a point where all was needed was to create the character, click start, and come back in 70 levels”.

This is very similar to the technology being used at the time to play poker and other casino games such as blackjack, described in Chapter 6. As with the casino bots, veils had to be created to prevent accounts being closed (and, by extension, funds being forfeited). The increasing complexity of these to talk, to log in and out, and to go AFK for periods of time dramatically increased the difficulty of identifying bots in the casino environment, and the same challenges were faced by developers such as Blizzard and CCP who, we must not forget, had limited financial motivation to pursue botters

132

(paying regular account fees) in comparison to casino’s faced with losing hundreds of thousands of dollars in ill-gotten winnings.

Blizzard’s response was to attack the value of gold: “[m]aking gold so easy to make [means] the market falls out of the RMT world for the Western world players”. Fugazii contends that much of the above was replicated in Eve, through the use of H-Bot rather than WoWGlider. Fugazii claims that such players “came to EVE because unlike other games there is a hard minimum [to which] ISK can fall because CCP allows ISK to be bought in the form of GTCs” and “unlike WoW the longevity of an RMT account in EVE is so long that it's rather easy to keep their own bots running with little hassle”.

This also re-enforces my earlier conclusions with regards to CCP’s handling of these issues. Not only did CCP’s facilitation of real money trading for their own profit weaken the norm against real money trading, the design of the feature placed a hard lower limit on the value of PLEX, and thus GTC (Game Time Codes). By doing so, they removed as a possibility the strategy with which other developers had resolved this problem. Similarly, this account confirms the view that CCP have a long-term record of failing to identify and shut down accounts participating in the activity, thus reducing the operational costs of running such an enterprise.

Fugazii notes that there are “limits to what CCP can do […] Blizzard spends annually around $1m a year combating bots and RMT and manages to ban multiple times the entire EVE playerbase a year, and still hasn't won the fight. If CCP devotes the resources it would need towards actually making a difference in botting then other things are going to suffer greatly, specifically server upgrades, content patches, and bug fixes.” He continues to offer a number of other defences of botting, including the potential for a significant rise in resource cost if botters and RMTers are removed, meaning regular players who lose ships in PVP will no longer get sufficient insurance payouts to continue such activity, reducing their enjoyment. Finally, he argues, “everyone has the same access to bots. Not using one is a choice” and that botting “actually makes life easier for the average EVE player”.

5.9 The CCP Perspective CCP would, of course, have been aware of these consequences when deciding to introduce PLEX into the game, and argue that by doing so they have not legitimised real money trading. Monohan (cited in Lapham, 2011b), an intellectual property attorney specialising in video games, suggests a number of reasons that CCP may wish to prohibit real money trading, above and beyond the desires of their player base. He argues that the battle against RMT is “certainly frustrating”, noting that “[i]t’s hard enough to police players within the game, but tracking their conduct outside the game (e.g. where

133 players make their RMT purchases) is even harder”. He notes that people often argue that “game companies prohibit RMT out of greed and ban those practices because they don’t want outsiders making money on their game”, but instead contends that such desires “[play] only a small role, if any, in an anti-RMT policy. Regardless of profits, there are serious potential consequences for a game that sanctions RMT”.

Monohan offers the example of three Eve players – Superman, Batman and Robin. To the extent that all three pay their subscriptions via credit card, CCP receives $45/month. Batman, a good player, amasses a lot of ISK in game, as does Superman. Robin finds himself behind the other two, but has real life currency, so prefers to buy ISK rather than spend a month earning it within the environment.

From a revenue generation perspective, CCP desired to sell ISK to Robin, without doing so as a formal transaction and creating an expectation of real world value amongst the players and, potentially, the legal system. The solution CCP developed was to sell time in the form of PLEX. “Robin slaps down $35 for 60 days of EVE time. Instead of using that time on his own account to earn more ISK, he splits it into two PLEXs and offers them to Superman and Batman for a few hundred million ISK each. Superman and Batman add that time to their accounts, and Robin gets a leg up on the space money game. No new ISK has been created, and CCP has added nothing to the game-world. Instead, CCP has sold time in advance at a slight premium.”

As Monohan notes, the key to this system is that PLEX “is one-way. Players can buy time and trade it in game for ISK. Other players can use ISK to buy time in game. But in no circumstance does CCP allow any player to turn ISK into actual money. This distinction prevents players from asserting that their wallet balances have real value. Sure, they can use that ISK to keep playing EVE for free [...] but they have no legitimate expectation of cash”.

A formal transfer of ISK for real money would have created that expectation in “an EVE where CCP acknowledges that the exchange of ISK for real money was valid, […] every players collection of ISK […] would have a known value and be sitting in CCP’s hands. At that point, Eve Online is a virtual bank, and your wallet balance in EVE is no different from a checking account”. As Monohan argues “banks are […] strictly regulated to make sure that depositors are protected from a run on the bank. Your typical game provider, on the other hand, is not designed to keep cash on hand, nor does its business model work as a bank”.

Monohan also discusses botting, which, he notes, exists separately from RMT, arguing that “providers fight botting and macros for business reasons that are central to their operation”, namely that, while macroing and botting cause a particular set of problems to the development of games

134 such as World of Warcraft (namely players advancing ahead of the content development cycle, so unsubscribing), in Eve “botting causes other problems, especially to the economy. Botting causes inflation because it distorts the ISK faucets into the game […] with widespread ratting 23/7 [EVE servers have one hour of scheduled downtime per day]. This flood of ISK drives inflation in EVE. If CCP curtailed or eliminated botting, the inflationary pressure would drop, even if people continued to RMT.”

One respondent to the Eve News 24 investigation into botting argued that the answer was not to ban the activity, stating that “if [CCP] want to stop botting, you have to even the field. Allow scripting (with-in controlled limits set by CCP) inside the game. That bots are so prevalent is a cry from the player base for automation of extremely boring or repetitive tasks. The lack of in-game tools means that people go outside the game to products that are more complex and difficult to use, but still provide the required means to an end. If you make it simple and in-game you can control how it is used, where and when, and you prevent that mass of people going off to "bots" to do things that can be done through automation in the game. You now have a much smaller group to police, which makes detection easier.”

This offers an interesting potential solution. Perhaps through negotiation with those players who wish to optimise this element of the game, CCP could find a solution allowing those technically minded to develop tools using in-game scripting (as has been seen with environments such as Second Life, while simultaneously controlling the reach of these so that they do not gain a substantial advantage over players who are happy to take such actions manually – that is, in accordance with the Eve terms of service, perhaps automation could be allowed, but not acceleration. Given the general norm against automation, it is not at all clear whether the community as a whole would support such action.

5.10 Implications This discussion raises a number of concerns for Eve, and the wider industry. The debate over whether a provider has the right to shut down an environment is long-standing in game studies, though for social (the idea of a virtual environment being a ‘third place’ in which players have invested substantial social capital) rather than financial reasons. Were the in-game currency to have real value, this debate would become more heated. Other environments, such as Second Life, do have such an exchange, but we have yet to experience the first case where an environment with a legitimised real money exchange shuts down.

135

Secondly, it is significant that we are dealing with game developers and not financial institutions. The economy of Eve is designed to work as a game, not as a real economy. As a game the developers have the ability to increase supply or increase ISK sinks to have a desired effect on the economy and/or environment; however, as a financial institution it is questionable whether they would have those rights, or indeed whether a workable business model would even exist, as the problems experienced by Project Entropia during their attempt to become a financial institution, discussed in Chapter 3, highlight.

Monohan (in Lapham, 2011b) also highlights issues that would arise for participants in the environment, querying whether if “game items have a real value, are drops items that can be taxed? […] In a world where game items have value, game providers could be required to issue tax reports […] to make sure players were reporting their MMO income”. Monohan continues to note that when you have the ability to cash out “you are dealing in playing pieces that have a cash value [and] MMO’s start to look like casinos. The line between gaming and gambling is an important one, because gambling is illegal in many places and heavily regulated in others”.

As I will discuss in Chapter 6, there are clear similarities between the gambling industry and these online environments. The ability to cash out – in combination with the other mechanics of these environments – certainly increases the chances of an interested legislature defining such environments as pure gambling. The ability to exchange in-game currency for real money is as significant a factor in such a determination as the mechanics implemented within it.

There are also clear issues from a game design perspective. Considering the work of Koster (2006), and the contributors to the MUD-Dev mailing list that he cites, I would conclude that mining, killing of AI agents and market trading are considered by players as tedious activities, devoid of fun. Eve News 24, in discussing these, queries “[w]hy should people be made to do tedious things themselves when they could get a piece of software to do it for them while they go out shooting hostiles (“It is always more rewarding to kill other players than to kill whatever the game sets up as a target”) with another character, or sleep, or go outside”. However we define the activity, and whatever remedy may be appropriate, the situation is also worthy of consideration from a game design perspective.

5.11 Community Response Through the response to the Eve News 24 investigation, and more widely on the CCP forums, it is clear that a community norm exists against both botting and real money trading. Given the lack of enforcement action from CCP, the community took it upon itself to enforce this norm.

136

‘Riverini’ started investigating these issues following a controversy that received widespread community attention in early 2011. In his account, he describes how he trained a “cloaky Loki with a probe launcher to go hunt some bots”, and “looked at the starmap, colored the stars by population, and noticed one nearby constellation where there were 2-4 people in every system. Then, I travelled there, spamming directional scan. In each system, there were ravens named 11 and exequrors named 1111 or 1113, or sometimes 2121 or 1616. Some systems had two ravens and two exequrors, and some only had one of each. Strange, I thought. Worse, the ravens disappeared from d-scan within seconds of my arriving in the system.”

He subsequently warped to the belts to find them chained, and some with “partially looted and salvaged wrecks”, before attempting to probe one of the ships, only to find it safely docked at a POS (player owned starbase). He comments that he thought these “were surely bots, and they were impossible to catch. Just for grins, I cloaked up and just hung out 70km off of a belt. I may not be able to kill them, but at least I can deny them revenue! Then I went to the gym, had some lunch, and did a bit of shopping. When I got back several hours later, they were still safed up, and hadn’t left local.”

Riverini subsequently stepped up his operation, taking data from Dotlan (a service which provides statistical overlays onto the Eve universe map). He then “went constellation by constellation on the Eve star-map, colouring stars by system, and took a snapshot census at 08:00. This took a couple hours, but I found it more interesting and challenging than shooting at an IHUB. Then, I went to bed. The next day, I had a great breakfast, hopped back on at 21:00 [Eve Time] and took another snapshot census. I ignored constellations that were empty on the first go round, so it only took about a half an hour. I found […] most of the systems were empty. Another good chunk of systems displayed the kind of variation that suggests normal player activity […] however, several constellations had systems with the same number of players as they had 13 hours earlier.”

While there could be several logical explanations for the lack of variance, he “noticed a pattern in the systems which had the same # of players 13 hours later [and] consulted dotlan for the suspicious systems. A system with bots would display a consistent NPC kill count […] It is relatively unlikely that a human would have the patience to chain belts for 13 consecutive hours and produce a smooth, even NPC kill count with low volatility.”

From this, he had a “handful of suspicious constellations to go and visit”, noting “visiting the suspicious constellations was very similar to that of visiting the first constellation where I discovered the raven/exequror bots. In fact, that was the dominant bot type I encountered. The ravens were

137 usually named “-=-” and the exequrors were commonly named “=”, though sometimes they had the default names (Bob’s Raven) or just Raven”. He continues to describe a number of typical and atypical ship formulations in these systems, concluding that some were confirmed as bots while others were likely typical players.

He “took down the name of every bot character that I noticed. Clicking on their info, I noticed that bots in the same system would almost always belong to the same corp. Sometimes, the same corp would own all the bots in the constellation. Further, looking at the characters, almost all of them had little-to-no corp history: they joined their current corp directly from an NPC corp. Lastly, they very often all had the same character born-on date, or very close ones. For example, there would be two raven pilots created on December 20th and two exequror pilots created on January 26th […] All told, I discovered 82 toons [characters] that I was pretty certain were bots [so] that means that approximately 18% of the players online in the DRs [drone regions] were bots.”

Riverini did not stop with that information, though, adding, “all 82 bots to [his] contacts list, and watched, and waited. They’re all online, all the time. They’re online the next day, and the next day. Judging from their kill counts on Dotlan, a pair of bots can kill between 1200 and 1500 ships in 24 hours. They appear to be chaining battleships, which I’m given to understand have a loot value of around 700k a piece. That adds up to between 840 and 1,050 million isk per day, not including salvage; the tengus are probably even more efficient. One particularly industrious system (ETO-OT in The Spire) is home to four ravens and two badgers that produce 4200 kills in a 24 hour period, which is about 3 billion isk per day.” From my own approximate calculations, this is a range of 420 million to 500 per bot, equivalent to a daily profit (in real world terms) of between $21 and $25 per day, per bot. With no limit on the number of bots able to be run by an individual, I will leave it to the reader’s imagination to consider potential profits.

He passed this information to CCP, describing his methodology and his reason for believing the characters were bots (and criticising CCP’s lack of action in the process). The next day, he reports, he “logged in to find that all of the bots in Kalevala — 20 of them, were offline. The constellation they were farming was now empty of players. I went to the constellation to see the POSes that they used to store their loot and to safe up were still up, online and running, so I gather that they weren’t deleted/forfeited”.

The following day, he witnessed the login period immediately following the Eve daily downtime, reporting that his “contacts list started to light up at a seizure-inducing pace. Within three minutes of the servers coming back up, all 12 of the bots in the DA0V constellation in Cobalt edge were

138 logged in and ready to go. All 12 bots in 3TS-12, Malpais were online within twelve minutes of the servers coming up. Within 25 minutes of the server being up, 30 of the 31 bots in The Spire were online. Worst of all, 18 of the 20 bots from Kalevala were back online. From the looks of it, they received one-day bans. They are now back to producing over 12 billion isk per day”.

Riverini continued to summarise the behavioural patterns identified in the bots, while expressing surprise that “accounts can engage in a behavior pattern displaying *all* of the following characteristics while setting off precisely zero flags at CCP:

- Log in within minutes of the servers going online and remain online for 23 straight hours - Remain in the same system, in the same ship, doing the same thing the entire time - Log back in the next day after downtime and go back to doing the exact same thing in the exact same place - Always cloak or POS up within seconds of a non-blue entering local - Have ships, fittings, ship names, skills, and character born-on dates that are identical to other players in the same system and adjoining systems - Have zero corp history aside from your current corp” Further, he notes that CCP has additional data, and the ability to visit the identified systems without flying them in real-time (which he states took 2 hours of his time), stating the he “cannot fathom what makes CCP believe a one-day temporary ban of disposable [characters] is an effective deterrent. Do they imagine that this stern warning will cause the owner [to] start playing honestly with 20 two-month-old raven accounts? The mind boggles. A bot army of this size will require substantial logistics: POSes in every botted system, frequent runs by freighters or jump freighters, the tacit consent or willful blindness of at least a few senior people in major alliances, and perhaps a corresponding army of middlemen and builders. I have not observed any consequences for any of these parties.”

The region studied by Riverini is known as the DR, or ‘Drone Regions’, due to the abundance of AI agents to kill and resources to acquire. Thus it is likely that the 18% pattern identified by Riverini is not consistent across space, though Riverini argues that “given CCP does not appear to take even the most basic steps of checking up on accounts that log in 23 hours per day for several days in a row, it seems easily plausible that 3-5% are”. While the methodology and results are fascinating, the lack of action from CCP led to subsequent speculation amongst the community with respect to the norm CCP is trying to establish for botting.

139

Riverini is just one of a number of players who took it upon themselves to enforce the community norm. That action took a number of forms – players both attempting to kill botters and joining the botters in an attempt to draw additional attention to the topic. One corporation, Clan Shadow Wolf, contacted Eve News 24 to tell of their efforts in policing one particular region. While this started as a vigilante action, “they were getting so good at it, they actually convinced the botters to pay them to not roam their systems”. In response, the DRF (Drone Russian fleet, who patrol the drone regions discussed above) decided it would be cheaper to defend the bots than pay the extortion being demanded, thus causing Clan Shadow Wolf to go public with the information.

Another enforcement approach put forward by a group of players could be described as “if you can’t beat them, join them”. The stated goal of this group of players was to draw awareness to themselves rather than necessarily profiting from the action, with Riverini arguing that while “bots and Nazis are on the same page in our book […] it is our goal is to make botting so widespread CCP will see itself forced to enforce a zero tolerance policy against bots that’s not simply a […] ‘1 week ban’ or puny ‘3 strike rules’”.

The intention of the project was to “fill a quota of about 15,000 new botting characters, apart from our safe estimate of 8,000 actual botters currently active. […] In the end we would like to manage to get the current active botting population above 50% of logged in chars, right now we estimate it at 35% when the concurrent amount logged users hits it bare minimum.”

5.12 CCP Response CCP can rightly be criticised for a lack of enforcement action, and they themselves acknowledge this. Since the 2011 Las Vegas convention, they have though been seen to take more pro-active measures against both types of player. While some of these have been stated publically, we can identify others through CSM minutes and notes taken during presentations to the player-base in Las Vegas. In a developer blog, ‘CCP Pollux’ (2011) states that “the EVE Security Task Force (ESTF) has been assigned various tasks related to security issues, but one of the main tasks this team has been given was to develop new systems and tools to identify, classify and track various kind of unfair player activity.”

The blog continues to state that “[t]he goal was to simplify and improve the daily mission of hunting down those who, for one reason or another, disobey the rules of EVE and cheat. One particular type of cheating that the ESTF has been focusing its attention on is a program that automates EVE's gameplay on behalf of a player, or bots. In the past months of our war against the bots, we have been constantly identifying and tracking players using different types of bots, enforcing our policies and giving them their time off from New Eden.” This information was a precursor to the launch of

140 their ‘report a bot’ feature, which was recently added to the Eve Client as a direct way for players to report those they believe to be bots.

In doing so, they upgraded the penalties to a 14-day ban for a first offense, a 30-day ban for a second, and a permanent ban for a third offence, and offered instructions to players on how to identify bots, stating that they “[react] to events according to a predetermined limited set of rules, triggering appropriate actions in response in order to meet its goals. In a world otherwise driven by human players, most of the times this rule based behaviour can be observed under close investigation”, before offering a detailed methodology, not dissimilar to that discussed previously from the Eve News 24 investigation, to identify the bots.

Such a scheme was not, at least in Eve, an automatic success. As has been mentioned previously Eve is a paranoid and competitive environment by design, and some saw this reporting mechanism as just another way to gain an advantage over other players. CCP noted that as of the time of the blog “we have received more than 500 reports from players using this feature. While some players successfully managed to report players who were bots, some players used this feature to report players who were far from being bots. There is a difference between not being able to distinguish a bot from a human and the clear intent to report players out of any other interests”.

There are a variety of reasons why, beyond this, specific methodologies and approaches may not be shared. As seen in the gambling industry, and detailed in Chapter 6, there is a general reluctance to share approaches to detect prohibited behaviour, as doing so effectively provides a blueprint for those participants for how to avoid detection, and it ultimately leads to an arms race of the type seen with the WOWGlider case discussed previously.

5.13 Council of Stellar Management The CSM have commented little on the topic in public, partly no doubt due to non-disclosure agreements surrounding discussions taking place at the CSM summits, where recorded minutes indicate that both botting and RMT are regularly subjects of discussion. The minutes of CSM meetings, particularly when read with the public statements through developer blogs and convention presentations, do provide some of the most illuminating evidence with regard to CCP strategies.

In mid-2011, Riverini (2011) details how Mittani, who was then head of the CSM, was embroiled in an incident where he learnt that a member of his alliance had sold a titan (high-powered ship) for $900US to their main opposing alliance. In response, Mittani kicked the player from the alliance, but perhaps not for the reason one might suspect, stating “I don’t care about him RMTing, I’m not CCP’s

141 cop, the issue is that he sold it to our foes”. Like CCP previously, one must wonder, at least at that time, how much of the CCP and CSM action was paying lip service to players or constituents versus a desire to eliminate the action from the environment.

At the meeting between the CSM and CCP held just prior to the Las Vegas conference, in May 2011, it was apparent that this behaviour was a prominent topic. The minutes of the meeting come with the disclaimer that “some of the material presented was not just NDA, but "Double Secret" NDA because only a few people in CCP had been told about it”. In that meeting, CCP noted that the task force has “several dev[eloper]s on the team […] tasked at 50-100% of their time [while] the rest provide input as needed and volunteer their spare time (weekends and such).” CCP note that the “sole responsibility of the ESTF is enforcing the EVE EULA” and that “detection methodologies include (but are not limited to): behavioural (looking for activity over time that a human simply cannot perform), signatures (patterns of activity associated with particular bots) and technical detection in the client.”

CCP also discussed their enforcement strategy, described as “communicate, educate, enforce”. As we have seen previously, there is certainly a problem with new players to the environment being unaware of the rules in place regarding real money trading, and it seem this has been noted, with the task force stating that they want to make it clear what they are doing, why certain types of behaviour are bad, and to enforce compliance with the EULA. They state that the intent of their policy is “not to punish bad behaviour but to change it”, while noting that “client manipulation or hacking always results in an immediate perma[nant] ban”.

The task force has also been tasked with countering those who write and distribute the bots discussed here previously (and any others found operating), and reported that “an operation targeting a particular bot and the website that supported it achieved significant results, suggesting that additional resources should be focused in that direction”. It was also hypothesised that there could be potential solutions other than banning, with one possibility identified as “degrading or eliminating the rewards a bot receives from in-game activities”, labelled, in in-game terminology, as “targeted resource collection failure”. Interestingly, this meshes with the opinion of players discussed previously, whereby scripting could be permitted, but tweaked so as not to give an advantage over those who performed the activity manually.

One solution identified to protect the client is to disallow “the use of virtual machines with the EVE client as metrics indicating there are very few players using virtual machines for legitimate purposes”, and, indeed, player accounts indicate that virtual machines were a key feature of botting

142 strategies. There are legitimate players using virtual machines, most notably those on Linux or Mac operating systems who use virtual machines to run the Windows client. The Linux Eve client has been discontinued, while the Mac client is commonly accepted to perform less well than the Windows client. These issues were raised by the CSM for consideration.

The task force also notified the CSM of an increase in data mining, with the intention of “following the ISK through multiple laundering transactions”. The CSM enquired whether this included attempts to track out-of-game transactions such as PayPal, and it was indicated that this was a potential path being considered. A suggestion was also made to encourage the use of the ‘report a bot’ feature discussed above, known as "PLEX for Snitches", which CCP note “has been running informally for a while […] to encourage responsible reporting of security issues.”

CCP noted that RMT, at least so far as buying ISK is concerned, is considered separately to botting, being handled by customer service rather than the task force, and stating that “when ESTF comes up with detection tools for ISK buying, they will not go on a fishing expedition into the deep past looking for misbehaviour”, which seems a curious statement to make if the ultimate intention is to discourage this behaviour, thus reinforcing concerns about the norm which CCP wishes to re- enforce.

CCP noted in Las Vegas that “[o]nly 8% of players who receive their first strike go on to get a second strike, [and that] as of the week before the summit, nearly 100 players had received a third-strike, but an additional number of players who had been caught botting were separately banned for RMT”. However, CCP conceded that this may be a sign of RMT botters (who would be likely to re-offend) changing their behaviour to a pattern CCP had not yet identified.

Additionally, CCP noted that of the suspicious accounts, 527 had unsubscribed voluntarily, while 987 are currently active (subscribed and not banned subsequently). A graph presented by CCP showed reductions in botting activity around Chinese New Year, Hulkageddon and the start of ESTF action, perhaps suggesting not only that the action is successful but that it also supports past assertions about the location of botters.

5.14 Democratic Representation in Eve Online

Actually, none of us have any rights in here. It's not a democracy, it's a dictatorship. The dictators have spoken. Whether we [subscribe] or go play another game is the only actual right we have. You've spammed enough over the last few weeks that you've made your

143

point, so if you're still not happy why not exercise your right and go play [World of Warcraft] or something. (Lemster (2012), Eve Online Forums)

While the CSM, and the meeting transcripts produced, are certainly fascinating artefacts for those researching or participating in the environment, the CSM is itself not without problems. In Chapter 4 I considered how democratic representation had proved problematic in environments such as LambdaMOO and A Tale in the Desert, and so it is with Eve Online. As the quote above highlights, this goes beyond mere observation of the process and gets to the heart of the community, and as the example below will demonstrate, strikes at the core of the CSM’s stated purpose.

As detailed in Chapter 4, the CSM are elected from within the Eve Online community on a one- account, one-vote basis. One concern, acknowledged in the CCP white paper which formed the CSM, is the risk of meta-gaming, where players are able to give topics prominence at the design table, and so gain priority for projects which will aid them within the game, by voting as a block. Secondly, there were concerns that players will be elected (or not) for reasons that have nothing to do with gameplay or their position on key issues, but, rather, on their out of game character. The 2012 CSM election cycle provided examples of both.

During these elections, hundreds of posts were made on a CCP forum thread entitled “CSM is only a meta-game with ramifications” before CCP closed discussion, with many more in other related threads. The thread originator continually modified the original post, which by time of closure stated:

“During the course of this thread, I have come to a realisation; that I have no faith in the CSM. I can understand the intentions of CCP in starting the CSM. However, the problem is that is has become a tool of meta-gaming both in terms of alliance status and in terms of trying to manipulate the game for short sighted reasons. Candidates stand and are voted for based on sides, interests and bias”

This post, and the wider thread, highlighted a number of the potential issues discussed in Chapter 4, but gave particular focus to ‘tribal’ voting, CCP’s pre-selection process for the candidates, money and propaganda used to elect candidates and charisma being over-represented vs. ability to perform a role on the CSM.

While the thread ultimately descended into politicking between rival alliances, ‘Jenshae Chiroptera’ argued, “[t]here seems to be a growing tendency to destroy high security and wormhole space.

144

There seems to be large vocal groups who instead of working as people to improve their social groups or to get their area of space made better for them, seek only to sabotage the other options so that people are left with no other choice than to go out there and be slaughtered as victims.” and that “this process / system produces useless people and results, which may mislead CCP”. ‘JusFooling Around’ wrote that players should “[j]ust recognize the voter turnout for what it is - a small portion of the player base wanting to impose their views on the vast majority of the players who don't choose to play the part of the game they think we should”

CCP, in response noted that, in part, “while I understand your points, they can be made about any form of election and/or information gathering of this nature. The CSM is far from being the only source of information CCP uses, while it is (undoubtedly) the most prominent one”. CCP were, though, answering the wrong question; democracy and the CSM is not inevitable, rather it should be a case of finding the best solution that works for a particular environment, acting as a mechanism for all parties involved to negotiate the future of the environment and, I believe, resolving disputes that require a higher authority than customer service but for which legal resolution is not appropriate.

The second issue highlighted by the 2012 CSM elections actually came after the formal announcement of results. Mittani, the head of the CSM and who has been discussed in previous chapters, was re-elected overwhelmingly to chair the CSM, with over 10,000 votes – meaning that over 1 in 6 voters voted for him. During a presentation at FanFest – the Eve Online player convention – and during a session in which the participants were encouraged to drink heavily, he made remarks that were seen to be encouraging another player to commit suicide, summarised by CCP Navigator (2012) as follows:

One of the slides in his presentation featured a transcribed communication from a player whose fleet of personal ships was destroyed in game by a member of the panel presenter’s Alliance, and whom was subsequently scammed using a typical protection racket scam. The communication contained language that hinted at depression and thoughts of suicide.

The character was not specifically named in the slide (which is why it passed the review stage), but in the subsequent Q&A session following the presentation, the panelist spontaneously mentioned and then spelled out the name of the character (important to note not the player) in response to a question, suggesting “if you want to make the guy go kill himself, his name is [[REDACTED]], it’s [[NAME SPELLED OUT]]… He has his own corp. Find him.

145

Mittani was banned for 30 days and forfeited his position on the CSM. The news, and eventual punishment, spread far and wide to a number of gaming sites and traditional media. While this highlights the community reach, which I suggest in Chapter 6 is key for the mode of regulation and dispute resolution found in the offshore gambling industry to operate, the result was that it effectively disenfranchised 1 in 6 of the Eve Online voters – a large proportion of which were from one alliance – and subsequently affected the legitimacy of the current CSM.

The CSM white paper (CCP Games, 2007) does state, “any behaviour or actions considered being a material breach of the EULA or TOS by a CSM representative is grounds for immediate dismissal and permanent exclusion from all pending and future participation in the council. There are no exceptions, regardless of the infraction” (p. 20). CCP contend that despite this happening outside of the environment, because it was at a CCP sanctioned event, they were duty bound to act, and I do not disagree with this position. If the design of the system allows such disenfranchisement, however, it is worth considering whether it is a system that should be supported. The system could be markedly improved by implementing a formal by-election process, thus affording those whose votes were lost a chance to influence the new makeup of the CSM.

Figure 5: Jita Warning

Mittani, after his return from the ban, has orchestrated events such as “Burn Jita”, in which the principles of Hulkageddon described above were extended to any ship suicide ganking another within Jita, which, as described in Chapter 3, is the central trade hub of the environment – forcing CCP to include a warning when launching the environment. In doing so, he demonstrated how it is possible for him to impact Eve Online from outside the CSM just as he could within it.

5.15 Summary In essence, the combination of player accounts and CCP reaction point to the same key factors for the existence of botting and real money trading, and both of these can be traced to the norms literature discussed in Chapter 2. With respect to CCP, while the design that leads to players feeling

146 the need to automate play can certainly be questioned, the two key critiques both lead to the weakening of community norms.

The first of these is their failure to enforce norms that were established in the community, thus meaning that players began to feel that botting was standard behaviour within the environment. By doing so, they weakened the information available to players regarding the consequences of their actions, while those marketing the bots were successful in informing players as to their benefits.

Secondly, the introduction of legalised real money trading can be shown to have weakened the community norm against black-market currency transactions. CCP created the ability for them to sell currency to players and to profit from it while prohibiting players from profiting. As detailed previously, there are a whole range of legitimate reasons for them doing so, with many of them to the participants’ advantage, but in doing so they have blurred the distinction between acceptable and unacceptable behaviour. It appeared that many players knew you could transfer real money into the game, and so saw it as an economic decision rather than as cheating to purchase currency from the cheapest supplier, which was not CCP.

Finally, these accounts highlight the importance of negotiation. Discussion between the CSM and CCP appears to have brought these issues to the developers’ attention and has led to an increased focus on enforcement from the developers. Similarly, the wider community base expressed its desire for enforcement of the norm through the type of community enforcement action highlighted by the Eve News 24 investigation. Further negotiation also seems like it may provide further solutions, with proponents of botting suggesting a form of legitimised coding could be made permissible, with CCP restricting the potential of such activity being more advantageous than normal play.

The CSM also has a number of other issues, which question its worth as a self-governance mechanism. Many of the CCP responses to players questioning aspects of the CSM, whether it be the make-up or decisions made, are based on the principle that the CSM is inevitable. The CSM may be the best solution for Eve Online, but I do not accept that as a starting point for the debate.

Such self-governance mechanisms have proven over time to be problematic to implement, and have lacked mass-market support. The CSM succeeds in putting (some) players at the design table, though the extent to which they represent the larger player base is in question. Additionally, the CSM provides no means for players with disputes to take issue with CCP, and a district court in Reykjavik is still the only remedy open to players not satisfied with customer service responses. It should not be sufficient for CCP to point to the CSM in response to a call for greater player representation.

147

What is also clear through the examples discussed in this chapter is that the norms theorems proposed by McAdams (1997) and Ostrom (2008), amongst others, are certainly evidenced in contemporary online environments. While the use of an esteem model is complicated by actors whose sole objective within the environment is ‘grief play’, that is, to upset and offend others, on a broader level the theory is still applicable – those who engage in activities such as botting and real money trading are demonstrably held in lower esteem by both the wider player base and the developers.

Eve Online also highlights the importance of McAdams’ second criterion: the risk of detection. When CCP were less actively taking enforcement action, and it was not a priority within the community, there was an undeniable increase in botting activity. As the community started to self-enforce these practices and players got caught, and as CCP’s own enforcement mechanisms grew, the anti-botting norm grew stronger and sanctions were imposed.

The examples presented in this chapter are not intended to provide an extensive description of situations that may be subject to dispute resolution or regulation within Eve. Rather, they serve to contextualise the sources of dispute mentioned in Chapter 4, emphasising that while the wide range of issues discussed previously were discussed in largely theoretical terms, they are issues that impact directly on the environments and participants, each of which has their own methods and motivations, and, in turn, they impact the whole community.

Chapter 7 considers these topics, but also the broader range seen in Chapter 4, in questioning the applicability of the regulatory and dispute resolution mechanisms utilised in the offshore gambling industry, and that the conditions identified in Chapter 6 for such mechanisms to operate can be shown to exist in this type of online environment. In doing so, a participant-driven dispute resolution mechanism would provide immediate benefits to participants within these environments, and may reduce the need for further top-down regulation to be imposed on the industry.

148

6. The Offshore Gambling Industry

As discussed in Chapter 2, it is useful and illuminating to draw comparisons between the gambling industry, EVE Online and online environments more broadly. Having established that similar types of disputes arise in both environments, this chapter considers the evolution of the offshore gambling industry over the last decade, from geographically specific operations, through phone operators to the diverse online industry it is today. In doing so, I will describe the method of regulation and dispute resolution that evolved in the industry and led to the issues of an unregulated environment being partially resolved by the participants themselves, and I will identify the conditions that enabled this regulation to occur. These conditions are significant in making an argument that such a system may provide a potential approach for resolving the types of issues identified in contemporary online environments in Chapters 4 and 5.

The offshore gambling industry, due in part to its relative youth but also to its underground nature, has received very little attention in academic research, and much of what has been published centres on moral/ethical issues (King, 1999), a comparison to the legalised gambling offered in the United States (Griffiths, 2004), or its economic impact on those countries that support it (Wilson, 2003). Andrle (2004) and Rose (2011) outline the methods of gambling regulation in several jurisdictions; however, what they offer is a theoretical discussion of regulation through interpreting the relevant laws and statues. What actually happens in practise is somewhat different, and this paper seeks to outline how the reality differs from this theory, based on 10 years of involvement with the industry and archived discussions on community discussion forums.

A number of the disputes discussed and posts quoted in this chapter relate to American participants in offshore gambling environments. As such, the terminology used is specific to those participants. While the majority of such terminology is explained at the time, a number of them run throughout the chapter. In particular, American gamblers use odds referred to as ‘American Odds’, which are expressed as -110/+110 vs. the European/Australian standard of 1.91/2.10 – the equivalents of the American odds quoted. In essence, these odds describe the amount you have to bet to win $100 (if the odds begin with a minus sign), or the amount you receive if you bet $100 (if there is a plus sign). That is, -110 means you bet 110 to win 100, and +110 means you bet 100 to win 110.

The term “chargeback” is also frequently used, relating to players utilising a credit card to make a deposit, playing, and then claiming the transaction was fraudulent if they lose, giving them a no-lose proposition. Finally, it is important to note that during this era the issuance of deposit bonuses was

149 common. In practice this meant that if a player deposited, for example, $1000, they could expect to receive anywhere from $100-$500 in additional funds for doing so, in exchange for agreeing to make a certain volume of bets.

6.1 International Gambling In considering the existing literature, it is necessary to separate ‘online gambling’, to the extent that it is legal and authorised by an authority having jurisdiction for both the operator and the participants, and ‘offshore gambling ‘, a term generally used to refer to companies set up in countries such as Costa Rica, Panama and Antigua that are generally focused on offering casinos and sports betting services to US patrons, for whom the very act of placing a bet has questionable legality (though no attempt to enforce this on players has been seen to date).

In “Cross-border Online Gambling Law and Policy”, Hornle & Zammit (2010) outline a number of issues surrounding international online gambling policy. They note that there are two “diametrically opposed” views towards online gambling; those who consider it a legitimate leisure pursuit while acknowledging risks that may be “no different from the risks associated with many other leisure activities”, and those who consider it a vice, often from a “moral (or religious) pint of view”, considering it to have “little social utility and involves serious harm to health (addiction) and finances (overspending), which not only affects the gambler himself, but also his social environment” (p. 2).

They continue to highlight that while this debate presumably dates back to the beginnings of gambling (see also Calleja & Woodford, 2009), “because of the ubiquity of the internet, it can be provided at a distance [meaning that] the destination country, whose population engages in online gambling, will have the burden and cost to deal with gambling addiction and the harmful consequences of gambling without obtaining the revenue”, or, indeed, having the opportunity to set gambling policy. Indeed, a large number of countries that host online gambling providers allow them to operate with the proviso that they do not allow citizens of the host country to participate.

Hornle & Zammit outline a number of motivations, of which I will focus on the four that have broader application to the type of environments I consider in the remainder of this thesis. The first of these is addiction, which largely refers to overspending and, thus, consumers getting into excessive debt. The second motivation given for legislation against online gambling is the protection of minors. Given that gambling can lead to losing money, and the addiction pitfalls noted above, it is certainly in the public interest to not expose minors to such an activity.

The third motivation, and one I will refer to in far more detail in the sections that follow, is consumer protection – that is, “ensuring that adult players are treated fairly and openly when engaging in

150 online gambling” (p. 17). This contains a number of facets, including fake gambling websites that are used to attract customers through bonuses or other methods, with no intention of paying out any money should the customer win. Finally, and linked to this, is the ability to ensure whatever regulation exists is applied, which can be extremely difficult when the participants and operators are in different jurisdictions, often with different approaches to regulating gambling. Here, Hornle & Zammit use the example of a sporting event – particularly notable with the recent match-fixing in football – but it is equally applicable to games such as online blackjack or other casino games, where industry operators such as Shackleford (2012) have frequently noted fraudulent activity.

The regulatory mechanisms employed worldwide differ greatly, summarised by Hornle & Zammit as “(1) outright prohibition, (2) limiting gambling to charitable entities, (3) limiting gambling to a state monopoly, or (4) licensing private gambling operators and allowing them to compete in a liberalized environment” (p. 23). They continue to note that regulation usually requires that it be made “a criminal offence for the gambling operator to provide gambling at all or to provide unlicensed gambling, and/or a criminal offence for intermediaries to provide their services to (unlicensed) operators or, finally, for the punter to gamble on the internet with (unlicensed) operators” (p. 23).

They also note that states, for largely historical reasons, tend to have a piecemeal approach to gambling regulation – with different rules depending on the form of gambling (and, indeed, different definitions for the same activity), online vs. offline gambling, domestic and foreign providers, and services provided domestically vs. those provided to foreign jurisdictions. Such worldwide variations make it increasingly difficult for any coherent form of international regulation to take place, and are a significant factor in the development of the third-party regulation that has taken international laws’ place in the global gambling industry.

In many ways this mirrors other contemporary online environments, with different national legislatures placing regulations on platform operators in line with their national interests. It is, though, difficult for any judicial authority to claim jurisdiction over platform operators wholly based in other countries, consequently regulation is similarly piecemeal and ineffective.

Licensed Jurisdictions Considering those jurisdictions that chose to implement licensing, Hornle & Zammit note, “licensing conditions implement the policy objectives [and] the theory behind a licensing regime is that consumers would be likely to gamble only with licensed online gambling providers as these would be regarded as ‘safe’ to gamble with” (p. 26). Experience has proven this to not necessarily be the case – while the United Kingdom regulates a significant number of sportsbooks and other online gambling

151 venues through the Gambling Commission; a not-insignificant proportion still chose to bet through less-regulated venues in the Caribbean.

One reason for this is that the “more or less detailed or onerous conditions” (p. 27) imposed on providers often lead to higher costs, and, indeed, as a result of the licensing regime, a “significant stimulation and hence an increase in demand for gambling services” (p. 26) is seen in the market, allowing a provider to target those profitable customers who will bet regardless of the odds being offered. As unlicensed bookmakers do not benefit from this, they are forced to compete on price (or, in the case of gambling markets, the margin taken on the bets), and thus are more appealing to professional (and higher volume) customers.

The final significant area I wish to touch on from Hornle & Zammit’s analysis is what they refer to as the distinction “between the initial grant of a license and ongoing supervision requirements and the actual checks and controls carried out during the operation of the license”. This distinction was highlighted in the case of Sports Alive, an Australian regulated book that went bankrupt in August 2011, owing money to large numbers of players.

Sports Alive, previously known as Sports Acumen, were licensed in the Australian Capital Territory (ACT) – the license requiring a bond of $250,000 and, under ACT regulations, required customer funds to be held in escrow – separate from day-to-day operational funds; though following the bankruptcy it was argued that the ACT made no effort to ensure that such a policy was followed, despite being required to undertake an audit only two months prior to the collapse, in June 2011. Such disdain for their policy has led Australian gambling commentators to claim (Fisk, 2011) that “an

ACT wagering licence is not worth the paper it is printed on” – and this is in one of the supposedly best-regulated online gambling markets.

In the United Kingdom, the Gambling Commission has powers to regulate operators located within the United Kingdom, and it “has extensive enforcement powers to ensure compliance with the terms and conditions of a license” (p.67-68), such powers are limited to financial penalties, review/suspension/revoking of a licence – that is, they have no power to order an operator to act in a certain way or to overturn a decision on an individual bet placed by a customer. Indeed, this would be a matter for a court, small claims or otherwise, depending on the size of the bet.

The above outline mirrors in many ways the formal regulation methods discussed in Chapters 2 and 4 for the gaming industry. While often successful at regulating the industry at a higher level, these mechanisms often fail to provide the type of efficient dispute resolution that those participating in the industry on a daily basis desire. As I shall detail subsequently, though, customers in such

152 regulated environments still chose both to participate in the offshore industry and to request the participant driven mediators involved in offshore disputes to mediate disputes with domestic bookmakers in regulated countries.

By contrast, the offshore gambling industry has very little regulation at the policy level, though it does have options for dispute resolution between participants. Accordingly, the remainder of the discussion in this chapter is focused on the offshore gambling industry, as it is this industry that – as discussed in Chapter 2 – shares a number of common aspects with the type of online environment discussed in the greater part of the thesis. As I shall detail subsequently, customers in regulated environments still chose both to participate in the offshore industry and to request the participant driven mediators involved in offshore disputes to mediate disputes with domestic bookmakers in regulated countries.

6.2 A Short History of the Offshore Gambling Industry The early history of offshore gambling remains murky, and identifying the true pioneer is impossible. What is possible to say with certainty is that at least two operators, Intertops (now closed to the US market) and SportsOffshore (now defunct, with principals facing US legal action), had a web presence as early as 1996, though the history of offshore betting predates that.

One of the early operators, Bowman, launched out of the UK in 1985, originally named “American Football Pools”, with the US sports betting marketplace as its target. The operation sold parlay cards, a form of betting where handicaps are set early in the week for a fixed payout, in exchange for the player having to win 3 or more bets to receive a payout. As a result of being sold from the United Kingdom, Bowman avoided US anti-gambling legislation. His operation took off, expanded, and eventually became the online Sportsbook, Bowman International.

Meanwhile, in the late 1980s, a ‘local’ bookmaker from the United States with a large customer base launched an offshore call centre to take and manage his bets, with the intention that, by doing so, the bets would be accepted in a jurisdiction outside the reach of US legal authorities. The bookmaker, identified as the largest bookmaker in the United States, took out advertisements in US national sports publications to build his business, and was eventually featured on US current affairs show 60 Minutes. While his assertion seems questionable today, especially as payouts were still being made through agents operating in the United States, it appears to have done little harm; his company continues to operate today as BetCRIS in the international market and Bookmaker.com for United States customers.

153

In the early to mid 1990s, as the internet began to gain acceptance, books following the pattern of CRIS started launching web presences. At this time, they were not taking bets via the web, but simply had a landing page that advertised a phone number, perhaps a bonus, and gave a little information about the operation in order to attract customers – it was, effectively, just the same as the advertisements taken out in publications by CRIS.

Intertops launched in 1982 in Germany, but ran into legal difficulties and relocated to London in 1983 to receive a bookmakers license, with which they targeted customers back in Germany via phone betting – the first documented case of a bookmaker obtaining a ‘safe haven’ licence to market to a company where bookmaking is illegal. Between 1983 and 1991, other books followed this modus operandi, most notably today BetOnline in Panama, but other operators launched in countries as diverse as Belize, Venezuela, Dominican Republic, Costa Rica, Jamaica and Antigua. In 1991-92 the UK government, under pressure from both Germany and the United States, began drafting legislation to restrict bookmaker licencees from engaging in cross-border trade, and caused Intertops to relocate to Austria.

This brings us to 17 January 1996, when Intertops, under the guidance of Simon Noble (latterly of WWTS, and more recently the largest offshore operator, Pinnacle) launched their online presence. On this day, Intertops accepted a $50 wager on a UK football match between Hereford Utd and Tottenham Hotspur – the first ever sports bet made online. 1996 also saw the launch of operators such as VIP Sports, Sports Offshore, Players Only, Rio International and Big Book targeting the United States. International Gaming & Wagering Business, a trade publication, estimates that about $143 million worth of sports bets were placed online in the United States in 1996.

At this stage, Intertops were still targeting the European market however Austria, in 1997, decided that while phone accounts were OK, they did not want to offer online betting, forcing the relocation of Intertops online operation to Antigua in late 1997, and the translation of their website to English and marketing to the United States. Over the next years the market grew rapidly, with the industry worth $29.3 billion in 2010. With this being a shadow economy, the number of operators, and the volume of the market, changes frequently, and no accurate records exist as regards volume.

6.3 Offshore Regulation While ‘offshore’ has commonly been understood to apply to jurisdictions such as Costa Rica and Antigua, there are a number of European countries that also offer online services to customers from relatively unlicensed (in practice) jurisdictions. Some of these cases are well documented, for

154 example in issues involving BetChance (discussed in detail below), while others have seen resolution attempts behind the scenes.

The Maltese authority, named the Licensing Gambling Authority (LGA), have a reputation for ignoring emails from players, and a history of inaction spreading over several failures. The LGA freely admit that, while they are often represented as a regulator, the LGA can only make recommendations. This lack of action is especially worrying when we consider the prominent role that Malta has taken in the online gambling industry. As Mangion (2010) notes:

Malta is one of the most popular domiciles for online gaming companies due to its strong regulatory framework and its favourable tax regime. According to Finance Minister Tonio Fenech, the Maltese iGaming industry is expected to grow continuously in 2010. During the last six years about 600 gaming licence applications were processed by the and Gaming Authority. Because of Malta’s strong regulatory framework, business-friendly measures like cost of labour and its expertise in the gaming industry, the jurisdiction is now on the forefront in the industry.

The ‘strong regulatory framework’ referred to here is perhaps, then, problematic. It appears to favour companies over players, and the ‘favourable tax regime’ may in fact be the reason so many companies are located in Malta. The LGA, and the image they portray publicly, appears to be primarily a marketing tool whist the companies within the industry continue to operate without effective regulation. In practice, such operations find themselves coerced into co-operation with Sportsbook Review and Casinomeister.

Antigua is an example of ‘non-European’ licensing, and was the operating base of WSEX – who were one of the first US targets in the form of proprietor Jay Cohen. WSEX are currently delinquent to the extent of well over $500,000 in payments to customers, and indeed were slow-paying customers as early as February 2010. Antigua’s licensing authority took until December 2010 to revoke WSEX’s licence, and as of April 2012, WSEX still appear to be operating out of a base in the country according to contact details found on their website.

Hornle & Zammit (2010) quote the Antiguan regulations as stating that “no person shall engage in the operation of interactive gaming or interactive wagering activities unless that person holds a license granted under the Regulations, […] the regulations give the regulator discretion to decide whether the applicant is a (or its directors/shareholders are) suitable person/s […] and that regulations also deal with pay-out of winnings and interruption of gams. They provide for detailed record-keeping requirements and provide for annual reviews” (p. 69). As with the Sports Alive case

155 in Australia, this only goes to show the difficulties of implementing a regulatory regime for gambling operators, and it highlights why such third-party regulators have become such significant stakeholders in the industry.

On the subject of self-regulation, they note that the advantage of such regulation “is that rules and standards set by the operators themselves are likely to be more practical, based on business practices, since the operators have a better understanding of their own business than a legislator or regulator has”, while noting that “its rules and standards frequently have not been subject to a process of political consensus involving all stakeholders [and that] self-regulation frequently has ‘no teeth’ as there may be no independent body monitoring its implementation and enforcing those standards” (p. 74).

Indeed, much of the academic focus on the offshore gambling industry has concentrated on regulatory bodies such as E-Cogra and the IGC (Miller, 2006), which are both orientated specifically to casinos (as opposed to sports betting), and represent formal complaints made to bodies that often have no jurisdiction. Similarly, both Andrle (2004) and Rose (2011) fail to identify a key component of regulation – dispute resolution.

It is true to say, as I have above, that either “no gambling license is required” (Rose, p. 84) or countries “require licensing but are not strict about prerequisites” (p. 85), and that if “the countries with the lowest tax rates also happen to be the countries with the weakest regulatory policies, then the result [of an international regulatory schema] would not be much different from the situation as it stands today” (Andrle, p. 1414); however, in an industry where large amounts of money are at stake there are always likely to be disputes, and even those operators in countries with no licence are still subject to the judgment of the public, with dispute resolution services playing a large role in establishing that public judgment.

Effective regulation in these industries often takes the form of self-founded regulation bodies set up either as public services or as a business. In the former case, these often evolve from industry participants using their contacts to resolve disputes published in public forums, giving the participant a reputation as a go-to for solving disputes, and as such may evolve into businesses. In the remainder of this chapter I address the mechanisms and processes for such dispute resolution in the gambling industry – where this has worked, where it has failed and the questions that remain unanswered, and in Chapter 7 I consider how such mechanisms could be implied to the virtual environments that are the subject of this study.

156

The United States and Offshore Gambling Hornle & Zammit (2010) note that “[j]urisdictions differ in their powers and practices as to ongoing supervision, audits and inspection, as well as the penalties imposed in case of non-compliance (such as financial/administrative penalties, penalties under the criminal law, non-renewal or withdrawal of the license)”, and also that “a more liberal approach to the regulation of (online) gambling can be found in many offshore, island locations, where online gambling is regarded as an important source of revenue and employment” (p. 29). The United States claims jurisdiction over services offered to its citizens regardless of where it may take place, and have launched prosecutions seeking to enforce that jurisdiction.

The landmark case in the prosecution of gambling operators is that of Jay Cohen, former proprietor of WSEX, launched in Antigua in 1996. When asked by Sports Illustrated in 1998 why he felt the operation was legal he stated, “Why am I sure this is legal? I came from the stock market. If that's not gambling, I don't know what is.... Internet gambling is the same as my last career, except the folks I work with are now less sleazy” (in Lubben, 2003, p. 321). Regardless, an FBI investigation ensued, and he was convicted in 2000 of violating the Wire Act. A subsequent 2001 appeal was also unsuccessful.

Hornle & Zammit (2010) also cite the “permanent injunction closing down BetOnSports Plc, a company legally established in the United Kingdom, prohibiting it from accepting bets on sports events from US punters online or on the telephone and ordering it to pay a refund to punters” (p. 45). What they do not note is that the cited case dates from 2006, and that in 2011 BetOnSports paid customers 4.63% of their held balance. BetOnSports was estimated to be $25million short of meeting its liabilities, and while some claimed this means the company amounted to a Ponzi scheme, such analysis fails to note that the US government received $44m in settlement from the company’s owners, with the US government declining to allow those funds to be refunded to customers, stating that it “was not BetonSports’ money and was proceeds from illegal activities” (Henderson, 2010).

If they were writing in 2012, she might also cite the US Governments recent success in claiming domain names of operators servicing US customers, such as the BetCRIS owned Bookmaker.com, under 18 U.S.C. §981 and §1955(d), i.e. civil forfeiture and prohibition of online gambling businesses. Such successes are often limited to generating publicity, with operators simply relocating their sites to domains outside of US control, such as .ag (Antigua) or .eu (European Union).

Returning, however, to the Wire Act, it is significant to note that it “has not only been applied to gambling operators, but also to payment service providers processing online gambling payments in

157 order to disguise their origin” (p. 47). Similarly, the UIGEA has specific clauses penalising payment providers, which have resulted in a number of e-wallets, credit card providers and other payment transfer services from taking action to prohibit gambling transactions. It is this act that led to Linden Labs banning gambling activity in Second Life..

Participant Driven Regulation The regulatory model that developed in the offshore gambling industry came about through a lack of substantive alternatives, either in the participants’ home jurisdiction or in that in which the sportsbooks operate. While the United States claims jurisdiction over some issues within the offshore gambling industry, as seen in the BetOnSports case they have neither the desire, nor most likely the ability, to involve themselves in disputes between participants and service providers. Thus, participants were forced to look elsewhere to resolve disputes where the terms of the bet, or the terms of payment of the bet, were in question. Given the lack of other solutions, a number of bottom-up attempts at regulation were to emerge from the community itself.

English Sports Betting / Telebet.com As discussed previously, early offshore operators were effectively a spin-off of illegal domestic bookmakers and so were subject to the same norms (take the bet, pay the bet) and social pressures in the original market. As these operators began to move offshore and social ties that forced payment were lessened, a worrying trend towards non-payment emerged, with perhaps the most famous example being an operation named English Sports Betting, or Telebet.

Figure 9: English Sports betting (telebet.com) website, December 1996 (via Archive.org)

English Sports betting was amongst the first operators to establish a web presence, though primarily accepting bets via the telephone (their domain name was telebet.com). For a good many years they were a reputable outfit, servicing players without issues, until they began to stop paying

158 participants, between 2001 and 2002. While there is no definitive total on the amount owed to players, it is fair to say it is at least 6 figures. They were certainly not the first online operator to refuse to pay a client (see figure 2) but they were the first of what we might consider the mass- market sportsbooks.

Figure 10: SportsbookReview website, May 25 2002

They were also to set a precedent for what was to come, continuing to maintain a web presence, take deposits and bets until December 2005. ESB were certainly not an exemplar for the power of regulation, governmental or otherwise, with SBR reporting they were bouncing cheques as early as October 2001, and describing them in 2005 as the “king of Scam-Sportsbooks” (SBR Wire, 14 June 2005), nevertheless what they did achieve was a well-reported scam which encouraged sportsbook players to submit their problems and disputes to central locations.

Over the course of the offshore gambling industry’s development, a number of different parties could be said to have acted as mediators of disputes. These have met mixed success, and so it may be instructive to consider some examples of their varying successes and failures to see what factors led to one mediator becoming the industry norm, and to see the community reaction that left others a mere footnote in the history of the industry. In doing so, I will also consider the platforms through which these mediators operated, which varied from forums (themselves with different targets) to affiliate programs and ranking sites.

6.4 The Forums: TheRX, Majorwager & The Offshore Wire In the early stages of the industry there were several major players, TheRX, MajorWager, TheOffshoreWire and Sportsbook Review, involved in the process of rating sportsbook industry participants. All of these were founded out of the industry, primarily being operated by active

159 gamblers, although at times sportsbook owners and staff have also been involved in the operation of the sites. Similarly, while all, as documented below, were keen to highlight when they helped players, the underlying motive for each appears to have been to create a sustainable online business within an industry they were interested in; indeed, most – if not all - were gamblers themselves. Again, for ethical reasons, I do not intend to detail the ownership structures, beyond information put out by the sites themselves through press releases.

The first three of these were, at the time, forum-based and not only recommended sportsbooks but also openly took advertising from them and adjusted their preferences accordingly. It is instructive to consider these, not merely to understand the evolution of the regulatory system but also to answer those who might suggest such systems would be appropriate for contemporary online environments.

Forum-based communities brought together participants in the offshore gambling industry to discuss operators, as well as gambling and sports more generally. These forums typically garnered revenue through receiving paid advertising from sportsbook operators. Thus, while the principals of the site may dispute whether it is necessary, I found it helpful to break down their mediation services into two groups: disputes involving sponsor books and disputes with non-sponsors. In both cases, their power to have operators comply with the decisions of staff effectively resulted from the negative publicity that they would otherwise receive on forums. In the case of books with which they had sponsorship arrangements, they also had the advantage of a direct line to levels of upper management within the company, who had the power to make decisions that perhaps the standard customer service staff did not.

The distinction between sponsors and non-sponsors is an important one to make. It is the former cases that eventually saw the move away from relying on forum staff (moderators and/or ownership) as mediators in disputes. Forum staff had the ability to engage operators in disputes, and to have them comply with mediations where others failed, due to their access to senior staff within the operators. However, the conflict of interest that arose from being funded by those same operators while attempting to represent players caused the community to lose trust in forum-based mediators, particularly in the later years of the industry where more ‘problematic’ advertisers had to be taken on to maintain the profit margins of the site. It should be noted that in the early days of the industry, forum operators tended to only promote the elite books, while in later years these elite books either had sufficient clientele to not advertise or had withdrawn from the US market due to legal concerns.

160

Success Stories While there are many cases I could cite here, including several infamous examples where it was eventually discovered that the player was in fact trying to scam the bookmaker (it is important to note that not all these disputes are one-way), it would be excessive to outline the entire 10+-year history of disputes in the history of community forums.

In the early days of the industry, particularly from around 2000-2006, when the industry was small, regulation was minimal (even US players could use e-wallets to deposit), and the majority of operators were profitable, meaning forums could limit their sponsorship to the best of the bunch, they were an incredibly successful medium for dispute resolution, and resolved cases probably numbering in the hundreds. Here, I will discuss two cases that were resolved successfully and two that were not so as to briefly consider the process such disputes took and the means of resolution.

MyBookie In May of 2005, the sportsbook MyBookie (which closed along with its then parent company, VIP Sports, in July 2011) was a relatively new bookmaker targeting the recreational market. The bookmaker contacted a large account holder, owed around $125,000 USD, and suggested they may not pay him his balance unless he accepted $0.40 per $1, effectively costing the player in the region of $85,000. After receiving the first wave of funds, the player attempted to publicise his case. On May 25, SBR (2005) reported:

SBR COSTA RICA OFFICE REPORTS: GrandCentral Sports(SBR rating D+) dba Mybookie proves why private oversight of the offshore sportsbook industry is insufficient to protect players. MyBookie forced a player, allegedly by suggesting they may stiff him out of his entire balance, to accept .30 on the dollar, a move that cost the player $85,000. Except for SBR and little known TOW, none of the so-called player advocate sites have even reported this incredible theft. This is easily the largest sportsbook theft case of 2005. Lawmakers in North America will undoubtedly use this theft as an example of how vulnerable players are to unregulated sportsbooks. SBR has repeatedly called for GCS to pay the player or show cause why he should not be paid. Sources in Costa Rica have told SBR that because the only major website that took up the players’ cause was SBR that GCS felt they got away with minimal backlash.

However, many respected operators here in Costa Rica are disgusted with the forced theft. One operator complained publicly and privately that even SBR was not doing enough to pressure this book to settle in full with the player. Operators here recognize that these types

161

of theft will be the beginning of the end for the sportsbook industry.

SBR’s position is clear: Pay the player or show cause as to why $85,000 was confiscated. Failure to do so will result in the possibility of an SBR Scam Warning press release as well as a possible downgrade to the SBR Blacklist.

Another watchdog at the time, TOW of TheOffshoreWire, was also reporting the case. He posted (TOW, 2005) on TheRX the following summary of events:

“The player asked to withdraw his balance. Mybookie suspected the player had won consistently because of being in cahoots with one of their linesmen. The player (Mybookie's lawyer confirms) was adamant in denying foul play. Mybookie then proposed the player to rollover the balance 10 times before cashing out. The player initially agreed (he states he had no other option), then reneged the agreement and asked to cash out again.

Mybookie then put him in touch with their lawyer. The lawyer proposed to settle for 40K or nothing. The 40K amount was determined based on his original balance (125K) less 85K being Mybookie's estimate hold on the 1,250,000 rollover volume (7%). The player states he was advised by his friends and other gambler he knows to take the 40K. A conference call between the player, the lawyer and myself is scheduled for tomorrow afternoon.”

A substantial debate followed with respect to the power of SBR and other watchdogs, with posters arguing both that a blacklisting would, and would not, have a significant effect, although I shall return to those perspectives more in following sections. Over the course of just 2 days (in comparison to the 26 days IBAS, claims as an average time2 to reach a final decision on a case), the case was discussed between both the player community and watchdogs across several sites.

MyBookie (in TheRX, 2005) stated that they had sent the entire balance in escrow to a lawyer for settlement proceedings to take place, while also alleging the player had a history of credit card chargebacks (which had later been settled) and that the player was suspected of irregularities in his play, which he admitted “may have occurred” in a notarised document. They stated that “(n)ow the player has nothing to lose he is claiming foul and violating the terms of the agreement in which we now have the right to sue for damages”. The agreement was posted, and contained the term "I agree that nothing shall preclude XXXXXX from proceeding further in the investigation of possible winning irregularities of which possibility I am aware, however, this Agreement constitutes a

2 http://www.ibas-uk.com/newsPress.php?newsID=19

162 final mutual and reciprocal receipt, release and discharge between us in respect to all of our past dealings up to the date hereof.”

As the case developed, TheRX operators appeared to try to keep pace with public sentiment, attack other ‘watchdogs’, while also defending the sportsbook (who were, of course, an advertiser). The threads combine to over 15 pages – a detailed blow-by-blow is beyond the scope of this thesis. RX proprietor ‘The Shrink’ ended with a lengthy post (in TheRX, 2005) beginning with the line “ANYONE who says in this thread that MYBOOKIE INTENTIONALLY tried to STIFF this player is either NAIIVE, MISINFORMED, and a complete MORON”. The pertinent part of the conclusion reads:

Both the PLAYER & MYBOOKIE gave COMPELLING arguments to some fact finding questions that both THE GENERAL and I asked of them all day and late into the night. In other words, both parties were DRILLED in order for US to arrive at what we thought the PROPER DECISION should be.

And, I am not ashamed to admit that we ruled IN FAVOR OF THE PLAYER, but it should be stressed that MYBOOKIE had several VALID reasons to HOLD the PLAYER'S MONEY until they could run an INTERNAL investigation within their own sports book.

But the PLAYER opted for a SETTLEMENT before any internal investigation got done. Hence, MYBOOKIE was given legal advice to NOT PAY a dime more, since no one coerced the Player to SETTLE at first...

But, since the General and I could not find ONE FACT to indicate not paying the PLAYER, MYBOOKIE decided to indeed make the FINAL PAYOUT to this guy and respect what BOTH the GENERAL and I suggested...

This has GOT to be seen as a POSITIVE sign, especially when a sports book goes against its own LEGAL advice based on OUR suggestion. And please don't forget that they have now paid this gambler well over 300k in WINNINGS, too!!!

The bottom line is that any sports book who is willing to allow US to mediate a dispute is clearly worthy of your business.

On the 30th May, MyBookie (in TheRX, 2005b) posted a response, which stated, in part, that:

163

Having had a few days to "cool off" and reflect back on the events in the recent player dispute with mybookie.com , I was able to ultimately come to the same conclusion as many people have expressed here, and that is that we were 100% wrong in withholding winnings in this case.

Yes there were suspicions and yes there were irregularities but that did not change the fact the player had won fair and square. I would like to believe that because we had a legal signed and notarized document agreed to by both parties ,we were right, but this is not about legal technicalities only about whether or not we acted in accordance with sound business ethics and on this I must say no we did not.

I did not put principals before personalities, as it became somewhat of a personal thing with certain promises and verbal agreements being broken . I am sure that our attorney also was convincing in his arguments (as that is what he is paid to do) to the player that it would be better to accept a settlement rather than have the account frozen and investigated for fraudulent activities.

I must say that initially when I was contacted by Roberto from TOW I was adamant in that we had done nothing wrong. Also when contacted by General and Shrink and Russ I felt we had a legal agreement and that was that, but after explaining to them all the details (which do not need mentioning) they still drew the same conclusion WE WERE WRONG.

At this point I was ready to fight and was convinced that if we went to arbitration that we would win (after all we had legal documents). Luckily for me this was not the end, I received another phone call from General and Shrink stating they had spoken to 6 different people in the industry and they all had the same conclusion WE WERE WRONG. I also got opinions from Russ at MW and Rick from my own staff who also stated WE WERE WRONG.

We are also going to implement some player dispute policies in which RX, MW, and SBR web addresses and email addresses will be made available to players vis our web sites. This being an unregulated industry these sites do in fact hold operators to a certain set of standards.

While this dispute largely argues in favour of the role of mediators such as Sportsbook Review, as well as the forums of the time, it also highlights the significance of community, and a reputation within that community, as opposed to formal legal agreements which the operator felt were in place Their willingness to discuss this dispute publicly, and to subsequently to reach a settlement in

164 accordance with community opinion, shows that a strong and coherent community has the ability to shape operator behaviour.

MVP Sportsbook It is not the case that in every dispute the player is in the right. In March 2004, a player using the alias BetMore brought a dispute with MVPSportsbook (part of the BetOnSports family which fell foul of US regulators in 2006 and subsequently failed to pay account holders) to the MajorWager forum. The player made a $6000 deposit to the sportsbook after claiming to have been told by a sportsbook representative that they were to receive a 10% bonus. Subsequently, they did not receive the bonus and were told this was due to there being a note on his account making them ineligible for bonuses. In response, the sportsbook asserted that senior management had already stated that they were not eligible for bonuses and, in effect, attempted to persuade a lower level clerk to offer him the bonus.

Similarly to the above dispute, the player, sportsbook, mediators and other forum members went back and forth discussing and debating the dispute, and again this dispute was resolved in less than a week. In their first posting on the issue, the sportsbook stated (in MajorWager, 2004):

First of all I will like to thank the input giving by all Posters here. It's contributions like these that strive to keep the Offshore Gaming Industry a safe haven for all who enjoy the entertainment provided by the establishments that compose it.

Regarding the matter in dispute with "Betmore", we have in our power a complete historical of his inquiries on bonuses and the regulations that they abide by. Betmore has being formally informed of these regulations on various occasions. This was done via email as well as via telephone. Please note that we are not withholding his funds or forcing him to play. He has the liberty and right just as any other educated consumer to choose the service/establishment that better suits his needs. “

The dispute developed further, with the player arguing that the sportsbook were refusing to pay him without fees, which the sportsbook claimed they were entitled to under the terms of their bonus policy. As the thread reached its conclusion, poster Daringly, who was later to become Justin7 – head arbitrator at SportsbookReview, posted:

Call up ANY book. Ask them "If I reload, will I get a bonus?" Nearly every one will say yes. Ask them "The last time I played here, I won and withdrew more than I posted. If I repost, will I get a bonus?" Most will say no. Most sharps know they don't get bonuses for reloading after winning, unless that is discussed in the CLEAREST TERMS. I have had this EXACT conversation with many books (before I post), and 90% will say "Oops, what our clerk 'meant' to say was you get a bonus, if you were a loser last time."

165

Two days after the dispute originated, the MVP Sportsbook proprietor came to the forum, with the following offer:

This topic appears to have hit a nerve with some forum members, so let's see if we can draw a conclusion in the fairest way that I know. Let's lay out the facts, and appeal to The Major for a decision.

The client in question has been a member of MVP Sportsbook since September 7, 2002. When he deposited in response to a 50% bonus offering (we do this once a year as everyone knows). The client has withdrawn and been paid $27,000+ in winnings from MVP. Congratulations to the client - excellent job!

The client has shown that he does not deposit, unless an unusually large bonus offer exists (as evidenced by the response to the 50% bonus offer). Since we noticed that the client only responded to large bonus offerings, and was killing us with our own bonus money - we told him "No more bonuses". We did not do this in a rude fashion, we simply said "If you would like to continue playing here - you may do so, but you will not get bonuses any longer". This is clearly noted on the client's account.

As if this was not enough, in this specific instance, the client is RE-DEPOSITING FUNDS that he withdrew from MVP. This 'issue' is clearly

covered on our bonus page found at http://mvpsportsbook.com/sportsbook_...bonuses_.html. If you read under Re-Deposit Bonus, it clearly states (and I quote): "Money withdrawn and then re-deposited does not qualify for the re-deposit bonus!"

In summary, (i) the client has been CLEARLY INFORMED throughout his relationship with MVP, (ii) MVP has lived up to every offer the client was given including the 50% bonus offering up to the date when the client was informed "no more bonuses", and (iii) the client has won $27,000+ and been paid in a timely fashion. For these three reasons, we feel the client has been treated appropriately.

166

Now, that is our argument in a nutshell. And, the client's argument is in the posts above. We have been an advertiser on MajorWager.com since it opened. We have always trusted in The Major and believed in his judgment. For this reason, and to draw a conclusion to this argument so that we can enjoy the basketball at hand, we appeal to The Major.

Major, you have the facts from both sides. Please make a determination (arbitration) and we will live by it. Once The Major has decided, I suggest that The Major lock up this thread and both parties (client and Dalton) live by the decision without further discussion. If The Major says, "Dalton give the guy the bonus" - I will give him the bonus. If The Major says, "Dalton give the guy a refund without penalty" - I will give him a refund without penalty.

So, Major, what should we do?

The Major, proprietor of the forum, concluded that “100% sure this guy was made aware of the fact the he would get no more bonus. IMO, he should get no refund. IMO, he tried to bamboozle the clerk. The clerk screwed up. [...] I would send his money back and pay for it to get to him with no bonus (simply out of goodwill, not because you need to)”. There were no further posts on this dispute.

In this dispute, significance arises from the fact that despite the majority of players arguing in favour of the player, the mediator (and a few experienced players) argued the other side, which, while weakening the coherence evident in the MyBookie dispute, enabled resolution in the operators favour without ongoing damage to the operator’s reputation. One interesting observation from the years I have been observing this industry is that, like many other industries, players adopt an “Us vs. The World” approach, one in which the customer is never wrong – whereas reality is often quite different. It is for this reason (amongst others) that you cannot simply have the community opinion be the arbitrator of disputes, but rather need a mediator with a degree of impartiality and knowledge of both sides of an issue.

Again, these are but two examples. There are literally hundreds over the course of the last 10+ years, and it is not feasible to present them all. Rather, they are included here as a brief demonstration of the process typically followed in mediating such disputes.

167

Sportsbooks ignoring verdicts: BCN Sportsbook Forums were not able to negotiate an acceptable solution in all cases. Indeed, there were several where near-universal agreement existed, but the sportsbook refused to honour the decision.

In July of 2005, several players placed futures wagers (wagers which were to be decided a reasonable time into the future) on the Oakland Athletics to win the American League at 100/1, and to win the World Series at 200/1. These lines were out of line with the market, however, as discussed earlier, that alone is not enough to make it voidable, per industry norms. What had happened in this case was Oakland went on a winning streak through July, increasing their chances of winning, and BCN’s staff had failed to update their odds (probably because futures markets do not traditionally attract substantial volume at recreational bookmakers).

A long time RX poster, who uses the handle Kermit, offers the following account (in TheRX, 2005c):

So on Saturday afternoon, I started to put some small wagers on both options. Betting on futures has always been one of my specialties. My total wagers on both of these options was $110 on A's at 100/1 to win the Pennant and $100 on A's at 200/1 to win the World Series. We must remember that the A's were about 7 games back on Saturday and also 2 1/2 games back in the wild card with about 5 teams fighting for the wild card.

I told Red Eye about this on Sunday and I think He joined late Sunday using me as a referral. On Monday afternoon I noticed that the odds on the A's to win the Pennant had dropped to 90/1 so I decided to put another $100 on this wager for my final bet. Next thing I knew they had again changed the odds to 70/1 but I thought to myself that I have my $$ down so I will wager no more.

However late on Monday I noticed that all my A's wagers were canceled without even notifying me.

Over 13 pages of discussion on TheRX alone, and in numerous other discussions elsewhere, the issue was hotly debated, with many posters calling for TheRX to remove promotional materials for the sportsbooks (seen as the ultimate statement – forfeiting sponsorship money because the book was rogue). Kojak, another long-time poster, commented:

The Rx is here to protect gamblers from shoddy operations like BCN. That is why we have books rated and relationships to work out disputes. Regardless of BCN's position, the biggest

168

problem I have is their unwillingness to negotiate on the wager crisis and their lackadaisical attitude to a site that promotes offshore sportsbooks and brings them in business. With this being their attitude, regardless if they have a change of mind after reading this thread, we need to take a hard line approach and make example of them by taking down their banner and stop promoting them. This is the only recourse betters have against these type of operations. When you send them money they are more than happy to take it but when it comes to honoring wagers on lines that they are responsible for posting and monitoring , the mistake falls on them and better should not suffer. That is their problem! It would be like me with my business accepting a credit card,check,or cash and not delivering on the product purchased. Regulated in CR or not regulated, this is fraud and we all stand together accordingly.

Unlike the prior disputes, BCN opted not to make a public statement, although their position was communicated through poster Jacksorbetter:

I spoke with Eric at BCN tonight. He states that the 100-1 was a bad line in that it should have been 10-1 but they added another 0 by accident. This does not explain how it moved to 90-1 or the odds to win the series was 200-1. Did they add an extra 0 every time. He seriously thinks Red Eye, Kermit, Frog and even Fishhead are in this together trying to scam them. He states they are not re-upping their advertising here so he felt these guys are trying to threaten them by going public on the RX on an obviously bad line.

At the time, MajorWager and TheRX were competing sites in what was a competitive market (gambling forums), and disputes often involved a lot of back and forth between the staff of the two sites; that was also the case in this one as Majorwager (who also had BCN as a sponsor, for a longer time) accused TheRX of questionably motivation in pursuing the dispute as BCN’s sponsorship of the forum came to an end. Again that is not overly significant here as, after a few days of back and forth, posters on both sites, and eventually staff on both sides, agreed the player should be paid, with The Major (in TheRX, 2005c) posting “My opinion on this case is that if the line was clearly a clerical error then the book can reasonably cancel the plays. If the line was due to "sleeping at the wheel" then the book is obligated to honoring the wagers.”

BCN posted, at Majorwager (2005), that “BCN Sports has decided that we were well within our rights to have cancelled the wagers and stand by this decision. We feel we are a great book for the casual bettor and have never had a slow pay or no pay issue and offer outstanding customer service.” What

169 followed at MajorWager was a debate over whether they should continue advertising BCN, while TheRX (2005c) reflected on the role of the site, with head moderator, Wilheim, posting that:

the word watchdog is a bit inaccurate when describing The Rx. we are an information site, a discussion site, and also a place on the internet where offshore players can find help with sportsbook disputes. Do we go out go out and rate sportsbooks like some other sites do (Rx. Sportsbook URL aside) no we do not. We also do not have the power to make any book captitulate in a dispute if they do not want to, we can only try to negotiate in good faith. I don't know of anywhere on the site where it says "watchdog". Bottom line The Rx. is not the internet sportsbook police. We offer a forum open to posters to exchange ideas about gambling, and at times other topics. We will always try to help posters when asked though.

This case, though not apparent at the time, proved to be something of a watermark. As poster Chuck Sims notes in the follow-up: “But I see a downturn in both(MW) sites as of late. SHRINK had a lot of power it seems. I mean he gets a guy paid his 85k and now we cant get a couple of small bets that probably wouldn’t win reinstated”. What this dispute also serves to highlight is the lack of other remedies. Even where the dispute resolution mechanisms in place on community supported sites failed, there was no mention of suing the book in their home jurisdiction. Players realised that the geographic disparity, and the regimes within which these books operated, made such considerations futile.

It was around this time that SBR gained more prominence in the market, and with their position of not taking direct sponsorship (although many links on the sites were affiliate links) were able to gain separation from forums such as TheRX, Majorwager (and later EOG and others). At this time, SBR had rated BCN “D” – meaning not recommended – and indeed BCN’s customer base came primarily from the forums at which they advertised.

Bet Millenium A second example of a case that failed to be resolved was the June 2006 dispute between a forum poster using the handle Artie, and the sportsbook Bet Millenium, part of the BetOnSports group, which, as discussed above, eventually fell to US authorities. The case was discussed on several forums, including TheRX, MajorWager, SportsbookReview and Eye on Gambling (EOG), which was at the time newly launched and operated by former TheRX operators Shrink and The General. At this time there were many issues between the forums and their staff regarding the theft of membership lists, competition for sponsorship and so forth, and much of that played out in this case with operators all trying to stake a claim to the mediation role.

170

The facts of the case, as recognised by both parties, are that a player (Artie) had deposited and lost in the region of $23,000 USD over the course of 3 weeks, receiving 40-50% bonuses on each deposit (not unusual at the time for a losing player). On the deposit in dispute, he loaded the account with $3,000, and received a 40% bonus of $1,200. He placed a large winning wager, bringing his account to just under $11,000, at which time Millenium closed his account. They refunded the deposit, plus what the player (SBRForum, 2006) termed “a small percentage of [his] winning”, and ‘confiscated’ the rest, totalling “about $4,500”. The dispute was further complicated as the player was also betting at the parent company, BetOnSports.

BetOnSports, in response, stated that (in SBRForum 2006) the client agreed to their terms of service on registering at the site, which included terms indicating that they may "void any transaction where individuals are suspected of acting in conspiracy or concert.” Though they did not provide an explanation of how the player breached this rule, and indeed in subsequent discussion the legitimacy of a term requiring only “suspicion” was much debated. In addition, the way in which they continually plied the player with bonuses over a substantial period of time makes it questionable the extent to which they could have considered him a syndicate.

The player went, in the first instance, to SBR, in early June, however, they were unable to reach a quick conclusion and, growing impatient, the player posted his case on the SBR forum on June 9. SBR indicated that they still hoped to resolve the dispute, however, it spread quickly to the competing forums and (at the time) TheRX head moderator, Wilheim, intervened to try and reach a resolution – Millenium were at the time a sponsor at TheRX. Wilheim, having spoken to BetMillenium, posted that their position was “there is evidence of two players acting in concert (one is Artie)” and stated that (in TheRX, 2006):

After much discussion I recieved the final position from BOS regarding Artie's dispute with BetMill. I want to say that I strongly advised BOS management that there was room to argue that Artie is not a syndicate player or a gambling syndicate but they ruled that his betting pattern indicated that he is. Rx. management is dissappointed that this dispute did not turn out differently but (to answer future inquires) will not be removing BOS or BetMill as advertisers over this ruling. That is a firm Rx. management decision.

While the dispute went back and forth over a number of forums, and BetMillenium continued to “review their decision”, ultimately they did not pay the player, despite overwhelming pressure from both mediators and posting bodies, a decision which was not penalised by the forums they sponsored. Ultimately, BOS suggested the players take their case to IBAS, though refused to detail

171 the allegations against the players, telling SBR that they “found more information but can't say what it is because of privacy”. It would appear that BetOnSports went out of business before a decision was rendered.

The failure of BetOnSports had far more to do with United States arrests of their principals than with this dispute, but this serves to demonstrate how even with an operator located in a jurisdiction (UK), which US customers may hold in higher regard than that of Costa Rica, the customer felt that they were more likely to receive restitution through mediators such as Sportsbook Review and TheRX than through formal arbitration services such as IBAS. Additionally, this highlights one of the prominent causes of disputes: different interpretations of rules and terms of service, and the conflict of interest that arises from having an operator sponsor a forum or other platform in which mediation is offered.

It is worth noting that in all of these disputes the process is quite similar. A forum member (or an industry participant joining the forum to post the dispute), after failing to resolve the dispute with the customer service department of the provider, decides to either (a) post the dispute on the forum, making his side of the case public and inviting responses, or (b) contacts a staff member of the forum to investigate the dispute on their behalf. Should they do (b), in a number of cases the dispute would be resolved successfully behind the scenes. If success were not immediately forthcoming then either the poster or forum operator would take the dispute down the former path, laying out their perspective on the forum for all to see.

What follows is a public analysis of the case, taking feedback from the dispute originator, site staff, and other community members (and in some cases other so-called ‘watchdogs’ who post at multiple forums as well as their own) and, eventually, a representative of the company with whom the dispute exists – either directly or through an intermediary. This would normally begin with the company stating their perspective, alleging some wrong-doing on behalf of the claimant or reason for non-payment (such as processor difficulties), followed by an examination of both perspectives by the community-at-large, before one of the senior moderators assigned to the dispute, or, in some cases, the site owner, steps in with a summation and recommendation, one usually formed through considering both the public debate and the behind-the-scenes negotiations between the two parties.

Summary One cautionary tale that emerges from forum mediated disputes is that having a number of different mediation options, especially where some of those have advertising or sponsorship relations with the companies involved in the dispute, can be problematic. If just one party with a reputation as a

172 mediator can be convinced through advertising revenue to argue against the majority, the power of that site can act as a detriment to a decision being reached and implemented. Ultimately, it was to prove beneficial to have an industry standard that participants respected, even if they disagreed with it.

The power relationships here are also worthy of note. I have discussed above how the operators of the sites did not always view their role as a watchdog, though even that was not a universal understanding. For example, a September 2005 article on the MajorWager.com site states “Russ Hawkins, at 39, is the President and CEO of arguably one the most successful and respected online gaming watchdog sites, MajorWager”. TOW, in several press releases, states that “The Offshore Wire prides itself on being a player-driven watchdog website“, and, similarly, former EOG and TheRX owner Ken Weitzener described himself as “owner and operator of EOG a website serving as a watchdog for the online gaming industry” in 2009 press releases. For many years it seems to have been a term utilised when it suited the purposes of the site (such as for promotion), but disowned when they wanted to continue accepting advertising revenue from operators who ignored their decisions.

Similarly, I have quoted above several examples of sportsbook operators discussing the role these sites played in the industry. There are examples where the operators commend the forums for holding operators to a “set of standards”, and others where they are keen to argue and demonstrate that they hold no formal role and have no obligation to follow their decisions. Equally, there are cases where they invite a mediator to make a decision and others where the mediator chooses to intervene at the behest of the player. Again this can be problematic; of course an operator is to encourage mediation where they feel they have a good case, but where they are in the wrong it would often be more financially sound to carry on regardless.

What is not considered as much above is the perspective of the players. During the early stage of the industry, especially during the era in which The Shrink and The General were operating TheRX, and the industry was extremely competitive, players generally felt secure that playing at books recommended by these forums would mean you had some form of protection were there to be a dispute (though, even at this stage, players realised that if the book simply ran out of money there was little or no recourse, regardless of mediator influence).

As the industry struggled, in large part due to US regulatory efforts, the market became less profitable for both providers and those hosting community services reliant on advertising, such as in forums. This led to a dual-effect whereby sportsbooks were increasingly alert to attempts to take

173 advantage of their offerings and needed to cut out this type of action to maintain their bottom line, with the associated knock-on to what we might term marginal or advantage gambling cases (such as the ‘bonus hunting’ described above). Similarly, forum and portal operators were increasingly reliant on revenue from books other than the elite, and were loathe to criticise (or, increasingly, to allow public criticism) of them for fear of losing a revenue source.

Highlighting this, following the 2005 BCN Sportsbook dispute above, long-time member oldmanTED posted that (in TheRX, 2005c):

As difficult as it may be for us to accept what has occured in this particular case, Wil has succinctly described the role of the RX. Perhaps we have mistakenly always thought of these sites as "watchdogs" and that our funds might somehow be protected from unscruptulous books, but that is simply not the case. No doubt the moderators of this site will do their very best to resolve disputes for their members, and Fish tried his best, but in the end, whether a book that advertises here or not decides not to pay, there is little more that the RX can do.

He went on to comment that, “As posters, we have the power, through our actions and words, to directly affect the future funding of any book and should exercise that power whenever needed”. Whereas, until this point, posters had felt protected by the forums that took on the role of recommending books and mediating disputes, they were increasingly coming to realise that they were not the solution, and that industry participants themselves would have to police the industry. It is this mentality that SportsbookReview were to tap into. By adopting a unique position where they stood apart from those forums openly accepting advertising (although SBR did feature affiliate links for sportsbooks, from which they would receive a proportion of revenue from new accounts), they were able to establish a singular, powerful voice that, when a statement regarding a downgrade or dispute arose, industry participants listened to, and parroted around, the wider community. However, we should not ignore the many successes of this forum mediation, and the particular industry shape in which it was successful. Where the industry was large enough that the forums could operate independently (through external revenue, or through only accepting sponsorship from operations that allowed them to mediate), it was an extremely successful form of mediation.

As the industry faltered and the sites became reliant on those operators remaining for income, the competing interests became too much and decreased both their reputation and their impact on the industry. Indeed, in response to the Millenium dispute discussed above, Wilheim (then head moderator of TheRX) stated (in TheRX, 2006b), “I would encourage players to take advantage of the ratings used by SBR and know full well some of their ratings are less than flattering when it comes to

174 some Rx. advertisers. Does that cause this site to lose creditability? Perhaps it does but that is a matter of opinion and quite frankly the cost of doing business today.”

These factors all have significant impact on the shape of a regulator for contemporary online environments. Having multiple mediators spread across disparate community forums would certainly provide players with options, however, the competing mediation and norms amongst those mediators may, if the offshore industry is any guide, prove problematic. Similarly, the funding of any mediator must be considered, with attention given to potential biases introduced through a reliance on industry funding or relationships.

Forum Supported Failures: Aces Gold There is perhaps no better example of this loss of trust in forum-based mediation than promoted sportsbooks who failed. Aces Gold was a sportsbook, again heavily promoted on forums, which operated from the mid 1990s through to 2002. They were a low juice bookmaker (i.e., they charged less than the standard 10%) that frequently offered better odds on one side of a market, reflecting their own internal opinion on the outcome of an event. Prior to the 2002 Superbowl, with Aces Gold running up debts, the operator, Charlie Therwhanger, decided to make what was to become their last stand on the Superbowl.

With the line at New England +14 over St Louis, Therwhanger put up a market of New England +14.5, thus ensuring that everybody who wanted to bet on New England (along with assorted professional players looking for arbitrage opportunities) would place it with him and that he would get minimal action on St Louis. So it was, and by 18:40 on February 3 New England had won the Superbowl outright, 20-17, and Aces Gold were starting to pack up their operation. Officially, Aces Gold closed on February 15, and their principals left Curacao with approximately US$5m owed to players.

In February, Majorwager, one of the forums promoting Aces Gold announced (in MajorWager, 2002) that “[we] feel that Aces Gold will do just fine in their restructuring of both Aces Gold and Sports Market. [...] Aces Gold has our recommendation and security through this transition period”. The majority of players were never paid, and indeed this preceded the collapse of a number of bookmakers as players withdrew their funds to safe-haven established operations –highlighting the importance of having somebody to evaluate a books procedures and stability.

The significance of the case comes from warning signs that provided guidance on the future ranking of other operations, and from the attention it placed on the role of forums and other operations in disseminating information and advance warnings about sportsbook operations.

175

The failure of operators such as Aces Gold, as well as operators such as BetPanam, a book heavily promoted by then-TheRX principal and founder Ken Weitzner (now deceased) at the start of the 2003 American Football season, who closed operations and were unable to pay players following the February 2004 Superbowl, was one of several such promoted operators to fail, and, as I will discuss subsequently, led to the decreasing trust in forum-based mediation. While SBR now both takes advertising and receives revenue from affiliate deals, the lack of direct advertising can be linked to their early rise in the process of mediating disputes.

6.5 Arbitration & Mediation Panels In addition to the forums, there was one other short-lived attempt at mediation that, at least to this observer, promised much but was ultimately brought down by one landmark case. In August 2005, TOW (TheOffshoreWire) launched an arbitration panel. While MajorWager has had a ‘mediation panel’ established since at least 2001, it has (to this day) only heard one documented case (in 2001), with the main impediment being that, in the words of Majorwager moderator Minnow (in Majorwager, 2003), “most people come straight to the forums and post their side of the story, instead of contacting the Major or the Devil for an "official" mediation”

Shortly after the TOW announcement in 2005, MajorWager re-announced their panel with two new members, and in both cases the panels were made up of long-time posters with experience of one or both sides of the operation (i.e., they were experienced gamblers and/or experienced sportsbook operators). The TOW panel heard three cases, with the final one (involving an industry leading sportsbook) sounding the death knell for the concept. The format of these arbitrations required the complainant (in practice, always the player) to submit their case to the site hosting the arbitration panel, usually through a submission form. The MajorWager panel required that the case not be discussed in public prior to arbitration, while TheOffshoreWire invoked their arbitration panel in both private and already public disputes. The MajorWager panel, in their only ruling (Majorwager, 2001), discuss the process as such:

Player called Book on Monday to dispute their canceling his bet. They were not able to come to an agreement. He informed them that he intended to take the dispute to Major Wager for mediation.

Over the subsequent weeks, both Player and Book relayed their versions of events to The Major via E-mail. The Major passed these E-mails on to the Board. The Board has also spoken at length by phone to both Player and Book.

176

Once the complaint was registered, the panel asked questions to both parties involved in the dispute, often going back and forth as required, and eventually published an opinion, in much the same style as a court decision – and notably carrying far more detail than the typical write up by forum moderators or even Sportsbook Review. There was, at the time, concern over how much information should be made public. Just as I discussed in the case CCP, makers of EVE Online, in Chapter 5, there were concerns from the sportsbooks that detailing their security would lead to an increased risk of fraud. Similarly, players who had conducted substantial research to find weak markets or correlations that allowed them to profit from the sportsbooks did not want that information exposed to everybody who happened to read the panel ruling.

The 2001 ruling from MajorWager runs to some 6,298 words. In essence, it is a case of a miscommunication between an allegedly new player and a sportsbooks wagering clerk, in which the player wanted to make a bet conditional on his deposit being successfully received while the clerk thought they wanted to place a bet conditional on the result of a previous bet (which was actually the exact same bet they wanted to make – a 100% correlation that would make the bet invalid under any regime or norm). The book argued that the player was a “problem customer”, disputed that they was a newcomer and therefore argued that the bets were invalid for reasons of correlation and insufficient funds, and that “The wagering clerk was new and simply made honest mistakes. Book is not obligated to pay a bet that was so clearly accepted in error, for reasons analogous to why sportsbooks are not bound to honor bets placed on obviously bad lines”.

The panel, after much analysis, ruled that the book should be liable for the bet. They also ruled on a second related issue that the book owed a further $100 in bonus funds. In short, this was a complete victory for the player.

The 2005 TheOffshoreWire rulings took a slightly different form, in part to address the concern over releasing details which may be detrimental to either the player or operator. In discussion of the first ruling, panel member Halifax outlined (in TheRX, 2005d) the reason for a short ruling:

I think that in cases involving potential "scams", "chargebacks", etc. allegedly being run by the player, that we usually will not post many of the details of the case, for several reasons, not the least of which is that we don't want to lay out a road map of how to attempt a scam.

In other cases, such as bet disputes, bet voidances, and things along those lines, you can expect a more in-depth write-up ... so if we were to look at cases such as the BCN case with the A's futures being cancelled, the Olympic F-1 bets being cancelled, BetUs voiding the

177

Match Play moneyline win of MyFootballGame, Areef's tennis bet being cancelled at Casablanca, etc. ... you could expect to see a much more thorough explanation of "Why" we made a particular decision.

The first two cases decided by the TOW panel were relatively simple. The first was a relatively clear case of a player trying to defraud Sportsbook.com, registering an account as an 18-year old female from the same address as a player who had previously charged back a deposit and betting the full account on a single wager. As mentioned above, the panel didn’t go into great detail, simply issuing a ruling that "After examining the information available to us, and taking into consideration various factors, the panel has determined that the actions taken by Sportsbook.com in this case are justified. For the record, this verdict was reached with a unanimous 3-0 decision.”

The second case involved a poker player playing at one of the largest offshore sites at the time, Bodog. In this case, the player raising the dispute (using the handle jim827) ‘won’ a substantial amount of funds at Bodog, which they refused to pay. On investigating the case, Bodog provided hand histories to the panel which showed (TheRX, 2005e) “highly suspicious behaviour in at least 1 and probably 2 cases”, showed a group of players logging in and out at similar times, the other players in the group losing most of their bankroll to jim827 and then charging back the deposits through their payment provider. The panel ultimately ruled, “the actions (confiscation of full account balance less the amount already paid to the player) taken by Bodog.com in this case are justified. For the record, this verdict was reached with a unanimous 3-0 decision.” So, in both the first two cases considered by the TOW panel, they ruled in favour of the sportsbook.

The third and final case heard by the panel was a dispute that had been running for several weeks, and on which other sites had attempted mediation previously. It is also a fascinating and complicated dispute, surrounding the 2005 US Grand Prix, in which due to issues of tyre safety a large proportion of the field threatened to ‘retire’ from the race after the parade lap and before the lights went on to start the race. This was known in advance; however, Olympic continued to list odds based on 20 drivers starting the race. Approximately 4 hours before the race, the player placed wagers on 4 individual drivers, at high odds, to finish in the top 8. Fourteen drivers retired on the first lap, leaving 6 remaining and making the top-8 bets automatic winners. It was unknown until race time whether accommodation would be made to allow the drivers to race.

Olympic voided all wagers on this market, claiming (in TheRX, 2005f) a term that stated “the start of the race is defined to be when the first car/bike crosses the start/finish line when the start of the race is officially signified”, which meant that there were not 8 legal runners in the market, and as

178 such the market was void. Per the panel ruling, “After much private, and some public, discussion, Player and Olympic agreed to submit the dispute to this Dispute Arbitration Panel.”, with Olympic stating that they would be "favorably reviewing the panel's ruling and its final recommendations” The panel itself was split by a 2-1 ruling (and with a supporting opinion by an alternativee), and ruled in favour of the player after much analysis. The pertinent part of the ruling stating:

This decision is not a finding of fault or malice on the part of Olympic. This Panel does not find that Olympic has acted maliciously or arbitrarily in this case, but only that its grading decision was erroneous. We recognize that this was a somewhat unusual situation with varying opinions (even among this panel). Nonetheless, the opinion of the majority of this Panel is clear – the event should be graded as “action” and wagers on those drivers awarded 1 through 6 finishing position points should be paid accordingly. As in past and future cases presented to this Panel, it is expected that all parties will comply with the decision of this Panel.

Ultimately, Olympic refused to comply with the ruling. This was much debated in the community, with some arguing that it would reflect badly on the sportsbook, while others, such as JoeyD (in TheRX, 2005f), posted comments such as: “TOW thinks he should get paid. Big deal. TOW doesnt own Olympic, they cant make them pay. the whole panel is a waste of time”, and the lack of impact of the panel was emphasised as forums refused to let the decision have an impact on their advertising. Wilheim, of TheRX, posted (in TheRX, 2005g) shortly after the panel ruling:

You volunteered to drop the case if you lost and that is admirable. Olympic will continue to be a preferred advertiser here just as they continue to be a preferred sportsbook everywhere you look on the sports betting internet scene. This case has been rehashed many times and still continues to split opinions as to what the right course is for Olympic to follow. It was extremely unfortunate for yourself and also for Olympic that the events that led to this impasse occurred the way they did.

I very much hoped this would have ended differently, from what I can see no one came out the winner here, including yourself, Olympic, the TOW panel, or The Rx.

This was, perhaps unsurprisingly, the last case put forward to the panel. However, in the short time this method was used it did establish, in writing, many of the norms that had existed to that date and continue to be used in mediation today.

179

Ultimately, the major issue was the non-binding nature of the mediation, combined with the unwillingness of the major forums to persuade the operator to abide by the ruling through the pressure they had exerted in other disputes. Despite early optimism, the state of the industry, both in terms of power relationship and fragmentation, limited the success. During the formation process, long-time community member Uncle B (in PeepsPlace, 2005) noted that “there will be books, and players, that refuse to cooperate, but [...] at least the 'viewing public' will be able to form a better opinion on some books based on these 'dispute' results...However they come about. A book 'refusing' to cooperate with the panel, could tell the story itself”.

Similarly, Roberto, proprietor of TOW, stated that (in TheRX, 2005h), “The idea of an independent arbitration panel has a major weakness and a tremendous strenght [sic]. The weakness is that, as an independent body acting within an unregulated environment, its rulings are morally and ethically, but not legally, binding. The strenght [sic] resides in its status of independent body; therefore the actions that may lead to the non voluntary abidance to its rulings can, and are, embraced by more portals and sites.”

While the industry was strong, and the forums were the primary means by which players were aware of bookmakers, the forums were in a position to make binding arbitration a condition of advertising – and to have a material impact on the company’s business. In essence, the forums were the market. As the industry weakened, the player base became more diverse and forums became reliant on books advertising to survive, forum operators influence weakened and the power balance shifted decisively in favour of the operator. As I consider the applicability of this regulatory approach for contemporary environments, in Chapter 7, it is important to consider funding models that might be appropriate to sustain such a mediator and the implications of a reliance on industry funding.

Sportsbook Review also had a position on these panels, which foreshadowed in many ways what was to follow. They contended that the mediation panel was superfluous for many of the disputes that arose in the industry; many, in fact, could easily be settled behind the scenes while only those complex cases needed the public scrutiny that a mediation ruling brought. Specifically, they refer to the BCN example discussed above in stating (in PeepsPlace, 2005):

So few of these disputes would/should go to mediation.

For example, no way is BCN going to go when it is clear they will lose. We have seen a couple lately like the Royal Sports scammer who would go just to kill time.

I guess what I'm saying is there are very few grey cases. Through the years I can think of a few:

Securebuxx collapse - player at gameday deposits 1k in SBUX money makes a 1 dime play and

180

requests a payout the same day. Player had ties to SBUX principals. Next day the world is told SBUX is broke and that many people were scamming books with worthless SBUX credits issued by SBUX owners.

Royal Sports - would not pay a player his profits because of a charge back he did at another book (not any at royal or in the royal family). The book accepted his deposits and took his action for months without any problems. The player sued, this lawsuit may still be going on.

These are basically policy making and precedent setting cases. They are difficult and complicated. Most are not.

6.6 Sportsbook Review While the forums are still occasionally used, generally for books from which they accept advertising, mediation panels have proven to be unsuccessful. By contrast, Sportsbook Review is still successfully mediating disputes to this day. Through the above examples, and the commentary offered by platform owners and industry participants, it is clear that SBR have a deferential position in the industry.

The format disputes at Sportsbook Review take has varied over the last decade. The majority take the form of behind-the-scenes negotiation, with a player filing a complaint (via e-mail) with one of the mediators, who then contacts the sportsbook behind the scenes in an attempt to get it resolved. Sometimes cooperation comes in the interests of fairness, although always overhanging this is the risk of negative publicity should the dispute not be resolved.

Other disputes get brought into the public immediately by use of the industry discussion forums, either at Sportsbook Review (SBRForum.com launched in 2005) or forums such as TheRX and MajorWager, which I have discussed previously, and such tend to play out with slightly more information made public.

It seems generally accepted that both sides benefit from a more private system. From the players’ perspective, the player gets to have the issue go through a formal process, and by having the dispute handled behind the scenes it generally avoids the risk of having his entire history exposed on discussion forums and his betting types made public (for example, disclosure that somebody is a +EV – positive expectation or winning – bettor), which would come with considerable downsides to the players future profitability.

Similarly, the book manages to avoid negative publicity (disputes aired in industry forums have previously been demonstrated to cause a rush of withdrawals), and have the ability to have cases considered by ‘experts’ in the field. Such considerations occasionally also provide them with a measure of free consultancy; for example, whether their promotions will cost them too much money

181 in the long term, whether their odds are competitive, and so forth, meaning they have the ability to adjust internal practices before sustaining significant financial loss.

There are some issues with such an approach, and the most notable is that the pressure of negative public disclosure on a website such as Casinomeister and SportsBookReview is significant to an offshore operator, meaning they are frequently at risk of coercion. A large number of disputes that are brought against sites, both publically and privately, are unwarranted and are often the case of a player attempting to exploit a book in breach of its rules, followed by an attempt to extort them on the forums. A few of these have been successful and only subsequently exposed once the player attempted the same scam on a different operator.

The other notable negative is that players, when losing a dispute, inevitably highlight the cooperation between the mediating website and the company in question. One recent example comes in the dispute now called “Roth vs. Easystreetsports.com et al”, which was filed with the District Courts in Colorado, USA, apparently with financial backing from Sportsbook Review. In this case, a player played allegedly perfect for 499 minutes (8.3 hours) at the rate of 1,053 hands per hour. Easystreet, and TheRx (a website who Easystreet pay for advertising) concluded that these hands were played illegitimately, likely with an automated bot, in breach of their rules, and refused to pay – a decision supported by several with knowledge of the situation, but fiercely opposed by others, including Sportsbook Review.

The conclusions of the mediation and investigation drew ire from a number of other sources, including WizardofOdds and SportsBookReview, who argued that evidence against the player was insufficient to confiscate his funds (Shackleford, 2011). The player, in response to this, embarked on a campaign to criticise EasyStreet daily on a number of other sports gambling forums (he was banned from TheRX), while simultaneously launching a lawsuit seeking significant damages and the transfer of property (domain names) belonging to both EasyStreet and TheRX (as, he claims, an uninvited mediator – a fact disputed by TheRX).

Such an example highlights the complications that arise from a lack of transparency. Even if an issue is fairly dealt with, it is possible for the community to draw quite different conclusions. As Ostrom et al. (2011) argue, “to make both system users and officials accountable for the collective good of effective intervention, it is important that the intervention be designed and implemented in a transparent manner. Transparency not only facilitates monitoring but, more importantly, helps generate and sustain a common cause” (p. 9).

182

In short, disputes in unregulated industries are almost inevitably messy. Simple cases can often be handled behind the scenes, with the mediation of experienced industry figures able to reach out to both players and management to resolve disputes when customer service departments were unable to. However, more complicated disputes will normally find their way to the forums, and in these cases the additional transparency which comes with forum discussions can prove positive or negative for both the player and the sportsbook, however at this stage the potential of overwhelming public opinion is the only recourse available to the player.

For each of the sites discussed above, the basic process of becoming a mediator was the same. Utilizing industry contacts, books were able to get customers paid who otherwise had no recourse; the grateful customer then acclaimed the success on public forums, and so gradually the mediator was able to build up their reputation and ability to intervene. Eventually, disputes arose in which they were not able to have the customer paid, and their credibility dropped accordingly. Sometimes, this occurred even when many thought they reached the right verdict, such was the underlying mentality and risk of being seen to favour operators from whom advertising was accepted.

Evolution of Sportsbook Review It is informative to briefly consider the evolution of Sportsbook Review. In 2002, as the site was launching, it contained a one line ordered list of bulletins, and significantly did not accept advertising from sportsbooks, which was the case until approximately 2008, although they did receive funding through the affiliate links applied to sportsbook names throughout the site.

183

2012

2003

While many changes occurred over the years, including the launch of ratings, blacklists, forums (with community participation rewards), video channels and indeed its own casino and sportsbooks that utilise the community reward currency, SBR points, the fundamental aspect of the site has not changed: short, 1-2 line summaries of disputes between players and sportsbooks with an offer to intervene in disputes.

The process has also changed little: players submit a dispute to the site, SBR staff attempt to mediate a solution and, if newsworthy, a snippet is placed on the front page. With the advent of the Sportsbook Review forum the public has taken a greater role in this process, with SBR staff occasionally placing a bare-bones version of the facts of a dispute on the forum for more complex disputes, and, as with the forum mediation discussed above, players frequently becoming impatient and placing the dispute into the public domain either in the first-instance or during the mediation process. SBR will often offer extended commentary on significant cases – either through the website, videos or the forum – while many are simply settled behind-the-scenes, in accordance with past precedents.

184

There is, even with SBR, continued controversy on the forums surrounding the news items that are given prominence, and potential biases (as seen in the Cory Roth case discussed above), especially since SBR began accepting more blatant advertising. However, they do remain the choice for the vast majority of players attempting to mediate sportsbook disputes.

One substantial advantage for SBR is the willingness of readers to disseminate their stories and judgments through other avenues. Such a mode of regulation can only work if the information is spread to those likely to use the platform, and the inter-forum politics and general lack of reach beyond a small community limited the impact of forum mediation. While the arbitration panels were posted on most of the major forums, the lack of buy-in from operators and the unwillingness of the forums to act by removing advertising again limited the impact.

6.7 Types of Dispute It is also informative, particularly when attempting to apply this form of participant-driven regulation to other environments, to consider the type of disputes it has successfully mediated, and the methodology followed for achieving resolution. While it is often the case that little can be done when a book does not have the funds to pay customers, there are other cases where an intermediary is useful – those where a sportsbook does not follow its own rules, or those rules are manifestly unfair, or the way a rule is implemented is out of line with industry norms. I will briefly outline a range of disputes, with brief exemplars, from the past decade.

Bet Cancellation In February 2008, a player at Betway sportsbook (now regulated in Denmark and operating under a recommendation from eCOGRA – eCommerce Online Gambling Regulation and Assurance) placed a bet on a sporting event in excess of Betway’s posted limits. As per protocol, this bet was passed to the company’s traders to accept or decline. Betway, in conversation with SportsBookReview, stated that they chose not to accept the bet; however, due to “some technical error” the player’s stake was not refunded until the event had completed. The player argued that, per SBR (in SBRForum, 2008), “regardless of the book's intentions, failure to notify him that the bet was not pending as shown cost him a winning bet that he would have placed at a different bookmaker”.

Shortly after the dispute was registered, the bookmaker added a rule to their Terms of Service, stating, “Betway.com reserves the right to refuse the whole or part of any bet and to make ambiguous bets void. No bets will unreasonably be declared void", which led to a substantive debate on Sportsbook Review forums over the definition of ‘unreasonable’. Some weeks later, following discussions with Sportsbook Review, Betway decided to pay the player in this dispute, as well as a

185 second player who had registered an almost identical dispute. This dispute serves to highlight the significance of Terms of Service and community norms – in this case that a bet should be voided prior to the match if it is not valid – as a factor in dispute resolution.

Bad Lines Between November and December 2011, a number of players reported cases of bets being voided on TitanBet, a bookmaker targeting the UK & European markets, but regulated in Antigua (by the Antigua and Barbuda Financial Services Regulatory Commission). Significantly, TitanBet make no attempt to submit to UK jurisdiction, rendering the UK Gambling Commission and IBAS (Independent Betting Arbitration Service) redundant, despite the focus on UK customers.

The voided bets had a common theme; they were bets placed by players shortly before the odds moved. Like the stock exchange, odds on sporting events are constantly shifting, and the current odds represent the market’s best estimation of the outcome (whether a team will win in comparison to whether a company will show profits). Thus, placing bets based on better information obtained from other bookmakers can be a profitable strategy, and means the bookmaker taking those bets finds themselves potentially in a negative equity position vis-a-vis the market.

Sportsbook Review reports that TitanBet refused to discuss the details of the complaints (numbering at least 8) with them under the terms of the privacy policy; however, they proceeded to give the issue prominence through their website, forums and other venues (including a video explanation of the dispute uploaded to YouTube) – significant when you consider that SportsbookReview is within the first 5 search results on Google for TitanBet. About 2.5 weeks after the first dispute, TitanBet began reversing these cancellations, with Sportsbook Review subsequently noting (SBR, 2011) “TitanBet agreed to credit the players and vowed to revisit cases where SBR agreed that wager cancellations were unjust”

This type of dispute again highlights the difficulty in formulating rules and terms of service in these types of environment. It would be incredibly problematic to have in place a rule that says ‘bets made prior to a line change’ would be voided, as you could not reasonably expect recreational players to be aware of market changes, and thus the malleability of terms of service and community norms must be placed at the discretion of those tasked with dispute resolution. The dispute also highlights problems with mixing jurisdictions, with TitanBet claiming to be subject to privacy rules while not subject to other UK jurisdictions, such as IBAS. Such an approach makes dispute resolution more problematic, and highlights a number of the issues raised with regard to geographic disparity.

186

Botting As discussed previously, one of the more divisive cases in recent years was a series of disputes involving a player, Cory Roth, and sportsbooks, including EasyStreet, Heritage Sports, and Northbet. Roth allegedly played perfect video poker for 499 minutes (8.3 hours) at the rate of 1,053 hands per hour at Easystreet, having previously profited from playing Video Poker at Northbet, and was subsequently to repeat the feat at Heritage Sports. As indicated above, resolution in the EasyStreet case favoured the sportsbook, while in the Heritage Sports case the players’ deposits were refunded. In neither case was the player happy, and a large portion of the wider community felt the player had been wronged, but such response is, of course, not unheard of with other forms of dispute resolution.

In essence, this case came down to attempting to determine whether a player was using a bot or not, with similar challenges to those faced by CCP, which I discussed in Chapter 5. Roth won $46,000 playing at the speed above, while EasyStreet claimed, “the player's speed and accuracy of play is not humanly possible, suggesting the use of a bot, which is against casino rules, and that the player's three royal flushes in 8,762 hands suggest some kind of cheating” (Shackleford, 2011). Easystreet asked Roth to fly to Costa Rica (at their expense) and take a lie detector test. Roth refused.

Shackleford investigated, asking for an opinion from Bob Dancer, “the foremost video poker expert and player in the world”, who stated that the rate of perfect play was attainable by a few, with maintaining it for eight hours attainable by fewer. Specifically, he stated: “If you're looking at possible -- the answer is yes. If you're looking at likely, the answer is no. Could I do it? Perhaps 1 test in 5 — while I'd make a mistake or two the other four times”, though he noted specific proof of perfect play had not been provided, and argued that “Finally, I don't see why a totally a legitimate casinos prohibits bots anyway, except in live poker. Surely any has a house advantage, and is thus profitable for the casino, so bots should be welcomed. If the reason is to foil bonus abusers, the bonus policy is flawed to begin with.” (Dancer in Shackleford, 2011). Shackleford blacklisted Easystreet at Wizard of Odds, just as Sportsbook Review did.

Regardless of claims of bias, it is rarely suggested that the disputes were not investigated properly, with hours of detailed analysis of play, software and logs taking place for each dispute. However, the unwillingness of the platform operator to cooperate, other than with the site they sponsored, stymied any attempt at resolution in the EasyStreet case, while the Heritage Sports case is still being discussed at the time of writing.

This dispute, and botting disputes in general, reaffirms the factors identified from the ‘bad lines’ I considered previously. While a rule banning automation or the use of software aids would be

187 simpler to describe, it would – as described in the EasyStreet vs. Cory Roth dispute above – be equally problematic to enforce. Similarly, the information that would need to be available to make a determination on such play could not be publicly presented without compromising enforcement efforts, and so the need for some form of mediator to resolve the dispute is evident.

Grading Disputes Sporting events, and the rules that govern them, evolve gradually. Rules at gambling establishments have often lagged behind the events themselves, meaning that a new norm has had to be developed to handle a situation. One such example occurred between the 2006 and 2007 Major League Baseball seasons, when Major League Baseball declared that a game that had ended early due to rain or curfew, and was tied, could be resumed the following day (prior rules called for the game to be replayed from the start at a later date, or for the score to be reverted to that at the start of the prior inning). This should have caused rulebooks to be re-written across the industry; however, this was not always communicated to the staff making the grading decisions.

On 10 April 2007, a game between the Brewers and the Marlins was suspended in the 10th inning, and continued the following day. Sportsbook.com, as would have been correct in prior seasons, ruled all bets on the event were “no action”, or a ‘push’ (a voided bet, in which all players received their stake back). However, Sportsbook.com contained a rule that stated:

In BASEBALL, all games that go at least the full 9 innings and finish tied as a result of a suspension of player, shall be graded as push on all money line bets. However, all run line and total bets will have action. Note that this is an extremely rare occurrence. In the event of a change in Las Vegas rules, Sportsbook will adhere to the decision set forth in Las Vegas.

In this specific case, players who placed a total, or runline, bet and had their bets voided had their complaints fall on deaf ears, despite the rules clearly stating they were entitled to a payout. Eventually, on 1 May a complaint was filed with Sportsbook Review, and they issued an alert on their newswire asking for other affected parties to contact them. On 2 May, Sportsbook Review reported that Sportsbook.com had agreed to credit the players.

This dispute contributes to the significance of community norms, particularly when read with the Terms of Service. As I have described previously, different norms apply in the United Kingdom (for example) to those found in Las Vegas, and the United States more broadly. In this case, the book specifies that Las Vegas rules should apply, preventing British players from arguing for their standard.

188

Payment Disputes Even after conducting an investigation, not all disputes can be resolved; sometimes the money just does not exist. BeStake operated out of Costa Rica, targeting the European and Eastern European markets, and attracted a small number of players through targeted forum advertising after launching in March 2010.

The sportsbook was paid little attention until, in June 2010, they added a pop-up to their site advertising an “Express Withdrawal - Show me the money in 4 hours”. Players who had been experiencing withdrawal delays naturally jumped at this chance to receive their funds promptly. On clicking this link, players found their account balance set to zero and the prior account balance divided between 6 bets, which all had to win in order to receive a 15% bonus. This paid significantly worse than a parlay (a type of accumulator bet in which all legs must win for a payout to be realised) with the same winning conditions, and the bets were placed on outsiders, at bad odds (relative to the current market worth of the bets), stating that “The winner will get a withdraw after 4 hours guaranteed of the last event”.

BeStake claimed that this term was placed on their website (in the rules section, which was behind the pop-up), however, Sportsbook Review stated (in SBR, 2010) that the “BESTAKE promotion violates contract law and common sense”. BeStake, having never submitted to SBR jurisdiction, ignored the demand to cancel the bets, and the site eventually disappeared with little fanfare. Some players were able to retrieve money through the payment gateway Moneybookers; however, the majority of the funds were simply lost.

As McGinty (2003) comments, “if operators fail to properly credit gamblers’ accounts little can be done because most Internet gambling sites are based off-shore and in tax haven countries, making it difficult to locate the operation, obtain financial records for investigation, and effectively convict or hold responsible those running Internet gambling houses. Also to the chagrin of online gamblers, if too many people win operators have a history of simply shutting down and opening a different site”. (p. 207).

The reality is that in a large number of locales it is possible to set up an online gambling company (be that sportsbook, poker or casino), put your website online, establish a disguised credit card processing company and e-wallet payment mechanism and be operating in short order, with nobody to check you have the funds to pay out on bets you take, nobody to resolve any disputes between you and your customers, and nobody to step in should you decide to close down the website and disappear with the funds.

189

In this case, because of the industry, payment is essentially the end-all of disputes. Participants care less about whether their account remains active or whether they have access to certain functions than they do about receiving currency they feel is due. This ‘ultimate factor’ will of course vary by industry. In the case of virtual worlds discussed elsewhere in this document, while account assets or in-game currency may be important, the significance of keeping an active account and all the connections that entails might prove more significant.

Misunderstandings Sometimes, disputes simply arise out of a misunderstanding of the true conditions of the bet by players and participants. Gambling norms differ by region, and by what those participants have been conditioned to accept by local operations before gambling became an international operation. I am going to highlight this with one specific example, that of misstated lines, although the issue has wider application where sports are specific to a region but are bet on elsewhere – for example, Major League Baseball is a US sport that is now being offered by a large number of UK services, and has specific rules relating to rain delays, suspensions and so forth that have been the cause of a number of disputes with UK players.

The misstating of betting lines is a clearer example with which to demonstrate this. A bad line occurs when, through technical or human error, a book makes available to players an offer that is out of line with the rest of the market. For example, in a game between the Los Angeles Angels of Anaheim (LAA) and the New York Yankees (NYY), the fair odds, as agreed by the whole market, may be -110 (or 1.91 in decimal odds) each side. Sportsbook Z, due a technical error, has confused this game with the one below it on the betting rotation (list of odds), and is thus offering LAA at +150 (2.5). Inevitably, people would see this as the best price on LAA and make the bet. You might consider this equivalent to a TV being worth $1500, but due to a printing error being advertised as $150.

In Las Vegas, if a book put +150 on LAA, and accepted bets at this price, they would have no recourse, and would have to pay the bets should LAA win. This standard also applies to online bets placed with Nevada bookies, and briefly operated in the offshore gambling industry at its inception. In the UK, if a horse was 10/11 (the on-course fractional odds equivalent of -110 or 1.91), but the bookmaker mistakenly offered it as 3/2 (equivalent to +150 or 2.5) they would have the right to declare all such bets void under a rule known as ‘palpable error’ – that of making an error that was, or should have been, noticed by the bettor. This rule, presumably as more beneficial to the operator and also more suitable to an online/electronic environment where thousands of markets are offered and not individually checked, has come to be the standard accepted with all online gambling outside of Nevada.

190

The different norms at play cause issues for both players and mediators. When US players enter the industry, they expect the rules to be as per Las Vegas and often file disputes the first time a bet is voided, only to be angry when told that this is the industry standard. Similarly, when UK players bet on a baseball game for the first time, betting for example over 7 runs, see 9 scored in the first 5 innings, the game shortened due to rain and find their bet void (as baseball totals must go the full 9 innings to be valid), they are similarly perturbed. The same exists for mediators, and it is frequently the case that offshore-focused sites such as TheRX or SportsBookReview fail to consider the different norms at play.

SportsbookReview heavily criticised Totesport and IBAS in a dispute, summarised by SportsbookReview (in SBR, 2009):

“On January 17, 2009, a player wagered 125 Sterling on Wolverhampton +1 goal at the price of +433. After Wolverhampton covered, he found an email from Totesport telling him there was an "input error," commonly referred to as a "bad line" when talking about American sports. As a result of this "error" Totesport reversed the spread, changing his winning wager into a losing one. Totesport's terms and conditions allow it to adjust prices, but not spreads. When confronted with this fact by the player, it would not cite a rule allowing it to take this action. Totesport would not discuss the issue with SportsbookReview. IBAS reviewed the dispute between the player and Totesport, and ruled in favor of Totesport. In its ruling, IBAS did not consider whether Totesport's rules allow it to alter the spread in a pending wager. IBAS states it is an independant third party organization servicing the UK gambling industry. IBAS stands for Independent Betting Adjudication Service.”

IBAS, as stated on there website (IBAS, n.d.), have a precedent that comes into play on such occasions: “industry custom and practice is that the price taken will identify the proposition”. This is an accepted norm in UK betting, yet it is not the case for US or offshore disputes. This bet was placed with a UK bookmaker, highlighting both the need for participants to understand the rules and practices of the company (and country) they are using to place bets and for any dispute resolution system to understand the norms at play when rendering decisions.

6.8 Summary As I return to contemporary online environments in Chapter 7, the most significant factors to take from this chapter are the conditions required for this regulatory approach to succeed. These factors are particularly notable in that they distinguish offshore gambling from traditional, land-based, gambling, where a number of these factors would not exist. Additionally, it is important to note that

191 this is by no means an exhaustive list of factors leading to the implementation of this participant- based system in the offshore gambling industry; rather, it is an identification of factors that appeared to be especially significant during my research into the environment. As with Ostrom's (2006) work, such factors are subject to future revision and testing.

The case can be made that the whole offshore regulation system is in fact an implementation of Esteem Theory (McAdams, 1997). Most industry participants grant or withhold esteem based on the actions of the sportsbooks and their cooperation with the mediator, while there is an extreme risk that other participants in the industry will detect those breaching the norms, primarily through direct reporting to Sportsbook Review and dissemination through the community (an implementation of ‘gossip’, as described in Chapter 2). The final condition – that the norms & the risk of detection are well known – is also met. I doubt you would find a sportsbook operating in the offshore space that is not aware of SBR, and while you may find participants (particularly new ones), it would not be known to the companies whether the players know of SBR. However, there are a number of other key conditions.

Geographic Disparity & Lack of Formal Regulation It may seem glib to emphasise that offshore gambling is online, but it is crucial as it underlies much of what is to follow. The very fact that you have a company in one location, servers in any number of other locations and participants’ spread across the globe is key in making regulation problematic. Even to the extent that a court is willing to claim and enforce jurisdiction over a given company, or stakeholders agree an arbitrator, access to, and speed of, justice is problematic.

While offshore gambling companies often have the company and servers in one locale (though the move to .ag and .eu domain further complicates the question of jurisdiction), they also appeal to a global participant base, and indeed one quirk of gambling legislation in many countries is that they are able to offer services to all except those citizens of the country in which it operates.

The vast majority of these sportsbooks, at least those targeting Western markets, including the United States, operate under the law of states such as Costa Rica, Panama, Antigua, Netherlands Antilles and other countries in that region, while the vast majority of their player base is in the United States, with smaller volumes spread across the UK, Europe and Australia. While these companies notionally operate under the law of the country in which they are based, and frequently under the guise of a local gambling regulator, they are, as established above, to all practical extent, unregulated operations.

192

While public attempts have been made to sue offshore sportsbooks in their domestic courts (such as a group of SportsbookReview posters who attempted a case against Cascade Sportsbook), and even in US courts (Cory vs. EasySportsbook), there have yet to be any examples of success. Similarly, local gambling authorities, including, notably, those in Antigua and Malta (detailed in Chapter 7), have also proved unwilling or unable to assist players in obtaining payouts from sportsbooks where there has been dispute over bet resolution, bonus or payment.

Online mediation in the offshore Sportsbook industry has proven to be far speedier than traditional forms of justice, even those arbitrations enshrined in law such as IBAS in the United Kingdom, with decisions often being rendered and acted on in days rather than weeks, months or years. As such, both geographic disparity and a lack of genuine enforcement can be seen as conditions for this mode of regulation. Therefore, geographic disparity is likely to be a significant factor leading to the viability of participant-driven regulation as it restricts, or significantly impedes, access to justice.

Terms of Service & Community Norms In the offshore gambling industry, companies have traditionally used variations on a generic Terms of Service, built up through new types of bets developed over the course of the industry and through the resolution of disputes. In many cases these are equivalent to the terms found in Las Vegas (for example, baseball sides are valid after 4.5 innings if the home side is ahead or 5 innings if they are behind, while totals only have action if the match is complete).

In other cases, the rule varies by sportsbook (tennis matches can be valid even if there is an injury retirement after 1 ball, 1 game, 1 set, 2 sets or the match is complete), and other situations arise where there is no formal rule. Finally, sportsbooks Terms of Service often feature a catch-all, to the extent that rules for events not listed will be settled according to Las Vegas rules and that the book reserves the right to confiscate the balance of anybody not deemed to be a recreational player – a term frequently used to confiscate funds from players perceived to be engaged in bonus hunting and/or arbitrage.

While specific rules usually stand and are enforced by mediators as written (unless they are an egregious breach of the community norms), the catch-all’s have been largely opposed by the community and are generally ignored by mediators, who instead revert to natural laws of justice and community norms in trying to decide what is an equitable solution, such as paying bonuses in proportion to rollover already met.

Thus, the willingness of the community to see a set of rules and norms beyond those formalised in the Terms of Service can also be considered a pre-condition for this form of dispute resolution to be

193 effective. Without the malleability of Terms and Conditions, dispute resolution is a simple yes/no proposition; however, in continually evolving industries such as offshore gambling, consideration must be given to community norms as well as codified Terms of Service. Therefore, an unclear or incomplete Terms of Service, or a Terms of Service document that differs from the community understanding is likely to be a significant factor leading to the viability of participant-driven regulation as it creates the tensions from which disputes arise.

Nature of disputes All of this is redundant of course if there is no possibility for disputes. Disputes in the offshore gambling industry can effectively be divided into two subsets: company vs. participant and participant vs. participant. However, the latter can often invoke the company, whether it be a dispute over the action they have taken or not taken (i.e. banning the account), or requiring them to take some measures to document the facts of the case or to act on the results of mediation.

Starting with disputes between the company and the participant, there may be disputes around the specific mechanics of the environment – for example an online poker room with a malfunctioning random number generator or a sports parlay not paying out at the odds specified in the terms of service, or game balancing or misconfigured drop tables reducing the value of an item you have been obtaining and storing for a period of months. There could also be disputes where the player exploits a bug in the software, such as a sportsbook allowing a participant to bet correlated parlays (for example, Villanova +45 and Villanova/UNLV under 47 in a football match; if the total of the match is under 47, it is almost inevitable that Villanova +45 would win) – in such cases is it reasonable to rely on the premise that you should be allowed to do what the software lets you do, or is a greater degree of oversight required?

Other disputes do not involve the company directly, but do involve participants within their platform, and so request the company to provide information that will aid in the resolution of the dispute, or to take/reverse an action taken against an account holder. In the offshore gambling industry, there are frequently cases where players claim to have had their account hacked and funds lost, frequently in the casino – a dispute in which the sportsbook operation actually has a financial stake, while there are also analogies to 2 or 3 players at a 10-player poker table colluding to gain an advantage over the others – in such cases the sportsbook has no financial stake, but has the hand logs needed to assess whether there is proof of collusion and control of the accounts should other players at the table need to be refunded their stakes.

194

Finally, the uneven power relationship, or the possibility of being a victim of unjust enforcement action, was significant in gaining community support. Where players face a substantial loss at the apparent whim of a sportsbook, they are far more likely to support dispute resolution procedures.

We can, then, say that the possibility of disputes involving the provider in some form is a pre- condition for this type of regulation. Such a process is significantly less effective, or is not effective at all, in cases that involve third parties outside of the agreement between participants and providers.

Strength of Community One of the key foundations for participant-driven mediation within the offshore gambling industry was the strength of the community; the likelihood that any negative information about a particular operator would reach their clientele, and possible clientele, and thus influence the amount of business an operator is likely to receive going forward. Indeed, this mode of regulation can only work if the information is spread to those likely to use the platform. The eventual failure of forum- based mediation can be, in part, assigned to the inter-forum politics preventing the spread of information (i.e., people were prevented from posting information from other forums).

The success of the mediators in the offshore gambling industry is drawn from the strength, and centrality, of the community. One term I utilise for the form of regulation adopted in this industry is ‘reputational’; that is to say, that any given sportsbook relies on their reputation to gain customers. It is an industry where many operators offer very similar services, and there is little in terms of licensing to differentiate between them.

Because the community is relatively small, but more so because the majority of the community members pay attention to a small number of news services, reports made by sites such as Sportsbook Review and Casinomeister are carried by readers of those sites to the remainder of the community with some ease. When combined with the effect of search engine optimisation (SEO) on those sites, information on disputes, no-pays or rating changes reach the community as a whole in a relatively short time span.

As a result, providers within this industry are pressured into submitting to the mediation provided by these services, with the knowledge that to do otherwise or to ignore them would severely impact their client base and business prospects. By extension, this means that the precedents established by these mediators, and the norms established by the community, are rapidly incorporated into the Terms of Service and standard operating procedure of the industry.

Therefore, having information spread through the community, by whatever means possible, to reach a large proportion of the player base is likely to be a significant factor in the viability of participant-

195 driven regulation, because without such community pressure, operators cannot be coerced into participating in mediation through the court of public opinion.

Testing these factors In brief summary, then, I have identified a number of preconditions for this form of self-governance and dispute resolution: geographic disparity, the lack of sufficient existing enforcement mechanisms, affordance given to community norms as opposed to merely codified terms of service, disputes involving participants and providers (but not a third party), an uneven power relationship between participants and provider, and the strength of the community for sharing information about industry participants and disputes.

It will be apparent to the reader that many of these factors mirror factors identified through the sampling of disputes I discussed within the context of Eve Online and other online environments in prior chapters. In particular, the major challenge faced by participants in having to file a lawsuit in an Icelandic court in order to resolve disputes not remedied by the customer service department does not depart dramatically from the challenge faced by participants at offshore sportsbooks; in both cases there is no cost effective remedy available to participants. Uncertainties over the implementation of Terms of Service, as seen through action taken (or not taken) against those participating in botting and real money trading appears, on the surface at least, are similar to many of the disputes discussed in this chapter.

Chapter 7 will consider the extent to which these conditions apply more broadly to online environments, and in doing so will establish the extent to which such a mechanism could be applied to such environments, the boundaries of its jurisdiction (to players and participants, rather than 3rd parties) and the types of disputes (and the methodologies for resolving them) it may be able to consider. More broadly, I consider how such a regulatory mechanism would fit into the type of structure outlined by Reynolds & de Zwart (2011), and how it compares to other suggestions put forth for the regulation of such spaces.

196

7. Defining & Testing a Participant-Driven Approach to Dispute Resolution

Through the material presented in Chapter 6, I identified a number of factors underlying the adoption of a participant-driven mediation mechanism that has evolved to regulate a number of participants in the offshore gambling industry. While the history of that system shows a significant amount of evolution, from small community forums to industry dominating platforms, the question remains as to whether such a system can be extended beyond the community with which it evolved concurrently. During my research on Eve Online, it became apparent that a number of these factors were also present within that community, and I thus theorized that the system might have wider applicability to contemporary online environments.

In this chapter, I firstly establish the need for a regulatory approach in the context of the current regulatory system and the potential for enforced regulation, before returning to those conditions identified in Chapter 6 for the mode of regulation found in the offshore gambling industry to prosper, and consider their applicability to contemporary online environments of the type described throughout Chapters 2, 4 and 5. While I draw on the contextual examples of Eve Online outlined in Chapter 5, particularly with regard to motivations of stakeholders and the details of disputes surrounding real money trading and botting, my focus lies more broadly on considering gaming environments, but also on platforms such as Facebook to whom, as described in Chapter 4, these types of disputes, and the modes for resolving them, are becoming increasingly applicable.

In Chapter 6, I identified a number of preconditions – geographic disparity, the lack of sufficient existing enforcement mechanisms, affordance given to community norms as opposed to merely codified terms of service, disputes involving participants and providers (but not a third party), an uneven power relationship between participants and provider, the strength of the community for sharing information about industry participants and disputes. Similarly, I described the process undertaken by mediators who, after the issue has been reported, can determine whether terms and conditions have been breached, consider whether those conditions were reasonable and were enforced reasonably, and consider whether the enforcement action taken in response to the breach was appropriate.

This chapter will return to those conditions and evaluate the extent to which they can be found in contemporary online environments, but beyond that I also return to the boundaries within which the regulatory approach found in the offshore gambling industry could be applied, discussed

197 previously in Chapter 4, and consider how such a mechanism may go about resolving disputes in contemporary virtual environments. More broadly, I look at how this dispute resolution mechanism would fit into the type of structure outlined by Reynolds & de Zwart (2011), and, finally, how it compares to other suggestions put forth for the regulation of such spaces.

This chapter concludes by means of an update. During the latter stages of writing this document, developments in both the offshore gambling industry and the Eve Online community served to remind us that both communities remain in flux. I outline two issues: a challenge to the authority of Sportsbook Review, and an admission by CCP that they encouraged real money trading and botting; and an increase in public action against those participating in them, to demonstrate the evolving nature of these environments, the challenge of maintaining authority in an unregulated industry and the significance of creating and enforcing rules and norms in online environments.

7.1 State of Play It seems clear that with the industry growing, both in companies offering services and in terms of the number of participants through social media platforms such as Facebook, we are likely to see a sharp increase in the number of disputes and the press they receive, and a potential push towards regulation. Reynolds and de Zwart predict that “in the short term: Increased theft of virtual items; Increased third party sales of virtual items and related crimes e.g. credit card fraud; More players will seek legal remedies for publisher acts that they do not agree with; More judgments will be found in favour of players overturning EULA and copyright primacy; and, Policy makers and regulators will increasingly focus on the virtual items and currency – probably creating regulations that inadvertently harm at least one sector of the industry, thereby also harming citizens that enjoy participating in that sector” (p. 6)

Ideally, all companies and participants in the online space would sign up to a form of binding arbitration with expedited processes. Such a model has no precedent and would seem unlikely to emerge. The model proposed by Reynolds and de Zwart (2011), based on the Court for Arbitration of Sports, is the closest to this that has been proposed, although their suggestion both excludes a wide range of disputes that are likely to need arbitration (in particular, disputes between two participants) and – at least based on the time taken for decisions by the Court for Arbitration of Sport – is unlikely to provide any quicker access to justice than traditional models such as IBAS in the gambling industry.

As discussed in Chapter 6, despite the presence of IBAS as a provider of binding arbitration recognised by the UK Government, players continue to ask Sportsbook Review to mediate disputes.

198

Systems such as Sportsbook Review, in which pressure is exerted on publishers to comply, have two immediate benefits: 1) They are fast – decisions are often rendered in days or weeks, as opposed to months, and 2) they are (relatively) transparent, giving interested parties the ability to comment through discussion forums and other community platforms – but more importantly quickly communicating the level of service offered by a provider to the industry participants. While it may be preferable, particularly in light of Ostrom (1990) and McAdams (1997) discussion of norms, to have total transparency, and to disseminate full information as widely as possible, the practicalities of dispute resolution discussed previously sometimes require facts and methods to be withheld in order to reach a mediated settlement.

Reynolds & de Zwart do not detail what transparency their proposed body would offer – though it is worth noting the Court for Arbitration in Sport does make its rulings public, though given the extent that participants would be required to exhaust the customer service and internal dispute mechanisms, it is hard to imagine that this process would be completed with any great haste. Services such as Sportsbook Review and the Reynolds & de Zwart proposal both potentially suffer from enforceability; they require books to agree to co-operate with them in order to be effective. It is not, considering the international nature of the industry, required to submit to IBAS jurisdiction to set up an online bookmaker, and the costs of leaving the arbitration process are relatively low. If a co-operating publisher was to receive a ruling, or a series of rulings, they did not like it would seem plausible that they would remove themselves from this arbitration process, at which point the only ‘enforcement’ available would be the reputational damage suffered by withdrawing.

Additionally, Reynolds & de Zwart perhaps underestimate the requirement for knowledge of local norms when assessing a dispute; a player representative versed in World of Warcraft and Everquest is unlikely to fully understand the norms present in an Eve Online dispute. Also, they specifically exclude User vs. User disputes from the remit of such a board, which I would consider to be one of the most useful services such a board could offer, and one that is likely to be welcomed by publishers. Finally, in the context of the Bragg ruling, it is problematic that Reynolds & de Zwart focus on the primacy of the terms of service and other documents without scope to consider whether such a term is reasonable to implement. The reliance on coercion, or the court of public opinion, in the participant-driven regulation found in the offshore gambling industry allows terms of service to be considered in the context of community norms, which a formal system may do less well.

If we are then to exclude universal binding arbitration as an option, a model based on what has been observed in the offshore gambling industry may be the next best option. As detailed, the key factor

199 if arbitration or, in this case, mediation is non-binding is to have a public that is sufficiently small in relation to the reach of the community that a company (or, indeed, participant) that refuses to honour such mediation, which is presumably representative of the community consensus, faces harm to their reputation commensurate to the decision. That is, a dispute on which community opinion is split, and the assets at stake are low, is likely to have less impact on reputation than a dispute in which significant sums of money, real or virtual, are at stake and on which the community universally agrees; something which is certainly the case with regard to the offshore gambling industry.

One of the weaknesses identified in the Reynolds and de Zwart (2011) proposal is that it ignores participant-to-participant disputes. One reason for that may be that the publisher will claim not to be a party to a dispute between participants. Linden Labs, publishers of Second Life state, for example, that “While you may have a valid agreement with another person, Linden Lab is not a party to and cannot resolve your dispute.” Mediation may be one solution to this; if both players agree to let a third party resolve a dispute, and to have the publisher enforce it, the publisher is absolved of this responsibility while simultaneously being able to reap the benefits of a perceived fairer playing field. Participants may also face peer pressure to refer their disputes to such a mechanism once established and reputable, and unwillingness to do so may be construed as an admission of wrongdoing, with the resultant impact on a participant’s reputation.

Companies may, however, be less willing to submit disputes to such a body when they are one of the parties to the dispute. Again the court of public opinion is the ultimate remedy; if such a body were able to establish itself as fair and equitable, then just as the participant who refuses to submit a dispute in the previous example would be seen as admitting wrongdoing, the publisher who fails to consider such mediation would face the same consequences. Here, the community outreach argument discussed in Chapter 4 comes to the fore, and one can easily imagine a headline on Reddit such as ‘ refuses mediation in $10,000 dispute’ quickly spreading to other news platforms, and the fallout among the player base being more significant (in terms of negative publicity) than had the publisher submitted the dispute and abided by mediation.

7.2 Applying the conditions for Participant Driven Regulation There are clear and significant differences between the gambling industry and the other environments discussed in this thesis , and so it cannot be taken as a given that the regulatory approach that operated for over a decade in the offshore gambling industry would apply to other environments. Key amongst these are the different stakes; financial in the case of the offshore gambling industry, and social in the case of other environments, and the ease of moving between

200 platforms; relatively simple in the case of the gambling industry (difficulties with funding and withdrawing from accounts notwithstanding), but much more difficult in other environments where you cannot easily take all of your friends from Eve Online or Facebook to other games or platforms, placing at risk the capital- social or financial - invested in these spaces as discussed previously (Taylor, 2006 & Humphries, 2005).

It is then necessary to take those conditions identified in Chapter 6 as preconditions for the success of the offshore gambling industry model and question whether those same conditions exist in contemporary online environments. The problem here, of course, is that each environment is different; the gaming nature of Eve Online is very different to the social 3D space of Second Life, which is different from games hosted on social network platforms such as Facebook. In the discussion that follows I consider online environments broadly, though I will identify where a particular condition may apply more or less stringently. In general, these conditions are sufficiently broad that they apply to the majority of environments that could be defined as ‘contemporary online environments’.

Geographic Disparity Online environments, by definition, are online. As with the offshore gambling industry, the nature of these environments generally leads to a worldwide audience for an operator in one country and servers perhaps in another. As with the offshore gambling industry, this makes regulation problematic, even when there is a court willing to claim jurisdiction over cases or an arbitrator is specified. Access to justice, and the speed of it, remains difficult.

CCP, developers and publishers of Eve Online, are a company operated from Iceland. Unlike many online environments, they operate on a single shard, with all clients connecting to servers also located in Iceland, so in many ways they are a simplification of some of the more complex jurisdictional issues that arise in such environments. However, even here access to regulation is hard. For the majority of players paying $15 per month to play in an online environment, the costs of actually filing a case and seeking resolution, beyond that of CCP’s internal Customer Service mechanisms, would be extremely problematic, for CCP’s (2012) End User License Agreement states:

The EULA, and the rights and obligations of the parties hereto, shall be governed and construed by and in accordance with the laws of the Republic of Iceland. The EULA shall not be governed by the United Nations Convention on Contracts for the International Sale of Goods.

The sole and exclusive forum for resolving any controversy, dispute or claim arising out of or relating to the EULA, or otherwise relating to any rights in, access to or use of the Software,

201

System, Game, Game Content, User Content and/or the rights and obligations of the parties hereto, shall be the District Court of Reykjavík, Iceland, (Héraðsdómur Reykjavíkur). You hereby expressly waive and agree not to raise any and all objections based on personal jurisdiction, venue and/or inconvenience of such forum and agree to the jurisdiction of the District Court of Reykjavík, Iceland.

Thus, even if it were possible to force CCP to take specific actions through judicial decision, it would be inaccessible for a large portion of the player base that is not located in close proximity to Iceland. This also, of course, creates unequal justice; players in Iceland could definitely follow through with action, and would probably have a reasonable understanding of the relevant law (or could obtain the same). For players in the United Kingdom or Europe this would be more expensive, information on the relevant laws becomes less certain, and of course it becomes increasingly expensive, as the participants have to factor in travel time to Reykjavík.

That this meets the conditions established in the offshore gambling industry is readily apparent. Operators in the offshore gambling industry would frequently mirror the CCP simplification of having the company and servers in one locale, although, interestingly, the .com domain names they frequently used have come to be seen as being under US jurisdiction. They also appeal to a global participant base, and, indeed, as highlighted in Chapter 6, one quirk of many countries gambling legislation is that they are able to offer services to all except those citizens of the countries in which they operate. Finally, they operate in a range of international locales which generally do not take an active role in policing or monitoring their operations, resulting in them effectively being unregulated, at least from the perspective of the players..

Just as this is true of Eve Online, it is also true of other online environments. Second Life, for example, is physically located in the United States with active participants throughout the world, whereas the majority of games being offered through the social network platform Facebook are available to users of the platform across the world, with the games themselves being designed and maintained by operators in a further range of countries. In both cases, establishing local jurisdiction for dispute resolution would be difficult, if not impossible. Geographic disparity is as significant in contemporary online environments as it was in the offshore gambling industry, limiting or preventing participants from acquiring justice.

Terms of Service & Enforcement As described in Chapter 6, operators in the offshore gambling industry developed a norm of Terms of Service documents that evolved based on disputes over the history of the industry, and were based on those found in Las Vegas. These Terms of Service also frequently included a catch-all for

202 professional play, a term which has frequently been rejected by the third-party mediators, highlighting the difficulties with enforcement, which both Ostrom (1990) and McAdams (1997) posit is a requirement for effective governance through norms.

Again this condition exists, and for largely the same reasons, in contemporary online environments. While rules within these environments are generally seen to be more enforceable than those in the offshore gambling industry, as the industry itself is less underground, online environments also have problems with incompleteness of their terms and conditions, as well as the implementation of action to enforce them. In such dynamic environments, participants often find ways to gain advantage, exploit bugs or exploit intentional game mechanics in ways that the operator finds undesirable, and so they are constantly updating their Terms of Service and other agreements to prohibit such behaviour; one example of this is the increasing specificity in the Eve Online terms of service between 2009 and 2012 to disallow botting or other forms of automation.

Whether terms are always enforceable is also questionable, as highlighted by the failure to enforce the arbitration clause in Bragg vs. Linden Labs. Catch-all’s, as with the gambling industry, are sometimes difficult to enforce, and will often be subjected to tests, by the community if not the courts, of whether the contract term is reasonable. Similarly, terms and conditions created by the company that are an egregious breach of community norms (which are themselves often carried over from other virtual environments and/or games) are likely to face opposition from the community. Finally, participants are also likely to seek increased protection for acts that they consider within the terms of service at the time they were performed.

Thus, in both the offshore gambling industry and contemporary online environments, there are often significant issues with terms of service documents, particularly in cases where the codified rules differ from the community norms. Beyond issues with the terms themselves, both industries have significant issues with the enforcement of terms, particularly around areas such as automated participant aids. In both cases, Terms of Service documents are non-exhaustive, struggling to keep pace with design changes and other external factors.

Strength of Community As discussed in Chapter 6, the success of mediators in the offshore gambling industry is drawn from the strength, and the centrality, of the community. One term I utilise for the form of regulation adopted in this industry is “reputational”; that is to say that any given Sportsbook relies on their reputation to gain customers. In essence, this model mirrors McAdams (1997) Esteem theory; with customers ‘gossiping’ with each other in other, and thus raising the information available to participants, making it more difficult for sportsbooks with unhappy customers to continue operating.

203

It is an industry where many operators offer very similar services, and there is little in terms of licensing to differentiate between them. As a result, the majority of the community members pay attention to a small number of news services, and reports made by sites such as Sportsbook Review and Casinomeister are carried by readers of those sites to the remainder of the community with some ease. When combined with the effect of search engine optimisation (SEO) on those sites, information on disputes, no-pays or rating changes reaches the community as a whole in a relatively short time span.

This condition is the most problematic to truly satisfy for most contemporary online environments. It is certainly not the case that the majority of Facebook users check one particular forum, or even that all the participants of Second Life read something posted on a community blog. However, the size of the industry can also work to the advantage of participants. While a no pay at an offshore sportsbook would be big news within that community, outside of those discussion forums and websites it is unlikely that many would hear of it. By contrast, if a game hosted on Facebook refused to pay legitimate earnings to participants, the story would be much bigger news and would most likely receive technological and mainstream press attention.

Additionally, for participants in a specific environment, the community could be seen as more concentrated. Taking the example of Eve Online, players are concentrated around a few community sites, including CCP’s own, but also blogs such as Eve News 24, the Eve Blog network, forums such as Failheap and the twitter hash-tag #tweetfleet. As with the offshore gambling industry, information is relatively transient between these sites, and it has been evidenced that sites such as Eve News 24, alliances such as Goonswarm and notable players such as Mittani have the power to start game- influencing operations such as the annual Hulkageddon and the 2011 Ice Mining operation (detailed in Chapter 5).

Thus, while the context of the community strength varies between offshore gambling and contemporary online environments, it is still present. It may also be possible to refine 'strength of community' to the degree to which information regarding an operator or dispute is able to spread to, and within, the community, however such refinement would require further study. Ultimately, there is evidence that the same objective is reached in online environments as in the offshore gambling industry; that is, participants hear about operators who are infringing against community practices and norms, and thus companies are aware that handling a situation badly is likely to lead to negative press and, with that negative press, the risk of losing future custom.

204

Potential for disputes While it may seem an obvious precondition, the potential for disputes is significant. If a platform operator merely operated a forum, or some other platform, to mediate community discussion, the potential for disputes would be slim. While you could hypothesise a dispute with an established community member disputing being banned from the platform, the range of disputes would be extremely limited, and the potential for dispute resolution even more so. Once gaming elements, displays of skill (e.g. leaderboards, skill points, etc) and real money are involved the range of disputes increases significantly.

In Chapter 6 I highlighted a wide range of disputes that have arisen in the offshore gambling industry, and in Chapters 4 and 5 I did the same for a range of other online environments. I thus do not intend to repeat the detail of those here. It suffices to say that in the type of complex online environments currently offered, and which may see more of as the industry evolves, the potential for disputes, and thus the need for dispute resolution, is significant.

Disputes can be categorised in a number of ways, as indicated in Chapter 4. Broadly, there are two categories: those involving participants within the environment (be that operator vs. participant or participant vs. participant) and those involving an external third party. The latter may exist in virtually any environment; for example, a forum may face action for using trademarks. However, as demonstrated in Chapter 4, such disputes are, in any case, outside of the scope of the type of regulation discussed here. Thus, it is the potential for disputes involving participants in the environment, and for which resolution is sought within the environment, that serves as the precondition for this mode of regulation.

Disputes between the company and the participant may take a number of forms, including disputes around the specific mechanics of the environment, or a bug in the software, just as Sportsbooks may unintentionally allow a participant to bet correlated parlays, leading to a debate about whether you should be allowed to do what the software lets you do or if the player is expected to abide by some unwritten (or un-coded) rules. Finally, there is the possibility of being a victim of unjust enforcement action in contemporary online environments (as discussed in Chapter 2 in the context of Second Life), just as it is in the offshore gambling industry.

There also exists the possibility, particularly in the multiplayer environments, which are becoming ever more prominent, for disputes amongst participants. These disputes may often invoke the company either in the quest for information or to take/reverse action taken against an account holder. Linked to this are ‘scams’, to the extent that they constitute a breach of the Terms of Service. For example, gaining access to another character’s account and transferring property is a dispute

205 between participants, and it is one in which the company providing the service holds both the data required to confirm that is what actually happened and the ability to reverse transactions to compensate the affected player.

It is clear, then, that the potential for disputes exists in contemporary online environments just as it did (and does) in the offshore gambling environment. In both cases, and as with the problems of maintaining exhaustive and representative Terms of Service agreements, there is evidence of norms and rules being contested within the participant base, and between the participants and the operator. It is these various tensions that are the core feature of the majority of disputes discussed in both case studies.

Summary It is clear that the factors that I identified in the offshore gambling industry as foundations for the success of participant-driven regulation in that environment also largely exist in contemporary online environments. The same problems are faced amongst the user base, where geographic disparity leads to problems in achieving fair dispute resolution. Additionally, as with the offshore gambling industry, we see a range of disputes that require action within the environment, and an unclear set of Terms of Service, rules (codified and not) and norms that the wider community is left to untangle.

I therefore propose that such a mode of regulation is worthy of consideration for contemporary online environments as a pro-active approach to avoiding further regulation. It is important to clarify exactly what form that mediation may take in such disputes, and what the boundaries of dispute resolution are for such environments.

7.3 Boundaries & Resolution Theories It remains to theorise as to how a system similar to that described in Chapter 6 may resolve disputes. In the remainder of this chapter I consider the outline of disputes first introduced in Chapter 4, and how a participant driven mediation body may attempt to resolve them.

Intellectual Property To deal firstly, and briefly, with the first type of issue discussed in Chapter 4, Intellectual Property disputes largely fall outside the scope both of direct mediation and of community influence. Legal issues with third parties, such as the case involving Marvel and City of Heroes, described in Chapter 5, is simply a case for which at least one party has no motivation to subject themselves to such mediation. Similarly, ownership rights are subject to much the same argument. The question, raised by Taylor (2006), Humphreys (2005) and Reynolds & de Zwart (2011), amongst others, over what

206 rights players have to their creations – characters or otherwise – within online environments is one that is unlikely to be settled by mediation, being a wide ranging policy issue that applies to a number of environments, each with their own terms of service.

Rules The Second Life ‘tax protest’, described by Grimmelman (2003), was founded on the basis that participants were being charged more for building larger objects – skyscrapers or complexes – than those who built houses, while the first were argued to be providing much more value to other participants and, by extension, to Second Life itself. This dispute then was resolved successfully, after a substantial period of time, by negotiation between the participants and the provider, without the need to mediation.

While this case is resolved, I do believe that there is a role for a participant-led organisation. As with the previous dispute, the first service such an organisation could provide is publicity, while they could also provide a platform for both sides, and the wider community, to discuss the issue and come to a resolution, as opposed to disparate blogs, press releases and in-game protests. While the protests did receive limited media coverage, it was primarily limited to Second Life specific sites such as New World Notes (Au, 2003). An experienced platform operator may have been able to draw attention to these consequences and achieve wider media attention, if that was desired. As norms theory makes clear (McAdams, 1997), the spread of information, directly or indirectly, and which he terms as ‘gossip’ is key to the enforcement of community norms.

Similarly, to the extent that there was a desire for a real debate around the specifics of a policy, a mediation platform would be in a unique position to highlight the perspective of the players on one hand and the business realities of Linden Labs on the other, in order that the community may take a position and decide where they stand on the issue, as has been the case with issues such as the change in baseball rules discussed in Chapter 6. This same service could be afforded to any case where a group of players is protesting a game mechanic, such as Castronova’s (2005) description of protests in World of Warcraft regarding the Warrior class.

The second case highlighted by Taylor (2006), via Harmon (2004), is the banning of Michigan Professor Peter Ludlow from The Sims Online. Under the principles established in Chapter 6, a mediation body would have three primary issues to investigate in such a case: (1) whether Ludlow broke the terms and conditions of the environment; (2) whether those conditions were reasonable and were enforced reasonably; (3) whether the punishment fitted the crime. The caveat to (2) is especially significant here. A platform serving as mediator in this dispute may consider that the terms and conditions are being selectively enforced as a smokescreen for the real reason, and may

207 seek to establish whether other players breaching the same term (e.g., linking to similar content) have also been banned.

Without full knowledge of the facts, it is not possible to suggest how a mediator platform would rule; however, it is apparent that such a case would be one on which mediation would be appropriate. While the banning of Ludlow received some attention academically and in the gaming press, a finding by an established body that Electronic Arts banned the player unjustly in an attempt to cover-up a seedy undercurrent would likely have garnered wider press. Similarly, from the publisher perspective, having an outside body look at this case before it achieved notoriety, and communicating to management at the company that ‘you got this one wrong, just let him back’, would have the potential to save the company a lot of negative press. Again, the process would have potential benefit to both sides of the dispute, as well as aid in the establishment and enforcement of the community norms.

Community As highlighted previously, one problem, especially with games hosted on social networking platforms– but also to some extent with Virtual Worlds and other online environments – is the lack of a central community focus that is able to pressure such disputes. This closely mirrors the situation in the early offshore gambling industry, described in Chapter 6, where a number of competing forums were so tied up in their own internal issues and cross-forum politics that there was no single voice to speak to the participants.

A mediation platform could similarly act to consolidate the community, creating a representative voice able to speak on a number of different environments. Also, by virtue of providing a central news source, such a platform may encourage other gaming and more general news sites to carry that information to the wider community, again increasing the spread of community norms and increasing the likelihood of them being enforced, with both Ostrom (1990) and Suzor (2010) highlighting that wide-spread knowledge of the norms is a pre-requisite for enforcement. As a result, pressure on publishers and operators could be increased. Of course, it is important to note that the players are not always right, however through providing a platform discussion, a mediation platform may help reach a community consensus.

Power Relationship Also outlined in Chapter 4 is the uneven power relationship that exists between participants and operators, with Taylor (2006) noting that players often try to assert rights they may not have, while corporate owners have greater access to legal remedies, arguing that “the battle over user autonomy would not be nearly as worrisome if people were operating on a level playing field with

208 the corporate owners” (p. 133-134). Although not a frequent occurrence, there are cases in the history of the offshore gambling industry, most notably – though unsuccessfully – a Sportsbook Review supported class action lawsuit against Cascade Sportsbook in Costa Rica (in October 2007), where bodies have stepped in and provided representation for players.

Whist the BetCascade suit was not successful; one must consider the context of the legal system (Costa Rica) in which the sportsbook operated in assessing the failures, and the merit of such representation. A properly funded mediation platform would likely be in the position to connect players and support similar actions, which would go some way to levelling the playing field described by Taylor (2006).

Real Money Another range of disputes highlighted in both Chapters 4 and 5 were those surrounding real-money trading (RMT). These are disputes that could take a few prominent directions: action taken against those participating in the activity (including banning, confiscation of balances, and potentially third order disputes where a RMT-player buys an item, sells it, and then the item is removed), disputes between buyer and seller where a transaction has not been completed according to the agreement between the parties, and the wider range of disputes (theft, scamming, etc.) which may arise in environments that support RMT.

As the offshore gambling industry demonstrates, the fact that money is involved is no object to the potential implementation of a mediation platform. When mediating disputes involving real-money trading in contemporary online environments, there are at least three contexts of which a mediation body would need to be aware: (1) the Terms of Service, as they are written; (2) the community norms within the environment, which will include the extent to which the Terms of Service are enforced; and (3) the local context of the players; for norms may differ between regions.

The Terms of Service and community norms are the key aspects in determining any dispute. Two clear examples exist: if a terms of service document prohibits real money trading, such a policy is regularly enforced, and the community understands and follows this then we can certainly conclude that in-game assets have no real world value. Similarly, if the terms of service document states that in-game assets can be converted to real world currency at-will then there is no dispute; these items have real world value and players should be compensated accordingly in the case of unjust account closure or confiscation.

It is the borderline cases where a mediation platform would have more significance. If a company prohibits real money trading in their Terms of Service, but takes no action to enforce it, and there is

209 clear evidence of significant trade between in-world and real-world currency, the mediator may be charged with establishing whether there is such a prevailing community norm in favour of real money trading that real-world compensation would be warranted in particular cases.

Similarly, one can imagine many types of derivative disputes in such environments, where one player steals items from another and utilising what may be described as a ‘feature’ by one party and a ‘bug’ or ‘exploit’ by another. Similarly, a dispute could exists where two participants allege an agreement to buy and/or sell an item, or indeed a currency, was made and has not subsequently been honoured, or a third order dispute whereby a game removes all of the assets purchased by a player through real-money trading, but one of those items was subsequently sold to a third player and used to construct a new object. In such cases the third player may be compensated with the original value of the item, but what if it went up in price, or the new item they creates is itself worth much more? A large potential for dispute exists here, which is one reason designers such as Bartle (2004b) highlight the risks of incorporating real money and property rights in environments.

These are all examples of cases in which reasonable people may differ in opinion, and for which a mediator would need to be in possession of the full facts to make a decision. There are, then, clearly, cases in which a mediation platform would play a useful role, providing adjudication on disputes which likely would be cost-prohibitive to resolve under current measures if the customer service department was insufficient or, in extreme cases, would likely involve months or years of legal action.

Reasonableness of Terms As highlighted by the Bragg case, and detailed in Chapter 6 with the example of the ‘recreational player’ clause in the offshore gambling industry, the reasonableness of terms and conditions in any given environment is one area in which a mediation platform may frequently be asked to adjudicate. While the cases discussed in Chapter 6 with regard to the gambling industry were not couched in such language, the principles at stake were the same. For example, when BeStake included a rule stating that players would have their balance split between six bets, and receive a payout (and 15%) bonus if they were all to win, Sportsbook Review stated that the rule “violates contract law and common sense”.

It is, I would then suggest, not unreasonable to imagine that a mediation platform asked to consider contemporary online environments may have success in requesting operators revoke unconscionable terms without challenging it legally, and request that they consider the net position (financially, or in-game) if such a term were not in place. Such a process would have relevance to the type of real-money disputes discussed above, but it may also be found that other terms, or rules, are

210 considered unreasonable, especially catch-all terms allowing account adjustment and closure, or retrospective enforcement action against exploits and other forms of what I termed ‘advantage play’. This is particularly the case when activities that may have been reasonably considered valid or accepted play styles at the time are subsequently declared in breach of the rules, and in such cases a mediation panel may return the account to the state it was in prior to such enforcement action and/or order other adjustments to return the parties to equilibrium.

7.4 Summary: Mediation Platform To recap, this thesis considers the merit of a dispute resolution or mediation system similar to operated by platforms such as Sportsbook Review in the offshore gambling industry. The success of such a model in the offshore gambling industry can be put down to a number of factors; predominantly the geographic disparity of participants and platform operators, the difficulty in codifying and enforcing terms of service, the potential for disputes; financial and technical, and perhaps most significantly, the strength of community enabling the results of mediation to have a significant impact on companies, and thus encouraging them to engage with the process.

Additionally, the offshore gambling industry also demonstrated the failure of a number of other approaches, including having no regulation at all, having smaller, competing mediators, and having mediators who are indebted to platform operators. A history of disputes in the offshore gambling industry also provided the factors on which a mediator may rely, and the type of issues with which the mediator would be able to engage. In essence, after an issue is reported, the mediator sought to establish whether terms and conditions were breached, whether those conditions were reasonable, whether they were enforced uniformly (i.e., they were not being used as a punitive measure against an account holder), and whether enforcement action taken by the operator was appropriate.

It is clear that these conditions are also present in many contemporary online environments, and in the case of social networks, the environments they host. The nature of these environments as hosted online platforms leads to geographic disparity, there have been demonstrated issues with both codifying and enforcing terms and conditions, particularly in contradiction to community norms, and there exists the potential for dispute on a wide range of issues. Finally, while the community is more disparate, and there is no immediately obvious channel for spreading information amongst the player base, the relative popularity of the industry also serves to its benefit, meaning that an issue is likely to receive for industry and mainstream press than in the offshore gambling industry.

211

There do remain boundaries to where such a mediation platform is appropriate. Disputes between players and operators with in-world demands are cases in which the suitability of mediation is clear, while cases with out-of-world demands (such as policy changes) may prove outside the boundaries of direct mediation, and disputes with third parties are likely to continue to require judicial determination .

Finally, the funding model is important, and it remains perhaps the biggest question to be addressed. In the offshore gambling industry, while the industry and advertising were strong, mediation platforms were able to establish a degree of independence and their rulings were given more credence by the participant base. However, as the industry weakened and the mediation platforms became more reliant on a small number of companies for their continued existence, the power balance shifted decisively in favour of the operator. Should the mode of dispute resolution I suggest gain prominence with the industry, financing the platform and maintaining sufficient independence from the operators will be key to its successful operation.

However, the type of funding required varies significantly depending on how the system evolves. The costs of opening an in 2004 differs substantially from the costs of running a business such as Sportsbook Review in 2013, and if the process in the offshore gambling industry were to repeat itself, the financial considerations may evolve in step with the role of the mediator. The evolution of a mediation system may take a number of different forms. For example, a service may launch for a specific game, or platform, with websites and mediators emerging from the community who are able to communicate with the operators in order to mediate a particular type of dispute.

The mediator may have a range of roles within the existing community (in the offshore gambling industry, both gamblers and industry professionals emerged as mediators), or be an external third- party. Such a service may then expand to cover a particular type of game, or a particular subset of the gaming community. Similarly, participants within existing communities such as Reddit or Kotaku may become de-facto mediators; able to involve operators in the discussion and ultimately to influence the community to exert sufficient pressure that the mediators opinion, or the opinion of the community, is upheld.

The business model may also vary substantially. If mediators emerge from the player community of an existing game, it may start as a free service, akin to Taylor’s (2006, 2006b) ‘productive players’ or the player created content Banks (2002) discusses. However, mediators may also emerge as business

212 ventures, either provided by third parties, or by existing participants who have observed the success of such methods in other industries, again with room to grow across the industry.

Whichever of these types of mediator emerges, if any, there remains a role for some form of government regulation, with establishing the boundaries between different forms of regulation an early challenge faced by the mediator, as well as operators and participants. I am not proposing a specific design, nor calling for a particular implementation of such a body, as a key facet of participant driven regulation is that the form that emerges should the most appropriate for the community at that time.

7.5 Evolving Industries During the latter stages of writing this document, a number of developments in both the offshore gambling industry and Eve Online served as reminders that both of these spaces are continually in flux; that the position of industry-dominant mediator is not enshrined, and that a number of the themes highlighted in became evident to the developer of Eve Online, CCP.

In Chapter 6 I described a case between a poster, Cory Roth, and the Sportsbook EasyStreet Sports, suggesting that both Sportsbook Review and the community believed the player should be paid, while TheRX, a forum sponsored by EasyStreet Sports, ruled they should not. In September 2012, the player – Cory Roth – filed another dispute with Sportsbook Review. In this dispute, he claimed, his mother had hit royals playing the same game at a sportsbook named Heritage Sports.

Roth had previously been banned from Heritage Sportsbook, and in this case Heritage Sports alleged he was using his mother’s account to cover his play, which he denies. Sportsbook Review in this case ruled that Heritage Sports should refund the deposits, but Roth should not receive his winnings. Roth criticised this decision on SBRForum.com, claiming the verdict was biased due to Sportsbook Review’s sponsorship arrangements with Heritage Sports. Community reaction was strongly divided, with a number of posters claiming the ruling only differed because of Heritage Sports’ sponsorship of SBR.

As demonstrated through the examples of MajorWager and TheRX in Chapter 6, losing the trust of community members is a dangerous road. At the time of writing, the dispute had yet to be completely resolved, with SBR John proposing that Roth take the dispute to UK arbitration if he is not satisfied, which Roth refuses to do (in part because SBR John believed the deposits should also be at stake in arbitration), while Heritage Sports are, in a situation reminiscent of the Easystreet Sports dispute, having an “industry expert” review the case. The ultimate decision, now over a sum

213 of $13,000, may yet threaten the role of Sportsbook Review as the dominant mediator; however, the lack of a realistic alternative does seem to limit this.

Meanwhile, October 2012 saw another of the CCP fan events, EVE Vegas. At this event, CCP presented further information on their ongoing response to the situations described in Chapter 5 regarding real money trading and botting. During the Eve News 24 blog on the event, they noted the presenter as identifying that “Botting and RMT has become socially acceptable because of the inaction on the part of CCP” (Kyle, 2012), and that “PLEX set the stage for an alternative to RMT. Company wide understanding of [the] issue at hand. Also a company wide effort because before [no] one had paid attention or [really] cared. Plex was a direct step to try to combat it”.

CCP also announced that they were beginning to take enforcement action (destruction of resources) against both alliances and those who provided safe havens for botters, which was, as per Eve News 24 reports, unpopular amongst some alliance leaders. Accounts of the event also note that “one man got up and asked if CCP had considered making botting legal”, with Nosy Gamer claiming that the “attitude that botting and illicit RMT are acceptable activities is unfortunately reflected amongst some alliance leaders” (Nosy Gamer, 2012). Regardless, it is clear that CCP have both acknowledged the impact of their inaction in encouraging real money trading and botting, and are increasingly taking action to enforce their rules and terms of service, although the community appears to be less involved in the process than during the participant-led action described in Chapter 5. Indeed, Eve News 24 reported that CCP had “discussed the player enforcement aspect but they feel it is more of a game design issue”

214

8. Conclusion

This research has described and analysed the modes of self-governance developed by participants within each of my case studies, the MMORPG Eve Online and the offshore gambling industry an industry estimated to be worth $29.3 billion in 2010. Additionally, it has identified and described the problems facing contemporary gaming environments, both in the specific context of virtual worlds or massively multiplayer games and as they may extend to other online communities and social networking services. Key amongst these conditions are the geographic disparity of their members and organisations, the problems of enforcing terms and conditions, the potential for disputes and the strength of the community that allows information regarding the actions of industry participants to spread easily.

Through these case studies I also developed a preliminary set of conditions for participant driven self-governance to exist and be applicable to specific online platforms. While future work is necessary to both develop and deepen our understanding of these conditions and to then consider their applicability to other environments – be they gaming platforms such as Eve Online or social networking services – establishing these key principles allows such work to be undertaken and easily compared to the results of my two studies.

This research has also highlighted the previously undocumented history of the offshore gambling industry, and suggests that just as Sportsbook Review and Casinomeister provided a player-driven regulatory option in the offshore gambling industry, a similar mediation approach could provide a mechanism for considering many of the disputes we see in contemporary online environments.

While the offshore gambling industry had little alternative, given the legal jurisdictions in which sportsbooks operated, the adopted system nonetheless proved to be preferred by a number of players over other systems, such as the Independent Betting Arbitration Service, primarily because of its ease of access and the speed of its decisions. There are, of course, other options for the regulation of online environments, but the offshore gambling system should at least be considered as one of them.

Ultimately, I argue that a participant driven mediation panel, making decisions based both on community norms and codified rules and terms of service, may be able to fill the regulatory gap that currently exists between customer service departments and the courts in many contemporary environments. Such a participant driven approach has the potential to encourage developers and platform operators into co-operating with them, and gives participants recourse when an operator,

215 who traditionally holds all of the power, challenges their position within an environment. The court of public opinion is a powerful tool, and one that could be utilised by a sufficiently organised participant body.

More generally, it became clear that many of the issues in disputes discussed by other authors, and identified within Eve Online, would not be new to observers from the gambling industry. In particular, disputes around cheating and the use of software to automate play or to gain an advantage apply in contemporary gaming environments just as it does in poker, casinos or sports betting. In both cases such activity could be described as either cheating or not, dependent on the terms and conditions, or norms, in play within the environment at the time. Similarly, the exploitation of bugs in the code follows similar patterns, and rules and norms are again required to decide when this crosses the boundaries of acceptable behaviour. Thus, through considering the norms surrounding cheating in both spaces, I transferred a definition of ‘advantage play’ commonly found in the offshore gambling industry to virtual worlds.

It is also increasingly the case in these platforms, as it has been for a number of years in the gambling industry, that developer fiat or the ‘god’ approach is no longer acceptable or suitable as the means of regulation and dispute resolution. Even when the terms of services are crystal clear, enforcement of these terms is not simple – botting, for example, is frequently difficult to detect, and even more difficult to prove to any degree of certainty. Participants in these environments need a way to resolve disputes where they either disagree with the enforcement action taken by the platform operator or claim to be a victim of mistaken identity (e.g. their activity looks like botting but was in fact performed manually).

Through an analysis of the alternatives proposed, and the problems of implementing them, I highlight the merits of participant-driven self-regulation. Further, the types of issues we are seeing in contemporary gaming environments are only a short step from being realised more widely on social networks and other platforms, which seem to be one future form of community. Dealing with the issue sensibly now will help shape the regulatory environment for other industries that are still emerging.

Beyond the form of participant based self-governance highlighted here, the fact that the conditions identified in this thesis exist suggests that contemporary online platforms have enough in common with the offshore gambling industry to make it worth considering the models that worked for a time, and those that failed, so as to avoid repeating the mistakes of those industries. By sheer volume of participants, if not actual capital, an approach to regulation of contemporary online platforms has

216 much at stake. Similarly, participants’ selection of enforcement mechanisms, e.g. the informal resolution of SBR rather than utilising IBAS and the courts for disputes with United Kingdom operators, highlights the importance of timeliness in dispute resolution.

8.1 Norms & Self Governance The community of Eve Online demonstrated through the botting example that they were capable of developing, publicising and enforcing a norm themselves. Players taking action against botting providers were, arguably, enforcing a forgotten rule – which I liken to Ostrom’s theory of memory loss – however, they were enforcing it as a norm that had established itself because of an increase in botting presence and subsequent effects on the Eve economy and other players.

CCP’s subsequent enforcement, lagging behind the community enforcement, showed that a norm can act as a signal to a rule, and indeed the community pressure exerted has shaped several CCP policy decisions, as outlined in Chapter 5. This mirrors the description of Curtis (1992) in one of the early text based multiplayer games, LambdaMOO, where he details the requests he received from players to codify norms so that they could be enforced. In both these cases the response was due to community growth, as Ostrom (2006) suggests from the commons situations she studied.

Additionally, the offshore gambling industry has also served to highlight – in a commercial space – Ostrom’s observations regarding norms and rules. Starting from a very basic set of principles, the offshore gambling industry has constructed rules as and when disputes arose. As the participant driven regulatory mechanism evolved within the industry, the rules became codified results of community discussions of the norms applicable to a situation. Often these were imitation norms, i.e. considering how the dispute would have been resolved in Las Vegas, England or Contract Law, and many sportsbooks operated unchallenged based on this understanding.

It thus seems clear to me that despite operating in a commercial, as opposed to a commons, environment, both the principles of norms and Ostrom’s observations have validity. I believe that the reason for this is fairly simple: in Eve Online, as in the offshore gambling industry, it is to the benefit of all participants that the environment and community continues to exist and prosper, whether that be for the commercial benefit of the company or for the social and financial investment of the participants.

McAdams’ Esteem Theory also applies to organisations. As demonstrated in Chapter 6, companies were willing to pay out – even if they believe themselves to be in the right – to avoid negative statements on sites such as Sportsbook Review and the resultant withholding of esteem from within the community that would follow. CCP’s response to the ‘Greed is Good’ event, and the Mittani CSM

217 event, give no reason to suggest such behaviour would not also be mirrored in the gaming industry; companies will always want their current and potential customers to hold them in high esteem, and one of the key abilities of a self-governance structure would be to impact on this esteem.

Strandburg’s (2004) work on willpower norms also highlights an area of concern. Just as with Ostrom’s (2006) theory of memory loss when rules or norms are not enforced, Strandburg’s concept of epistemic norms in which individuals conform to the behaviour of others was demonstrated through several of the players utilising bots in Chapter 5. That it could also apply to behaviours prohibited by the rules should provide caution to designers, and signify the importance of providing information to the player base on the consequences of their actions.

Another caution for developers is highlighted by Ostrom’s theory of imitation norms. With online environments particularly prone to dominant platforms and communities (such as World of Warcraft, Twitter and Facebook), it is important that it is clearly communicated to players how they may differ in the environment they are in. Just as it is reasonable for a US-based gambler used to Las Vegas norms to expect the same rules to apply, a World of Warcraft player who starts playing Eve Online will naturally carry norms from their previous environment with them. Unless such differences are clearly communicated, it is unreasonable for developers or regulators to sanction such behaviour.

Ostrom’s approach may also explain this lag. By defining a rule as a norm plus enforcement, it is highlighted that the norm generally precedes the rule, at least to the extent they are not arbitrary rules imposed by an external authority. As I proceed to consider enforcement more broadly, outside of Eve Online, it is worth considering that using norms theory, be it that of McAdams, Strandburg or Ostrom, as an approach to identifying those aspects of the environment that require codification and enforcement – either internally or by an external body – is a worthwhile and illuminating approach.

Ostrom argues that the size of community is important, and that as the community grows its norms need to become rules. While I agree with the latter point, and indeed have demonstrated it in both gaming and gambling spaces, I do not agree with the former. It appears to me that what is key is the relationship between the size of the community and the speed and quantity of communication. The gaming industry is indisputably larger than the offshore gambling community, but it also receives substantially more press coverage. The mainstream media reads sites such as IGN, Reddit, Joystiq, Gamespot and others, and thus game-related controversies and disputes would receive the

218 attention necessary to ‘simulate’ a smaller community. Indeed, the response to Mittani’s comments at FanFest serves to demonstrate this.

8.2 Methodology In this research I adopted a qualitative case study approach. Utilising theoretical sampling, I identified those scenarios where norms were disputed amongst the stakeholders of the environment, and collected data on how these situations developed and were resolved, combining my own observations within the environments with data from other sources, such as forums, blogs and Twitter. Drawing from this data I have demonstrated that using norms as a theoretical framework to identify and understand participants within a community is also a worthwhile approach.

Through identifying a number of methodological and ethical challenges, particularly with regard to Eve Online, this research has demonstrated that in contemporary online environments it is increasingly difficult to conduct a comprehensive study, whether that study is based on participant observation approaches, textual analysis of the meta-game, or – as in this case – a combination of the two. Instead, it seems appropriate in contemporary environments to combine the work of a number of researchers, each focussing on specific sections (e.g. new player experience or end-game) of the environment to which they have access.

8.3 Regulatory Options A number of suggestions have been made for how to regulate such environments, ranging from keeping the status quo, where designers effectively have freedom to design and implement environments (developer fiat) and deal with customers in any way they feel appropriate, through to formal top-down regulation through the legal system. Self-regulation has also been suggested in a number of forms, both through bodies such as eCOGRA and proposals for arbitration, such as that put forth by Reynolds and de Zwart. Whilst rating bodies have historically struggled to consider online content, an arbitration-based system does seem the most logical, and although the Reynolds & de Zwart (2011) proposal has significant merit, I believe a participant driven system has significant advantages.

Another approach increasingly tested is to afford democratic representation to players. One problem, identified in part through my work on Eve Online, is that of the current methods for democratic representation of players within bodies such as the Council of Stellar Management (CSM). The current method of allowing each registered account to vote on the election of members

219 mirrors the democratic political system well, however, it is not a co-incidence that the majority of democratic nations have a small number of political parties representing particular viewpoints.

Based on figures from the 2012 CSM election, Eve Online has 355,435 eligible voters, of which 59,109 voted. Of the 14 elected representatives (ignoring subsequent removals) the lowest ranked candidate received just 1,282 votes, or 0.36%. It is therefore simple to see that even a small alliance, instructing their members to vote for a particular candidate, could have a representative elected to the CSM to represent their interests. To this extent, alliances become, in effect, political parties. At the same time, just 28.65% of votes (or 16,936) were from members who had been playing for less than 250 days (of which 8,447 had played less than 30 days – it is worth considering whether some of these may have been accounts registered simply to vote), which must draw into question how likely it is to obtain reasonable CSM representation for new players. It may be worth considering whether this can be improved, possibly by requiring that a portion (1/3) of CSM members have less than 1 year of game time.

8.4 Self-Governance as a solution Hornle & Zammit (2010) note that one advantage of self-regulation “is that rules and standards set by the operators themselves are likely to be more practical, based on business practices, since the operators have a better understanding of their own business than a legislator or regulator has”. Similarly, Purewal’s (2012) contention that “there is the potential for some form of industry wide self-regulation here based on more enlightened working practices as well a greater willingness to name and shame the view bad apples that spoil the barrel” is highly representative of the system I have outlined, but with some modifications for publicity, not unlike the proposal of Reynolds & de Zwart (2011).

Despite this, and as mentioned previously, it is important to highlight that there are some cases where the objectives of the operators may not align with those of the participants. A mediation system, such as that which operates in the offshore gambling industry, is ideally placed to take the best aspects of self-regulation and supplement them with a third-party perspective, overcoming some of these limitations, but there remains a place for governments and the judiciary to provide the ultimate protection against unfair or illegal practices, where self-regulatory mechanisms lack either the capability to reach decisions, or enforce verdicts.

A key aspect in considering the wider application of the self-regulatory approaches adopted in the offshore gambling industry was to understand the conditions that enabled it to prosper. Key amongst these were the geographic disparity of participants and operators; a regulatory gap

220 between customer service departments and other options (indeed, in many cases with offshore operators, there was no other option); vague and problematically enforced terms of service; cause for disputes that participants wanted resolved, particularly involving real money in the offshore industry; and a community that was able to carry news of operators to a large portion of the participant base.

As I was to later identify, these conditions also largely exist in other contemporary online environments. The success of operations such as Sportsbook Review and Casinomeister can be largely put down to three things: the trust of their user base, their speed, and their transparency, at least in comparison to services such as IBAS. While resolving disputes in the courts would be even more transparent, such an option was not practical for the majority of the disputes discussed. However, it is the combination of speed and (partial) transparency that appears to appeal to these user communities.

One aspect highlighted by the examples outlined in this thesis is that such a body is better set up to mediate individual disputes than overall policy decisions; however, even in those cases they may have a useful role to play in publicising participants’ positions. Similarly, some disputes where large amounts of compensation (especially in environments that do not offer a cash-out mechanism) are demanded would better be handled by legal jurisdiction. Smaller cases could be handled by the mediation system, and environments could be requested by the mediators to restore property or other assets within the environment, which the participant would then be able to realise through traditional methods.

I also concluded that there were seven broadly different categories of cases that may be considered as arising in online environments. These can themselves be divided into those with demands within the environment and those with demands outside of the environment. Within the environment there can be disputes between participants, between participant and operator and between operator and participant. The latter two also exist with demands outside the environment, but here there also exist cases between either participant or operator and a third party. Specific cases (and counter-suits) may also contain two or more of these types of disputes.

The mediation system discussed here would be sufficient to act on those disputes with demands within the environment, were it to receive sufficient buy-in from players and providers and if those three categories are representative of the majority of cases that are likely to be raised in online environments. The cases of Marvel vs. City of Heroes, or Blizzard vs. WOWGlider are relatively

221 unusual in the wider context of the daily operation of these environments, and thus would be likely to require external legal jurisdiction.

What this thesis has not examined in detail are the differences between the Offshore Gambling Industry and online environments. Across the broad range of current online environments, the differences are substantial, and a detailed examination of the differences amongst them, and then to the gambling industry, was beyond the scope of this analysis. However, such an analysis may be worthwhile, and may identify reasons why such a mediation system has not evolved in – for example – the gaming community.

Chief amongst these reasons, and as I have discussed throughout the thesis, may be the motivations of players. Specifically, while participants in the offshore gambling industry were clearly motivated by protecting their financial interests, for the majority of online environments the goal is to protect not financial capital, but social. Weighed against this however is that the social investment in virtual worlds is significant, and participants cannot shift from one virtual world to another as easily as they can from one sportsbook to another. However, that the stakes are primarily social rather than financial is significant, and worthy of future consideration.

While this may go some way to explaining the reason such a system has not evolved to date, I do not believe it is necessary an argument against such a system being implemented. Indeed, it is my belief that as the social, and financial, stakes participants have invested in these environments increases, the likelihood that such a system emerges from the community similarly increases. That the mediation system in the offshore gambling industry emerged from the community is significant; imposing such a system from the industry, or from a third-party body may well not have been as effective.

Finally, I would also recommend that as authorities come to regulate online gambling – including current UK and Australian reviews – the offshore model be given some prominence. A public and media facing body with fast mediation and a reasonable level of transparency has been proven effective, and is something that regulators – from gambling to gaming, but potentially also in more established fields such as media, television and utilities – would do well to take note of. Participants in these environments expect more immediate action, and contemporary media channels are designed to spread news fast. Whether one is regulating gambling, television or electricity there are certainly lessons that can be drawn from the experiences of the offshore gambling industry as society continues to move online and increased speed and transparency come to be expected of other regulatory bodies.

222

8.5 Regulatory body considerations Regardless of the regulatory model adopted, the business model has implications. Reynolds and de Zwart (2011) propose that their arbitration board “would be a company limited by guarantee / not for profit legally constituted in the US, EU and Australasia” (p.9) and note “funding is likely to come from publishers” (p. 10), and any participant driven approach may also need seed funding to establish a web presence and publicise their efforts.

As demonstrated through the gambling industry examples seen in Chapter 6, the business model does have implications for the success of the body. An over-reliance on advertising from publishers could, for example, be seen to influence, or actually influence, the decisions of a voluntary player- based operation, and a perceived over-reliance on industry funding and over-representation of industry members can, as seen with IBAS, at least influence the perception of an arbitration body.

There are many different ways that a mediation system may emerge from the community, and the precise form is likely to vary depending on the nature of the industry. It may be on a per-platform basis, with websites and personalities emerging that are able to mediate disputes between participants and operators of that specific platform or game. It may also be that a website or service that begins as dedicated for a specific game then expands to cover a particular genre, or games more broadly. Similarly, existing communities such as Reddit or Kotaku may become de-facto mediators; able to exert sufficient community pressure that the opinion of the community is upheld, although whether such a result would be desirable is open to question, given that it may lead to uniformity in design to appease the ‘loudest’ contingent.

However, it is clear that mediators may emerge from a range of roles within the community, and significant organised groups of players, as found at such venues, are amongst the most likely to be able to effect change. In the case of the offshore gambling industry, gamblers and industry professionals both emerged as mediators, as did third parties simply launching a business venture, and each of these groups may also prove significant to the future regulation of the online gaming space.

Similarly, the business model may vary. If it emerges from the community of an existing game, it may start as a free service provided by ‘productive players’, akin to Taylor’s (2006, 2006b) or the player created content Banks (2002) discusses. Alternatively, the body may emerge specifically as a business venture by participants who have observed the success of such methods in other industries, or from a group of participants wanting to hold a specific game or company to account, again with room to grow across the industry.

223

Whichever system emerges, there a role for appropriate government regulation, and establishing the boundaries of the different forms of regulation will be a necessary part of the evolution process. This thesis does not propose nor design and implement a specific implementation, as I suggest that if any of these possibilities does eventuate, it is likely to be the most appropriate for the community at that time; in the same way that forum mediation and Sportsbook Review were both appropriate for the offshore gambling industry at different times.

However, having competing mediation options for any platform is unlikely to be beneficial, especially if any of them have advertising or sponsorship relations with companies involved in the dispute. If just one party with a reputation or claim to be a mediator can be convinced to argue against the majority opinion – as demonstrated with the Easystreet Sportsbook case in Chapter 6 – such a body can actually prevent a decision being reached and implemented. The offshore gambling industry has demonstrated that it proved beneficial to have a common industry standard, even if it reached decisions that people disagreed with.

Whilst binding arbitration may be a solution for some challenges faced by participants in these platforms, it is one that would be difficult to implement. It is not clear that the solution offered by Reynolds & de Zwart (2011) would be binding, and indeed they note, “the existence of an arbitration body does not preclude the option of legal action” (p. 9). However, as was discussed with formation of the TOW mediation panel in Chapter 6, “there will be books, and players, that refuse to cooperate, but [...] at least the 'viewing public' will be able to form a better opinion on some books based on these 'dispute' results...However they come about. A book 'refusing' to cooperate with the panel, could tell the story itself” (Uncle B, in PeepsPlace, 2005).

The argument in favour of the TOW Arbitration panels, that “The strength resides in its status of independent body, therefore the actions that may lead to the non voluntary abidance to its rulings can, and are, embraced by more portals and sites” (TOW, 2005), is also notable. These principles equally apply to Sportsbook Review in its current incarnation, and would, I suggest, have been better proven in that context than the failure of the TOW Arbitration Panels after the case involving Olympic Sportsbook. Regardless, as consideration is given to adopting such a regulatory approach in other industries, independence and the risk of competing bodies undermining decisions is an important consideration.

8.6 Future work This research has also highlighted a number of distinct areas that would benefit from further study. A number of these would serve to strengthen the conclusions of this thesis with regard to wider

224 application, while others are not within the scope of this thesis to consider thoroughly, but are themselves worthy of separate projects, and I will detail these below.

Each of the conditions I discussed previously is preliminary and provides a foundation for further research. As with Ostrom’s early work, it is difficult to draw firm conclusions from just the two case studies considered within this thesis; however, conducting these case studies contributes significantly to the literature around online governance and to self-governance more generally. This work also provides a starting point from which to test whether the observations and hypothesis developed through this thesis apply in other online environments that feature similarly disparate users, vague terms and conditions, disputes and strength of community. These conditions represent only my first attempt at understanding the conditions necessary for self-governance, and future work is necessary to consider other communities and platforms and how these conditions may apply to those, as well as whether participant activity within those environments may add further conditions or otherwise develop an understanding of whether and how self-governance is likely to operate in contemporary online platforms.

Such future work need not be limited to the types of platform I have described in this thesis. Indeed, the general contention that communities online are able to self-organise seems likely to apply more broadly, and I intend to consider this construct and the conditions emerging from these case studies in a range of situations. It remains to be seen what role the nature of a platform pays, whether self- regulation is less likely, or harder, to develop in well established commercial environments (such as social networking services including Facebook and Twitter than it is in genuinely emergent communities, such as those developed for the trading of collectibles (such as pins and trading cards). Again, each of the conditions identified and detailed previously may well impact on the possibilities for self-governance, and others may also be identified.

In a similar vein, future work could investigate the role that community sites such as Kotaku and Reddit play in the regulation of a range of online environments. It would be significant to establish whether there is current a size of community, or size of game or platform, for which a community such as Reddit is able to exert significant pressure. For example, does the community have a more significant input into the development and evolution of a small independent game than a large MMO, and if so what are the implications for the forms of dispute resolution and mediation discussed in this thesis. To answer such questions, further case studies would have to be conducted, which, following the theoretical sampling approach detailed previously, serve to confirm or disprove this hypothesis while enabling further theory building by expanding the breadth of studies conducted.

225

To be clear, it remains unproven whether the case studies here, Eve Online and the Offshore gambling industry, are in any way generalizable to these other platforms and games. However, an attempt to understand why community regulation has met success in the offshore gambling industry, and to what extent that is extendable to other online environments must begin somewhere; and through the comparisons to Eve Online, it is clear that a number of the contributory factors apply to both environments. It is only through applying this methodology to other environments, be they games or social networks, that the generalizability of this form of regulation can be proven. Similarly, the differences between these case studies and the offshore gambling industry could be more explicitly examined, in order to determine why such a mediation system has not evolved to date.

Also worthy of consideration is the extent to which a community has to be self-aware for such mediation systems to prosper. This could have several applications, each worthy of future research, including disputes in new games or platforms in which there is not yet a critical mass of players, and games or platforms in which the majority of players do not, and have no interest in, participating in discussion community norms, as highlighted by the low voting percentage on Facebook Terms of Service discussions for example. Where you have competing motives, be that social vs. financial, or casual vs. invested, the generalizability of mechanisms across communities must at least be questioned, however the scope of the industry is too large to conduct a comprehensive audit in research such as this, and these two case studies stand as a significant first effort, subject to verification and expansion by future case studies, as with Ostrom’s early case studies.

Even given applicability, it remains to be established whether knowledge that such a system can work extends into it being possible to implement. In both cases considered in this thesis, attempts at regulation and influence came from within the community, which is of course very different to an outsider approaching a community and suggesting that they form services and deploy this or that model. Whether this is merely the identification and description of a phenomenon or whether it also has practical applications to the ongoing discussion of formulating regulatory approaches for online platforms has yet to be established. Similarly, whilst I have demonstrated the benefits of self- governance in the offshore gambling industry, it has yet to be established whether the approach is genuinely desirable, either to the offshore gambling industry or more widely, or whether it was merely a combination of circumstances that led to such an approach being the only option. Being able to compare self-governance with other approaches, where those approaches have a realistic chance of success, would also add significantly to this work.

226

At multiple stages in this research I touched broadly on the challenges of identifying norms in any given environment. Whilst I discussed the methodological challenges that were specific to Eve Online and the offshore gambling industry, there are also more general and wide-ranging problems that applied to identifying norms, including the core question of what proportion of a community has to agree with a certain position for it to be a norm. A more generalised guide to identifying norms within environments would certainly aid the repeatability of such case studies.

Future work could also consider the potential applicability of Ostrom’s IAD framework to the type of spaces considered within this thesis, and online environments more broadly. From my initial observations within the two case studies featured in this thesis, it appears that a number of the principles Ostrom identified as conditions for self-governance in commons situations may also apply to online environments, which would not be surprising given the shared goals identified previously. Additionally, it would be beneficial to quantify a number of the conditions I identified in this thesis, particularly around how you might determine whether a community is sufficiently centralised to have information regarding operators’ flow to the necessary participants.

As I indicated previously, another substantial undertaking would be to conduct a detailed history and analysis of the offshore gambling industry. What I have presented within this thesis is merely a very broad overview of its evolution, along with a handful of disputes selected from a history of thousands. Many of those disputes are documented through websites and community forums, whilst others are documented only within the records of the arbitrator and participants, if even that. My reason for not delving deeper was partly scope; the examples included were sufficient for highlighting the process, which was the purpose of the gambling material in this thesis, however it was also a question of method and ethics.

A systematic approach, especially to the undocumented cases, would involve interviewing industry participants. At least one of these – Ken Weitzner, founder of TheRX & EOG – is deceased, while others have left the community scene and would require locating. Even among those participants you could locate, and those still active, there is the very real problem that you would be discussing cases with individuals subject to personal risk. With the bare minimum of three participants to a single dispute, you likely have one who owns, runs, or manages a criminal enterprise and is likely the subject of a US arrest warrant; one who received gambling income which they may or may not have disclosed, whilst also breaking US law (though it is worth noting individual gamblers are rarely, if ever, prosecuted); and one who is tied by bounds of confidence to the other two parties. Naming any of those involved risks documenting illegal activities.

227

Nonetheless, it is important to garner an understanding of the offshore gambling industry, both within the context of the gambling industry and the context of regulatory methods for online environments. It should be documented, and perhaps there will come a time where it can be. However, the detailed documentation of precedents established within this industry could be made suitably anonymous and of great use in discussing online environments more generally.

Another area that would benefit from further study concerns the norms surrounding cheating and advantage play, and where that line is drawn. As highlighted by the variety of authors I have cited in this thesis, there are a number of different opinions on this topic, with some accepting that players will try to seek an advantage and that it should be built into the game, whilst others argue that participants should be subject to strictly defined rules and merely play as the designer intended. Further work considering the range of disputes within the gambling sector, particularly around software aids, could build on the work of authors such as Consalvo (2007) and Taylor (2006c) to consider where the boundary between advantage play and cheating should be drawn. Work in other sectors, including Fantasy Sports, could also further develop this distinction.

Finally, I have used the term ‘gambling-like’ on several occasions in this thesis. However, again, I do not delineate it, but merely offer a number of examples of activities that could be comparable to gambling yet are freely permitted in a jurisdiction that bans gambling. I have particular interest in trading cards (both sport and games such as Magic: The Gathering) and fantasy sports. These two, as with the environments considered in this thesis, are largely online environments, yet they are regulated extremely differently to offshore gambling. It would be beneficial to conduct further study to consider whether participants within these environments see themselves as gamblers, and how the industries have – to date – avoided regulation.

228

References

Aarseth, E. J. (1997). Cybertext: Perspectives on Ergodic Literature. Baltimore, MA: The John Hopkins University Press.

Adrian, A. (2010). Law and Order in Virtual Worlds: Exploring Avatars, Their Ownership and Rights. : IGI.

Anderson, C. A., Gentile, D. A., & Buckley, K. E. (2007). Violent Video Game Effects on Children and Adolescents: Theory, Research, and Public Policy. USA: Oxford University Press.

Andrle, J.G. (2004). Winning Hand: A Proposal for an International Regulatory Schema with Respect to the Growing Online Gambling Dilemma in the United States. 37 Vand. J. Transnat'l L. 1389, p. 1389-1422

Angela (2011). Untitled. In ‘Lapham’ (2011), Iskbank.com Customers Speak out. Retrieved from http://evenews24.com/2011/09/23/rise-of-the-machines-the-human-face-of-botting/

Apter, M. J. (1991). A Structural phenomenology of play: A reversal theory approach. In M.J. Apter & J. H. Kerr (Eds.), Adult play (pp 13-30). Amsterdam: Swets & Beitlinger B.V.

Au, W. J. (2003). Tax Revolt in Americana. Retrieved 1 June, 2011 from http://nwn.blogs.com/nwn/2003/09/tax_revolt_in_a.html.

Augen, J. (2009). Day Trading Options: Profiting from Price Distortions in Very Brief Time Frames. FT Press: New Jersey, NJ.

Austin, J. (1954). The province of jurisprudence (1832). London Weidenfeld & Nicolson

Axon, S. (2008). Picking apart the MetaPlace Bill of Rights. Retrieved from http://massively.joystiq.com/2008/09/18/picking-apart-the-metaplace-bill-of-rights/.

Banks, J. & Humphreys, S. (2008). The labour of user co-creators: Emergent social network markets? Convergence: The International Journal of Research Into New Media Technologies, 14(4), p. 401-418

Balkin, J.M. (1999). Free Speech and Hostile Environments. 99 Colum. L. Rev. 2295, 2296-2305.

229

Balkin, J. M. (2004). Virtual Liberty: Freedom to Design and Freedom to Play in Virtual Worlds (2004). Faculty Scholarship Series, Paper 239. Retrieved from http://digitalcommons.law.yale.edu/fss_papers/239

Barnes, G. M., Welte, J. W., Hoffman, J. H., & Tidwell, M.-C. O. (2009). Gambling, alcohol, and other substance use among youth in the United States. Journal of studies on alcohol and drugs, 70(1), 134- 142. Rutgers University.

Banks, J. (2002). Çhapter 8: Gamers as Co-creators: Enlisting the Virtual Audience – A Report from the Net Face’, In M.Balnaves, T. O’Regan & J. Sternberg (eds), Mobilising the Audience (pp. 188-212). Brisbane: University of Queensland Press.

Banks, J (2009). Co-Creative expertise: Auran Games and Fury – a case study. Media International Australia : incorporating Culture and Policy, 130 (February), 77-89.

Banks, J., & Potts, J. (2010). Co-creating games: a co-evolutionary analysis. New Media & Society, 12(2), 253-270.

Barber, B. M., Lee, Y., Liu, Y. & Odean, T. (2004), Do individual day traders make money? Evidence from Taiwan. Working paper, UC-Davis, Davis, CA.

Barnett, C. (2009). Towards a methodology of postmodern assemblage: Adolescent identity in the age of social networking. Philosophical Studies in Education, 40, 200-210.

Bartle, R.A. (1990). Interactive Multi-User Computer Games. Retrieved from ftp://ftp.lambda..mud.org/pub/MOO/papers/mudreport.txt.

Bartle, R.A. (1999). Envisioning Cyberspace, http://mud.co.uk/richard/ec.htm

Bartle, R. (2004). . USA: New Riders.

Bartle, R. (2004b). Pitfalls of Virtual Property. The Themis Group white paper. Retrieved from http://www.themis-group.com/uploads/Pitfalls of Virtual Property.pdf

Bartle, R. (2006a). Virtual Worldliness. In J. Balkin, & B.S.Noveck (Eds.), The State of Play: Law, Games and Virtual Worlds (pp. 31-54). New York: New York University Press

Bartle, R. (2006b). Why Governments aren’t Gods and Gods aren’t Governments. First Monday, Special Issue 7. Retrieved from http://www.firstmonday.org/ISSUES/special11_9/bartle/index.html

230

Bartle, R. (2012). Sense of Proportion. Retrieved from http://www.youhaventlived.com/qblog/2012/QBlog170512B.html .

Bednar, J., & Page, S. (2007). Can game(s) theory explain culture? Rationality and Society, 19(1), 65.

Benkler, Y. (2006). The wealth of networks. New Haven, CT: Yale University Press.

Birks, M. & Mills, J. (2011). Grounded Theory: A Practical Guide. Thousand Oaks, California: Sage Publications.

Bioware, 2007. Mass Effect. Seattle: Microsoft Game Studios

Blancato, J. (2007). Jumpgate: EVE’s Devs and the Friends They Keep, Part 2, Escapist Magazine, 10 February 2007. Retrieved from http://www.escapistmagazine.com/articles/view/editorials/interviews/1234-Jumpgate-EVEs-Devs- and-the-Friends-They-Keep-Part-2.

Blizzard Entertainment, 2004. World of Warcraft. France: Vivendi Universal

Bogost, I. (2007). Persuasive games: the expressive power of videogames. Boston, MA: MIT Press.

Boldrin, M., & Levine, D. K. (2009). Market structure and property rights in open source industries. Washington University Journal of Law and Policy, 30, 325.

Bowyer, J. Barton. 1982. Cheating; Deception in War & Magic, Games & Sports, Sex & Religion, Business & Con Games, Poliics & Espionage, Art & Science. New York: St. Martin’s Press

Bruns, A. (2008). Blogs, wikipedia, second life, and beyond: From production to produsage. New York, USA: Peter Lang.

Bruns, A. (2008b). Futures for Webcasting: Regulatory Approaches in Australia and the US. In Bloustien et al. (Eds), Sonic Synergies: Music, Technology, Community, Identity (pp. 17-26). Hampshire, UK: Ashgate Publishing

Bruns, A. (2011). How Long Is a Tweet? Mapping Dynamic Conversation Networks on Twitter Using Gawk and Gephi. Information, Communication & Society, 17 Nov. 2011

Bruns, A. & Burgess, J. (2011). Tools. Retrieved from http://mappingonlinepublics.net/resources/.

Bruns, A. & Burgess, J. (2012). Researching News Discussion on Twitter: New Methodologies. Journalism Studies, 13.5-6.

231

Bryman, A. (2004). Social Research Methods. Oxford: Oxford University Press

Burgess, J. E. & Green, J. B. (2008). Agency and Controversy in the YouTube Community. Proceedings IR 9.0: Rethinking Communities, Rethinking Place - Association of Internet Researchers (AoIR) conference, IT University of Copenhagen, Denmark (pp. 1-18).

Burgess, J. E. & Green, J. B. (2009). Youtube: Online Video and Participatory Culture. Cambridge, UK: Polity Press.

Bynum, T. W. 2006. Flourishing Ethics. Ethics and Inf. Technol. 8, 4 (Nov. 2006), 157-173.

Cabot, A.N., & Hannum, R.C. (2005). Poker: Public policy, law, mathematics and the future of an American tradition. Thomas M. Cooley Law Review, 22, 443-513.

Caillois, R. (1961/2001). Man, play and games. New York: Free Press of Glencoe, Inc

Calleja, G. & Woodford, D. (2009). ‘Gambling’, Encyclopaedia of Play: A Social History, Edited by Rodney Carlisle, Sage Publications, USA.

Callon, M. (1986). Some Elements of a Sociology of Translation: Domestication of the Scallops and the Fisherman of St Brieuc Bay. In Law, J. (ed) Power, Action and Belief: A New Sociology of Knowledge. London: Routledge & Kegan Paul Books Ltd.

Campbell, D.T. (1969). Reforms as Experiments. American Psychologist 24(4), 409–429.

Campbell, D.T. (1975). On the Conflicts between Biological and Social Evolution and between Psychology and Moral Tradition. American Psychologist 30(11), 1103–1126.

Carlsmith, K.M. (2002). Why do we punish?: Deterrence and just deserts as motives for punishment. Journal of Personality and Social Psychology, 83(2): 211 - 228

Castronova, E. (2005). Synthetic Worlds: The Business and Culture of Online Games. Chicago: The University of Chicago Press

Castronova, E. (2008). Exodus to the Virtual World: How Online Fun Is Changing Reality. Basingstoke, UK: Palgrave McMillan.

CCP Games. (2003 – 2012). Eve Online.

CCP Games. (2007). The Council of Stellar Management: Implementation of Deliberative, Democratically Elected, Council in EVE. Retrieved from http://community.eveonline.com/download/devblog/CSM.pdf

232

CCP Games. (2012). EVE Online EULA. Retrieved from http://community.eveonline.com/pnp/eula.asp

CCP Navigator. (2012). The 2012 Alliance Panel at Fanfest. Retrieved from http://community.eveonline.com/devblog.asp?a=blog&nbid=28575.

CCP Spitfire. (2011). Does ccp support botting/macro use in eve online?. Retrieved from http://eve- search.com/thread/1456701/page/1

CCP Sreegs. (2012). Team Security -Banning Bad Guys and also Bad Guys. Retrieved from http://community.eveonline.com/devblog.asp?a=blog&nbid=9133

CCP Pollux (2011). The Eve Security Taskforce & Report A Bot. Retrieved from http://community.eveonline.com/devblog.asp?a=blog&bid=945

Charmaz, K. & Mitchell, R.G. (2001). Grounded Theory in Ethnography. In Atkinson, P., Coffey, A., Delmont, S. Lofland, J. & Lofland, L. (eds), Handbook of Ethnography. Thousand Oaks, California: Sage Publications.

Charmaz, K. (2006). Constructing Grounded Theory. London: Sage.

Chen, M. (2011). Noobs. Peter Lang Publishing: Bern, Switzerland.

Cherney, L. (1994). Gender Differences in Text-Based Virtual reality. Proceedings of the Berkeley Conference on Women and Language. Retrieved from http://www.ghostweather.com/papers/cherny94gender.pdf.

Cherney, L. (1999). Conversation and community: chat in a virtual world. Stanford, CA: CSLI Publications.

Cooter, R. D. (1996). Decentralized law for a complex economy: The structural approach to adjudicating the new law merchant. University of Pennsylvania Law Review, 144(5), 1643-1696.

Considine, M. (1994). Public Policy: A Critical Approach, Melbourne, AU: Macmillan.

Consalvo, M. (2007). Cheating: Gaining Advantage in Videogames. Massachusetts: MIT Press

Cook, C. (2004). Gambling takes Center Stage in Upcoming Lineage II Update. Game Informer. Retrieved from http://www.gameinformer.com/News/Story/200412/N04.1202.1011.54164.htm, May 16 2008.

233

Copier, M. (2005). Connecting Worlds. Fantasy Role-Playing Games, Ritual Acts and the Magic Circle: Proceedings of DiGRA 2005 Conference: Changing Views – World in Play, Vancouver, Canada.

Cottingham, J. (1986). Partiality, Favouritism and Morality. The Philosophical Quarterly, 36(144): 357- 373

Craddock, K. D. (2004). The Cardstock Chase, Trading Cards: A Legal ? Review, 8(5): 310-317.

Crawford, C. (2003). Chris Crawford on game design. Indiana: New Riders

Croson, R., Fishman, P., & Pope, D.G. (2008). Poker superstars: Skill or luck? Chance, 21(4), 25-28.

Csíkszentmihályi, M. (1990). Flow: The Psychology of Optimal Experience. New York: Harper & Row.

Curtis, P. (1992). LambdaMOO Takes a New Direction. Retrieved from http://www.cc.gatech.edu/classes/AY2001/cs6470_fall/LTAND.html

Curtis, P. (2001). Not Just a Game: How LambdaMOO Came to Exist and What It Did to Get Back at Me. In Haynes, C.A. & Holmevik, J. R., High Wired: On the Design, Use, and Theory of Educational Moos. Michigan: University of Michigan Press.

Cypher, M. & Richardson, I. (2006). An actor-network approach to games and virtual environments. Proceedings of the 2006 international conference on Game research and development. Perth, WA: Murdoch University.

Dedonno, M., & Detterman, D. (2008). Poker is a skill. Gaming Law Review, 12, 31-36.

DeKoven, B. 2002. The Well-Played Game: A playful path to wholeness. Nebraska: IUniverse.

Deuze, M. (2007). Convergence culture in the creative industries. International Journal of Cultural Studies, 10(2), 243.

Dibbell, J. (1998). My Tiny Life. New York: Holt.

Dibbell, J. (2006). Play Money: Or, How I Quit My Day Job and Made Millions Trading Virtual Loot. New York: Basic Books.

DMA Games, 2002. Grand Theft Auto III. New York: Rockstar Games

Doctorow, C. (2007). Why Online Games are Dictatorships. Information Week. Retrieved from http://www.informationweek.com/news/internet/webdev/showArticle.jhtml?articleID=199100026

234

Donahue, D. (2012). The Sword and the Shield: Rule Enforcement in Virtual Worlds in a Time After Bragg and MDY. Rev. Litig. 31: 435-435.

Drennan, Penelope (2007). Ethnography of Play in a Massively Multi-Player Online Role Playing Game: Marketplaces, Team Work and Free Play PhD Thesis, School of Information Technology and Electrical Engineering , University of Queensland.

Dubois, A. & Gadde, L-E. (2002). Systematic combining: an abductive approach to case research. Journal of Business Research, 55, pp. 553-560.

Ducheneaut, N., Moore, R.J. & Nickell, E. (2004). Designing for Sociability in Massively Multiplayer Games: An Examination of the “Third Places” of SWG. Presented at Other Players - Conference on Multiplayer Phenomena, 2004 December 6-8, Copenhagen; Denmark.

Ducheneaut, N. and Moore, R.J. (2005). More than just 'XP': Learning social skills in massively multiplayer online games. Interactive Technology and Smart Education, 2(2), pp. 89-100.

Ducheneaut, N., Moore, R. J., & Nickell, E. (2007). Virtual “Third Places”: A case study of Sociability in Massively Multiplayer Games. In Proceedings of Computer Supported Cooperative Work 2007, 16 (1- 2) pp 129-166.

Duranske, B. (2008). Virtual Law: Navigating the Legal Landscape of Virtual Worlds. Chicago, Il: American Bar Association

Eisenhardt, K.M. (1989). Building Theories from Case Study Research. Academy of Management Review, 14(4), pp. 532-550.

Eisenhardt, K.M. (1991). Better Stories and Better Constructs: The Case for Rigor and Comparative Logic . Academy of Management Review, 16(3), pp. 620-627.

Eisenhardt, K.M. & Graebner, M.E. (2007). Theory Building from Cases: Opportunities and Challenges . Academy of Management Journal, 50(1), pp. 25-32.

Ellickson, R. C. (1991). Order without law : How neighbors settle disputes (reprint, illustrated ed.). Cambridge, Mass: Harvard University Press.

‘Eric’ (2011). Untitled. In ‘Lapham’ (2011), Iskbank.com Customers Speak out. Retrieved from http://evenews24.com/2011/09/23/rise-of-the-machines-the-human-face-of-botting/

235

Fairfield, J. (2007). Remarks for Itechlaw Conference, Chicago, 2007. Unpublished manuscript. Retrieved November 16, 2007 from http://www.law.indiana.edu/webinit/papers/fairfield_the_magic_circle_weiss.pdf

FDIC. (2010). Unlawful Internet Gambling Enforcement Act of 2006 Overview. Retrieved from http://www.fdic.gov/news/news/financial/2010/fil10035a.pdf.

Fetterman, D.M. (1998). Ethnography: Step by Step. Thousand Oaks, California: Sage Publications.

Fisk, M. (2011). Punter Protection (or lack thereof) in the Act. Retrieved from http://www.trackdata.com.au/Story.asp?Id=1837.

Fred (2011). Untitled. In ‘Riverini’ (2011), Rise of the Machines: The Human Face of Botting. Retrieved from http://evenews24.com/2011/09/23/rise-of-the-machines-the-human-face-of- botting/

Fugazii. (2011). A firsthand look into the RMT scene and a case for indifference. Retrieved from http://www.kugutsumen.com/content.php?144-Past-and-Present-A-firsthand-look-into-the-RMT- scene-and-a-case-for-indifference-1-2.

Galloway, A. R. (2006). Protocol: How Control Exists after Decentralization (Leonardo Books). Boston, MA: The MIT Press.

Gambling Act. (2005). UK Parliament. Retrieved from http://www.legislation.gov.uk/ukpga/2005/19/contents

Geere, D. (2011). EVE Online goes from seedy to seedier with 'establishments'. Retrieved from http://www.wired.co.uk/news/archive/2011-03/29/eve-establishments, 6 November 2012.

Giddings, S. (2006). Walkthrough: Videogames and technocultural form. PhD dissertation, University of the West of England, Bristol.

Glaser, B.G. (1998). Doing Grounded Theory: Issues and Discussions. Mill Valley, California: Sociology Press.

Goffman, E. (1974). Frame analysis: An essay on the organization of experience. London: Harper and

Row

Griffiths, M. (2004). Internet Gambling: Issues, Concerns, and Recommendations. CyberPsychology & Behavior, 6(6), 557-568.

236

Grimmelman (2003). The State of Play: On the Second Life Tax Revolt. Retrieved from http://lawmeme.research.yale.edu/modules.php?name=News&file=friend&op=FriendSend&sid=122 2, 6 November 2012.

Harmon, P. (2004). A Real-Life Debate On Free Expression In a Cyberspace City, New York Times, January 15, 2004. Retrieved from http://www.nytimes.com/2004/01/15/business/technology-a- real-life-debate-on-free-expression-in-a-cyberspace-city.html?pagewanted=all&src=pm

Henderson, H. (2010). BetonSports Customers Can Expect Payments Starting in June. Retrieved from http://www.osga.com/artman/publish/article_8616.shtml.

Hess, C. & Ostrom, E. (2007). Introduction: An overview of the knowledge commons. Understanding Knowledge As a Commons, 3-26.

Hetcher, S. A. (2004). Norms in a Wired World. UK: Cambridge University Press.

Hickman, T & Hickman, K.E. The Myth of the Magic Circle: Rejecting a Single Governance Model. University of California Irvine Law Review, 2(2) 537-574. Hine, C. (2000). Virtual Ethnography. Thousand Oaks, CA: Sage Publications Ltd.

Hsu, Wen & Wu (2009) - http://www.sciencedirect.com/science/article/pii/S0360131509001274

Hornle, G. & Zammit, B. (2010). Cross-border Online Gambling Law and Policy. Edward Elgar Publishing: Cheltenham, UK.

Huizinga, J. (1955). Homo Ludens: A study of the play element in culture. Boston: Beacon Press.

Humphreys, S., Fitzgerald, B., Banks, J. & Suzor, N. (2005). Fan based production for computer games: User led innovation, the 'drift of value' and the negotiation of intellectual property rights. Media International Australia Incorporating Culture and Policy: quarterly journal of media research and resources (114) (pp. 16-29).

Humphreys, S (2005). Productive users, intellectual property and governance: the challenges of computer games. Media and Arts Law Review 10(4), pp. 299-310

Humphreys, S. (2008). The challenges of intellectual property for users of Social Networking Sites: a case study of Ravelry. Mind Trek, October 7-10, 2008, Tampere, Finland. Retrieved from http://eprints.qut.edu.au/14858/

Humphreys, S. (2008b). Ruling the virtual world: Governance in massively multiplayer online games. European Journal of Cultural Studies, 11(2), 149-171

237

Humphreys, S. (2009). Discursive constructions of MMOGs and some implications for policy and regulation. Media International Australia: Incorporating Culture and Policy, 130, 53-65.

Humphreys, S. & de Zwart, M. (2012). Griefing, Massacres, Discrimination, and Art: The Limits of Overlapping Rule Sets in Online Games. University of California Irvine Law Review, 2(2) 507-536.

Huizinga, J. 1955. Homo Ludens: A study of the play element in culture. Boston: Beacon Press.

Hurt, C. (2006). Regulating Public Morals and Private Markets: Online Securities Trading, Internet gambling, and the Speculation Paradox . 86 B.U. L. Rev, pp. 371-441

IBAS (n.d.) Adjudication Case Studies. Retrieved from http://ibas- uk.com/adjudicationCase.php?adjudID=34.

Interactive Gambling Act (2001). Australian Government. Retrieved from http://www.austlii.edu.au/au/legis/cth/consol_act/iga2001193/.

Jasanoff, S., Markle, G., Petersen, J. & Pinch, T. (eds.) (1995) Handbook of Science and Technology Studies. Newbury Park, CA: Sage

Jeremy. (2010). Magic The Gathering… or was it Gambling? Online. Retrieved from http://blog.buymorecards.net/blog/2010/07/24/mtgo/

Jenkins, H. (2008). Convergence Culture: Where Old and New Media Collide. New York: NYU Press.

Johnson, J. P. (1999). Open source software: Private provision of a public good. Journal of Economics & Management Strategy 11(4), pp. 637-662

Juul, J. (2005). Half Real. Videogames between Real Rules and Fictional Worlds. Cambridge, MA: The MIT Press.

Juul, J. (2010). A Casual Revolution. Cambridge, MA: The MIT Press

Kelly, T. (2010). ‘Ethical Design: Are Most Social Games Just Virtual Slot Machines?’ Retrieved from http://www.gamasutra.com/blogs/TadhgKelly/20100126/4239/Ethical_Design_Are_Most_Social_Ga mes_Just_Virtual_Slot_Machines.php

Kendall, L. (2002). Hanging out in the virtual pub: Masculinities and relationships online. Berkeley, CA: University of California Press.

Kirkpatrick, G. (2009). Technology: Taylor’s Play Between Worlds. In Devine, F. & Heath, S. (eds) Doing Social Science Research, pp. 13-32. Basingstoke, England: Palgrave Macmillan.

238

King, S. A. (1999). Internet Gambling and : Illustrative Examples of the Psychological Consequences of Communication Anarchy. CyberPsychology & Behavior, 2(3), 175-193

Kolo & Baur (2004). Living a Virtual Life: Social Dynamics of Online Gaming. Game Studies 4(1). Retrieved from http://www.gamestudies.org/0401/kolo/

Kosak, D. (2002). What’s this world coming to? The future of massively multiplayer games. Gamespy (17 April). Retrieved from http://web.archive.org/web/20050309024259/http://archive.gamespy.com/gdc2002/mmog/

Koster, R. (n.d.). The Laws of Online World Design . Retrieved from http://www.raphkoster.com/gaming/laws.shtml

Koster, R. (2005). A Theory of Fun for Game Design. Phoenix, AZ: Paraglyph Press

Koster, R. (2006). Declaring the Rights of Players. In J. M. Balkin & B. S. Noveck (Eds.), The State of Play (pp. 55-67). New York, NY: New York University Press.

Koster, R. (2008). Declaring the Rights of MetaPlace Users. Retrieved from http://www.raphkoster.com/2008/09/15/declaring-the-rights-of-metaplace-users/.

Kyle, S. (2012). Eve Vegas – Bots and Security, leaders to be accountable for permitting renters/corps botting. Retrieved from http://evenews24.com/2012/10/08/eve-vegas-bots-and-security-leaders-to- be-accounted-for-renterscorps-botting/

Lamoreux, E., Baron, S. & Stewart, C. (2009). Intellectual Property Law & Interactive Media. New York, NY: Peter Lang

Lapham. (2011). Iskbank.com: The Vadim Interview, Eve News 24, 14 March 2011. Retrieved from http://www.evenews24.com/2011/03/14/iskbank-com-the-vadim-interview/

Lapham. (2011b). Iskbank.com: An Expert Perspective, Eve News 24, 20 March 2011. Retrieved from http://evenews24.com/2011/03/20/iskbank-com-an-expert-perspective/

Lastowka & Hunter (2003). The Laws of the Virtual Worlds. Retrieved from http://ssrn.com/abstract=402860

Lastowka, G. F. (2010). Virtual justice: The new laws of online worlds. New Haven, Connecticut: Yale University Press.

239

Latour, B. (1987). Science in Action: How to Follow Scientists and Engineers Through Society. Milton Keynes: Open University Press.

Latour, B. (2005). Reassembling the social: an introduction to actor-network-theory. Oxford, UK: Oxford University Press.

Law, J. (1992). Notes on the Theory of the Actor Network: Ordering, Strategy, and Heterogenity. Retrieved from http://www.lancs.ac.uk/fass/sociology/papers/law-notes-on-ant.pdf

Lee, S., N. Moisa & M. Weiss (2003). Open-source as a Signalling Device – An Economic Analysis. Department of Finance, Goethe University, Frankfurt: Working Paper Series in Finance and Accounting No. 102. Retrieved from http://www.finance.uni-frankfurt.de/wp/275.pdf Lemley, M. A. (2012). The Dubious Autonomy of Virtual Worlds. University of California Irvine Law Review, 2(2) 575-583. Lemster (2012). A Plea to Reason: Allow Hydra and Outbreak to compete Retrieved from https://forums.eveonline.com/default.aspx?g=posts&t=113954&p=3. Levitt, S.D., & Miles, D.J. (2011). The role of skill versus luck in poker: Evidence from the world series of poker. Working Paper 17023, National Bureau of Economic Research, http://www.nber.org/papers/w17023.

Llanes, G. (2007) Technology Sharing in Open Source. Retrieved from http://www.eco.uc3m.es/temp/agenda/Gaston_LLanes.pdf

Lessig, L. (2004). Free culture: How big media uses technology and the law to lock down culture and control creativity. Westminster, London: Penguin.

Lipset , S. M. Trow , M. Coleman , J. (1956). Union democracy. The inside politics of the International Typographical Union. New York: The Free Press

Ludlow, P. & Wallace, M. (2007). The Second Life Herald. Cambridge, MA: The MIT Press

Majorwager. (2001). Opinion of the Mediation Board, Case #1. Retrieved from http://web.archive.org/web/20040804160829/http:/majorwager.com/articles/mediations/case001. htm.

Majorwager. (2002). An update on the state of affairs at Aces Gold [Forum Thread]. Retrieved from http://www.majorwager.com/forums/mess-hall/94565-update-state-affairs-aces-gold.html.

Majorwager. (2003). MAJORWAGER mediation board [Forum Thread]. Retrieved from http://www.majorwager.com/forums/mess-hall/116599-majorwager-mediation-board.html.

240

Majorwager. (2004). Dispute with MVP Sportsbook [Forum Thread]. Retrieved from http://www.majorwager.com/forums/mess-hall/2091-dispute-mvp-sportsbook.html.

Majorwager. (2005). BCN’s decision after mucho talking [Forum Thread]. Retrieved from http://www.majorwager.com/forums/mess-hall/47036-bcns-decision-after-mucho-talking.html.

Malaby, T.M. (2007). Beyond Play: A New Approach to Games, Games and Culture, vol. 2, no. 2, pp. 95-113

Malaby, T. M. (2009). Making virtual worlds : Linden lab and second life (illustrated ed.). Ithaca: Cornell University Press.

Majone, G. (1989) Evidence, Argument, and Persuasion in the Policy Process, New Haven, CT: Yale University Press.

‘Manny’ (2010). The Summer of 10 an expose on RMT. Retrieved from http://www.kugutsumen.com/showthread.php?7212-The-summer-of-10-an-expose-on-RMT

Mangion, G. (2010). Perspective from Malta: Money Laundering and Its Relation to Online Gambling. Gaming Law Review and Economics. June 2010, 14(5): 363-370.

Manninen (2003). Interaction forms and communicative actions in multiplayer games . Game Studies, 3(1). Retrieved from http://gamestudies.org/0301/manninen/

‘Mark’ (2011). Untitled. In ‘Lapham’ (2011), Iskbank.com Customers Speak out. Retrieved from http://evenews24.com/2011/09/23/rise-of-the-machines-the-human-face-of-botting/

Marks, R. B. (2003). EverQuest companion: The inside lore of the game world. New York: McGraw- Hill/Osborne.

Marvel. (2004). Complaint against NCSoft and Cryptic Studios (11 November 2004). https://www.eff.org/cases/marvel-v-ncsoft

McAdams, R. H. (1997). The origin, development, and regulation of norms, Michigan Law Review, 96, 338-433.

McKee, A. (2003). Textual Analysis: A Beginners Guide. SAGE: New York, NY.

McNeill, P. & Chapman, S. (2005). Research Methods. New York: Routledge.

Methenitis, M. (2007). A Tale of Two Worlds: New U.S. Gambling Laws and the MMORPG. Gaming Law Review. 11(4), 436-439.

241

Miller, R. (2006). The Need for Self Regulation and Alternative Dispute Resolution to Moderate Consumer Perceptions of Perceived Risk with Internet Gambling. UNLV Gaming

Mnookin, J. L. (1996). Virtual(ly) Law: The Emergence of Law in LambdaMOO. Journal of Computer- Mediated Communication (2.1:1). Retrieved from http://jcmc.indiana.edu/vol2/issue1/lambda.html

Montoya, I. (2011). Parley – What’s the big deal with Bots? , Eve News 24, 15 September 2011. Retrieved from http://www.evenews24.com/2011/09/15/imigo-montoya-parley-whats-the-big- deal-with-bots/

Mulligan, J. (2000). Mommy, she talked dirty! HappyPuppy, 9(28). http://www.happypuppy.com/.

Mulligan, J. & Patrovsky, B. (2003) Developing Online Games. USA: New Riders.

Murray, J. H. (1997). Hamlet on the Holodeck. New York, NY: The Free Press.

Mustonen, M. (2003). Copyleft--The economics of linux and other open source software. Information Economics and Policy, 15(1), 99-121.

Myers, D. (2008). Play and punishment: The sad and curious case of twixt. In Proceedings of the [player] conference, August 2008. IT University of Copenhagen.

Nan & Fu (2011). Pros and Cons of Government Game Permit in China. Thesis. http://gds.kookmin.ac.kr/site/intro/download/2011_thesis_29th.pdf#page=143

Nosy gamer. (2012). The Nosy Gamer: CCP’s War On Bots – Accountability. Retrieved from http://evenews24.com/2012/10/08/the-nosy-gamer-ccps-war-on-bots-accountability

Ostrom, E. (1990). Governing the commons : The evolution of institutions for collective action (illustrated, reprint ed.). Cambridge: Cambridge University Press.

Ostrom, E. (2002). Reformulating the commons. Ambiente & Sociedade, 5-25.

Ostrom, E., & Nagendra, H. (2006). Insights on linking forests, trees, and people from the air, on the ground, and in the laboratory. Proceedings of the National Academy of Sciences, 103(51).

Ostrom, E. (2008). Developing a method for analyzing institutional change. Alternative Institutional Structures: Evolution and Impact, 48.

Ostrom, E., Lam, W.F., Pradhan, P. & Shivakoti, G. (2011). Improving Irrigation in Asia: Sustainable Performance of an Innovative Intervention in Nepal. Edward Elgar Publishing: Cheltenham, UK.

242

Owens, M.D. (2008). The Limits of Coercion and the Case for I-Gaming Self-Regulation. Gaming Law Review and Economics. 12(2), pp. 93-100

Paul (2011). Untitled. In ‘Lapham’ (2011), Iskbank.com Customers Speak out. Retrieved from http://evenews24.com/2011/09/23/rise-of-the-machines-the-human-face-of-botting/

PeepsPlace. (2005). TOW sets up an arbitration panel [Forum Thread]. Retrieved from http://www.peepsplace.com/showthread.php?p=234428

Pettit, P. (2000). Republicanism: A Theory of Freedom and Government. Oxford, UK: Oxford University Press.

Pifotsky, R., Anthony, S.F., Thompson, M.W., Swindle, O. & Leary, T.B. (2000). Marketing Violent Entertainment to Children: A Review of Self-Regulation and Industry Practices in the Motion Picture, Music Recording & Electronic Game Industries, Report of the Federal Trade Commission (September).

PokerTracker Software, 2008. Poker Tracker. n.l.

Poteete, Janssen & Ostrom (2010). Working Together: Collective Action, the Commons, and Multiple Methods in Practice. Princeton University Press: New Jersey, USA.

Prensky, M. (2001). Digital game-based learning. New York, NY: McGraw-Hill.

Special Issue 7. Retrieved from http://www.firstmonday.org/ISSUES/special11_9/bartle/index.html

Prior, L. F. (2003). Using documents in social research. London: Sage.

Purewal, J. (2012). ‘Some Thoughts about Gacha’. Retrieved from http://www.gamerlaw.co.uk/2012/some-thoughts-about-gacha/

Purewal, J. (2012b). ‘How long until free to play and in-app purchases are regulated’. Retrieved from http://www.gamerlaw.co.uk/2012/how-long-until-free-to-play-and-in-app-purchases-are-regulated/

Quiggin, J. (2006). Blogs, wikis and creative innovation. International Journal of Cultural Studies, 9(4), 481.

R v. Kelly. (2008). EWCA Crim 137 (Eng.)

Rand Linden. (2011). Transactions and disputes between Residents. Retrieved from http://community.secondlife.com/t5/English-Knowledge-Base/Transactions-and-disputes-between- Residents/ta-p/799395

243

Reynolds, R. (2009). Competing Narratives in Virtual Worlds. In Third Person: Authoring and Exploring Vast Narratives. MIT Press, pp. 399-406.

Reynolds, R & de Zwart, M. (2011). Call of Duties: The Arbitration of Online Game Disputes. Conference Proceedings. Rutgers: Rutgers School of Communications and Information. Retrieved from http://www.scribd.com/doc/57503838/GBVG-Proceedings-v1.

Riot. (2012). The Tribunal Policy. Retrieved from http://na.leagueoflegends.com/legal/tribunal.

Riverini. (2011). Serious Business: GoonSwarm Federation Pilot Kicked for RMT’ing his titan to Pandemic Legion. Retrieved from http://evenews24.com/2011/08/31/serious-business-goonswarm- federation-pilot-kicked-for-rmting-his-titan-to-pandemic-legion/

RockPaperShotgun (2011). Eve Online: Audience with the King of Space. Retrieved from http://www.rockpapershotgun.com/2011/04/07/eve-online-audience-with-the-king-of-space/

Rollings, A. & Adams, E. (2003). Andrew Rollings and Ernest Adams on Game Design. Indiana: New Riders

Rose, I.N., & Owens, M.D. (2009). Internet gaming law (2nd ed.). New Rochelle, NY: Mary Ann Liebert, Inc. Publishers.

Rose, I. N. (2011). Is It Illegal to Make A Bet?, Gaming Law Review and Economics. September 2011, 15(9): 505-507. doi:10.1089/glre.2011.15902.

Salen, K. and Zimmerman, E. (2003). Rules of Play: Game Design Fundamentals. Boston, MA: The MIT Press.

SBR. (2005). MyBookie. Retrieved from http://www.sportsbookreview.com/mybookie/news/.

SBR. (2009). ToteSport. Retrieved from http://www.sportsbookreview.com/totesport/news/.

SBR. (2010). BeStake. Retrieved from http://www.sportsbookreview.com/sbr/bestake/.

SBR. (2011). TitanBet. Retrieved from http://www.sportsbookreview.com/sbr/titanbet/.

SBRForum. (2006). Millenium and BetOnSports theft – Facts from the player himself [Forum Thread]. Retrieved from http://forum.sbrforum.com/players-talk/12045-millenium-betonsports-theft-facts- player-himself.html.

SBRForum. (2008). Payer vs. BetWay: Canceled bet dispute [Forum Thread]. Retrieved from http://forum.sbrforum.com/players-talk/59715-payer-vs-betway-canceled-bet-dispute.html.

244

SEC. (2005). Day Trading: Your Dollars at Risk. Retrieved from http://www.sec.gov/investor/pubs/daytips.htm.

Sicart, M. (2008). Defining Game Mechanics. Game Studies: The International Journal of Computer Game Research, 8(2). Retrieved from http://gamestudies.org/0802.

Shackleford, M. (2011). Easy Street Sports vs. Cory1111. Retrieved from http://wizardofodds.com/online-gambling/easy-street-sports/.

Shackleford, M. (2012). Blacklist. Retrieved 6 November, 2012 from http://wizardofodds.com/online-gambling/blacklist/.

Slater M, Antley A, Davison A, Swapp D, Guger C, et al. (2006). A Virtual Reprise of the Stanley Milgram Obedience Experiments. PLoS ONE 1(1): e39. doi:10.1371/journal.pone.0000039

Smith, J.F. & Abt, V. (1984). Gambling as Play: Annals of the American Academy of Political and Social Sciences, pp. 122-132

Stark, D. (2009). The sense of dissonance: Accounts of worth in economic life. Princeton, NK: Princeton University Press.

Strandburg, K. J. (2004). Privacy, rationality, and temptation: A theory of willpower norms. Rutgers Law Review, 57, 1235.

Steinkuehler, C.A. (2005). Cognition & Learning in Massively Multiplayer Online Games: A Critical Approach. Unpublished thesis.

Sniderman, S. (n.d.). Unwritten Rules. Retrieved November 16, 2007 from http://www.gamepuzzles.com/tlog/tlog4.htm

Sports Interactive. (2007). 2008. London:

Sports Interactive. (2008). Football Manager Live. London: Sega

Sports Interactive. (2008b). . London: Sega

Sundarrajan, S., Hazen, S., Dudley, D., Freed, R. & Nicks, E. (2000). Day-Trading: Socially Sanctioned Gambling or Small Business Entrepreneurship. In Hall, S. & Martin, D. (eds.). Proceedings of the American Society of Business and Behavioral Sciences Track Section of Deans & Accreditation, Interdisciplinary, and Legal Studies. February 17-21, 2000, Las Vegas, NV.

245

Sunden, J. (2009). Play as Transgression: An Ethnographic Approach to Queer Game Studies. Proceedings of the 2009 Digital Games Research Association Conference. Retrieved from http://www.digra.org/dl/export_endnote?chid=09287.40551.pdf

Sunstein, C. R. (1996), Social Norms and Social Roles, 98 Columbia Law Review.

Sutton-Smith (2001). The Ambiguity of Play. Cambridge, MA: Harvard University Press.

Suzor, N. (2011). Digital Constitutionalism. Brisbane: Queensland University of Technology Thesis,

Suzor, N. (2010). Order supported by law: The enforcement of norms in virtual communities. Retrieved from http://works.bepress.com/cgi/viewcontent.cgi?article=1005&context=suzor

Tassi, P. (2012). Zynga Wants to Get Into the Online Gambling Game . Forbes. Retrieved from http://www.forbes.com/sites/insertcoin/2012/01/23/zynga-wants-to-get-into-the-online-gambling- game/

Taylor, TL (2002). Living Digitally: Embodiment in Virtual Worlds . In R. Schroeder (Ed.) The Social Life of Avatars: Presence and Interaction in Shared Virtual Environments. London: Springer-Verlag, 2002.

Taylor, T.L. (2006). Play Between Worlds: Exploring Online Games Culture. Boston, MA: MIT Press.

Taylor, T.L. (2006b). Beyond Management: Considering Participatory Design and Governance in Player Culture. First Monday, Special Issue 7. Retrieved from http://www.firstmonday.org/ISSUES/special11_9/taylor/

Taylor, TL. (2006c). Does WOW Change Everything? Games and Culture, 1:4. http://www.itu.dk/~tltaylor/papers/Taylor-DoesWoWChange.pdf

Taylor, T. (2009). The Assemblage of Play. Games and Culture, 4(4), 331-339.

TheRX. (2005). MyBookie stiffing a player for $85,000? [Forum Thread]. Retrieved from http://therxforum.com/showthread.php?t=280453

TheRX. (2005b). MyBookie admits 100% fault in recent player dispute [Forum Thread]. Retrieved from http://therxforum.com/showthread.php?t=281368.

TheRX. (2005c). BCN Sportsbook DISPUTE [Forum Thread]. Retrieved from http://www.therxforum.com/showthread.php?t=292148.

TheRX. (2005d). TOW dispute arbitration panel ruling - player vs. Sportsbook.com [Forum Thread]. Retrieved from http://www.therxforum.com/showthread.php?t=294545.

246

TheRX. (2005e). TOW Dispute Arbitration Panel Ruling - Player vs. Bodog Poker [Forum Thread]. Retrieved from http://www.therxforum.com/showthread.php?t=298656.

TheRX. (2005f). Dispute Arbitration Panel ruling - F1 Player vs. Olympic Sports [Forum Thread]. Retrieved from http://www.therxforum.com/showthread.php?t=307592

TheRX. (2005g). Sweat the payout not the panel [Forum Thread]. Retrieved from http://www.therxforum.com/showthread.php?t=308447.

TheRX. (2005h). TOW Dispute Arbitration Panel 3rd case - Player vs. Olympic Sports [Forum Thread]. Retrieved from http://www.therxforum.com/showthread.php?t=299740.

TheRX. (2006). Regarding the Artie dispute with BetMill.. [Forum Thread]. Retrieved from http://therxforum.com/showthread.php?t=383223.

TheRX. (2006b). WIL! Did you see the story on SBR about Betmill? [Forum Thread]. Retrieved from http://therxforum.com/showthread.php?t=382470.

Tirole, J., & Lerner, J. (2002). Some simple economics of open source. Journal of Industrial Economics, 50(2), 197-234.

Touborg, K. (2011). iGame Chat: EVE Online at PAX. Retrieved 6 November 2012 from http://www.igameradio.com/2011/09/20/igame-chat-eve-online-at-pax/

TOW. (2005). Untitled. Retrieved from http://therxforum.com/showthread.php?t=280453.

Turkle, S. (1997). Life on the Screen: Identity in the Age of the Internet. New York, NY: Simon & Schuster.

Turner, N.E. & Fritz, B. (2001). The Effect of Skilled Gamblers on the Success of Less Skilled Gamblers. Journal of Gambling Issues, Vol 5.

Turner, N. E., MacDonald, J. Bartoshuk, M., Zangeneh, M. (2008). Adolescent Gambling Behavior, Attitudes, and Gambling Problems. Int J Ment Health Addiction, 6:223-237.

U.S. Senate Permanent Subcommittee on Investigations. (2000). Day Trading: Case Studies and Conclusions. Retrieved from http://www.gpo.gov/fdsys/pkg/CRPT-106srpt364/html/CRPT- 106srpt364.htm.

Walters, L.G. Esq. (n.d.). Breaking down the UIGEA: Did Congress kill internet gambling? Retrieved from http://www.firstamendment.com/breaking_down_the_UIGEA.html.

247

Wagner, R. E. (2005). Self-Governance, polycentrism, and federalism: Recurring themes in Vincent Ostrom's scholarly oeuvre. Journal of Economic Behavior & Organization, 57(2), 173-188.

Warner, D. E. & Raiter, M. (2005). Social Context in Massively-Multiplayer Online Games (MMOGs): Ethical Questions in Shared Space. International Review of Information Ethics, 4(12).

Westbrook, T. J. (2006). Owned: Finding a place for virtual world property rights. Michigan State Law Review, 3, 779-812.

Wilson, M. (2003). Chips, bits, and the law: an economic geography of Internet gambling. Environment and Planning A, 35(7), 1245-1260

Williams, D, Duchenaut, N., Xiong, L., Zhang, Y., Yee, N. & Nickell, E. From tree house to barracks: The social life of guilds in World of Warcraft. Games & Culture, 1(4), pp. 338-361.

Wilson, M. (2003). Chips, bits, and the law: an economic geography of Internet gambling. Environment and Planning A, 35(7), 1245-1260.doi: 10.1068/a35106.

Woodford, D. (2008). Abandoning The Magic Circle. Breaking The Magic Circle Seminar, Tampere Finland, April 2008.Retreived from http://www.dpwoodford.net/Papers/MCSeminar.pdf, 6 November 2012.

Woodford, D. (2008b). Governing Virtual Worlds. Brunel 2nd Annual Postgraduate Games Conference, London, England. September, 2008.

Woodford, D. (2009). Governing Virtual Worlds. IUP Journal of Cyber Law, Vol. VIII, Nos. 3 & 4, pp. 24-33, August & November 2009

Woodford, D. (2010). Exploring Agency. Thesis. IT University of Copenhagen: Copenhagen, Denmark. Retrieved from http://www.dpwoodford.net/Papers/ExploringAgency.pdf, 6 November 2012.

Woodford, D. (2011). Gambling & Gaming: Power Relations in Dispute Resolution. Perspectives on Power Conference, University of Queensland: Brisbane, Australia.

Woodford, D. (2012). Regulating Virtual Environments. Proceedings of the International Conference on the Foundations of Digital Games, pp. 270–272 (2012).

Woodford, D. (2012b). Hanging Out Is Hard To Do: Methodology in Non-Avatar Environments. Journal of Gaming and Virtual Worlds, 4(3), November 2012.

248

Yin, R.K. (1994), Case study research, Design and methods, second edition, Sage Publications: Thousand Oaks.

Yomiuri Shimbun. (2012). 'Kompu gacha' online games may be illegal. Retrieved from http://www.yomiuri.co.jp/dy/national/T120505002978.htm.

Zainzinger, V. (2012) ‘What happens when professional gambling meets social gaming’. Retrieved from http://thenextweb.com/insider/2012/03/25/what-happens-when-professional-gambling- meets-social-gaming/

249