I am very ignorant to this subject, but I am quite interested. Did they exercise some sort of loophole or is it by choice that games do not have their video game economies tied both ways to the real word economy(a game where you can both buy gold/sell gold). Was it ok because the company just took a vig at the auction house, or could it have effectively been done the same way with them acting as the main agents?

Any information on this would be greatly appreciated. I am very serious in finding more information on the legality of this sort of gameplay, PM me if you know what you are talking about and think you can help me.

I'll also clarify any confusion I have caused with my questions, feedback plox.

I'm confused what you find illegal about it? Betting skins on CSGO I could see as a bit of a gray area, but I'm not sure how a game facilitating the buying and selling of in-game items would be considered illegal.

Which blizzard auction house? The d3 one they have long since shut down? The gold for game time one they introduced in WoW?

Other games are much bigger gambling rackets. Look at swtor. People spend hundreds a month gambling on packs hoping for expensive or rare in-game items.

It's only gambling if the game provides a mechanism for you to cash out. Otherwise it's a purchase.

(Japan is a special case due to the Gatcha Laws).

D3 let you cash out

Because they were willing to bank on D3 not being considered a gambling game. They were taking a risk though that nobody at the DOJ would get a bee in their bonnet - you could certainly argue that drops are gambling.

There's two cases:

Is it a gambling game?
- No: Then you can do whatever
- Yes: If players can cash out, you're going to have a bad time

That's why there so many freemium casino games and nobody gives a damn. At least until there are freemium laws.

It comes down to that pesky definition of "gambling" (or whatever other local regulations or licenses are in place like in Japan).

Well, in Diablo it was more like speculation gambling. Buy up loads of gear and gems with cash, mark it up ridiculously higher, hope it sells, cash out, repeat

Yeah, but all those items originated as drops. Which lawyers could have had a field day with if they were so inclined. But it never hit the mainstream and so few games have any way to cash out that doesn't involve an end around TOS that it's a moot point.

I don't think buying something for cheap and selling it more can be considered gambling. By that definition, every business ever created is gambling. Unless I'm not understanding what you're saying.

It would need to be regulated in a similar fashion that stocks/bonds/commodities are regulated. There's no governing body that wants to do that **** for video games.

It's ridiculous what they consider gambling legally. When I was in college I picked up some spending money by winning some chess tournaments.

Pay to enter chess tourney --> win and get $$ --> legal
Pay to enter poker tourney --> win and get $$ --> illegal
Pay to enter marathon --> win and get $$ --> legal

I played D3 very early on, but if I'm remembering correctly the main things that resembled gambling were crafting and buying unidentified items.

I think it'd be pretty ridiculous to regulate such a small potatoes thing in such a way.