IRS weighs in on virtual gaming: “it’s gambling”

Something that one of our other VTOR group members and I were discussing last week is in the news this week: how virtual money is classifed: is gambling inside Massive Multiplayer Online worlds the same as gambling online?

via ABC:

The IRS says that online computer games like Entropia Universe which allow players to earn and spend real money in the game’s virtual world, are considered gambling.

While this decision specifically mentions Project Entropia, the IRS leaves it open with the emphasized text above. This hasn’t been tested in the courts yet and I suspect it will be at some point.