In the News

Published August 1, 2006

States Step Up Video Game Regulation

State and local governments are taking aim at the video gaming industry, proposing laws that would attach regulations to the distribution and sale of games with violent or sexual content.

The initiatives are in response to what lawmakers see as video game retailers’ lax enforcement of game ratings. Much like movies, video games carry ratings, created by the Entertainment Software Rating Board, an industry organization, that range from Early Childhood (EC) to Mature (M) to Adults Only (AO).

According to The Wall Street Journal, Louisiana, Maryland, Minnesota, and Virginia have passed laws aimed at restricting video game sales, and at least a dozen other states are debating similar legislation. Most measures would impose fines on retailers who sell or rent games rated M or AO to customers under 17 and 18, respectively. A Michigan law along these lines was ruled unconstitutional last November, however.

The video gaming industry, meanwhile, points to initiatives such as Commitment to Parents, designed to educate parents about video game ratings, as well as existing policies by major retailers such as Wal-Mart, Target, and Best Buy that restrict sales to children of mature and adult video games.

Atlantic City Shutdown Boosts Online Gaming

The New Jersey budget dispute that shut down all 12 Atlantic City casinos for the first nine days in July proved a boon to online gambling. “We’ve experienced a significant increase in the amount of casino- and poker-related revenue on our site from customers in and around the Atlantic City area,” said Alex Czajkowski, marketing director of, in a statement. describes itself as the world’s largest online gambling site. It is a unit of Sportingbet PLC, a publicly traded company based in London.

The report comes as Congress debates further legislation against gambling sites, including measures that would make it more difficult for Americans to transfer funds to gaming sites, all based offshore. U.S. online gamblers placed about $145 billion in bets in 2005. (See “Casino Industry Seeks Online Gambling Study,” IT&T News, July 2006.)

New Jersey lost an average of $1.3 million a day in tax revenues during the shutdown.

Lafayette Muni Project Bogs Down in Court

Lafayette, Louisiana is no closer to launching its $125 million municipal fiber-to-the-home project than it was one year ago, when voters passed a controversial initiative permitting city-owned Lafayette Utilities System (LUS) to issue bonds to fund the project, which would compete with services currently offered by Cox Communications and BellSouth.

Legal delays have cost the city $6 million, said LUS Director Terry Huval in an article published by the Baton Rouge Advocate July 1. That includes $2 million more in interest LUS will likely have to pay on debt because of recent interest rate increases.

In May, a U.S. District Court ruled the LUS bond issue was in compliance with Louisiana law. An earlier plan, which secured the bond with revenues from LUS electricity operation, was ruled illegal. In June, two Lafayette residents appealed the district court decision to the Third Circuit U.S. Court of Appeals. A decision was not expected until later this month.

Court: Retailers and Renters Can’t Edit Video

Video retailers and rental companies that edit scenes from films without permission violate copyright laws, a U.S. district judge in Denver ruled in July. The decision is a victory for Hollywood studios and filmmakers against a number of specialized sales and rental outlets that were offering PG- and R-rated films with adult language, violence, nudity, and sexual content edited out.

About 90 such stores exist nationwide, according to the Associated Press, with half in Utah. Some, such as and, offer rentals and sales online, similar to Netflix and Blockbuster.

Although he addressed the issue of the filmmakers’ rights to control the content of their work, the judge based much of his ruling on the fact that these companies copy the films onto their own tapes and DVDs, an outright violation of copyright law.

The controversy began in 1998, when the owners of Sunrise Family Video began deleting from the highly popular Titanic scenes that showed a naked Kate Winslet. “Scrubbing,” as it came to be known, caused an uproar in Hollywood, resulting in several lawsuits and countersuits.

Other analysts have suggested that with the copyright issue settled, Hollywood will begin offering its own scrubbed versions.

Steven Titch ([email protected]) is senior fellow for IT and telecom technology at The Heartland Institute and managing editor of IT&T News.