Money on the Left speaks with Raúl Carrillo, assistant professor of Law at Boston College, about gaming money. 

The $250 billion video game industry (the largest entertainment industry in the world) has rapidly developed an unregulated banking system. As online gaming becomes increasingly social and immersive, players build economies within games. Gamers can purchase goods and services within these environments using debit and credit cards. Companies also issue gift cards and co-branded credit cards. They store balances on digital platforms outside of the regulated banking system. Most critically, gaming companies offer players the chance to earn points inside games and convert them to other financial instruments, including bank deposits. However, these “gaming money” systems also feature exchange rate manipulation, money laundering, and financial risk for unwitting gamers and other stakeholders. 

In this episode, we explore how companies like Microsoft, Sony, and Roblox are not only harming gamers but issuing “shadow money,” evading banking regulations meant to prevent structural problems. Much like 19th-century canal, railroad, and mining companies, as well as 21st - century financial technology and cryptocurrency companies, gaming giants are engaging in private monetary governance. Although agencies hesitate to regulate “virtual” worlds of entertainment, media, and the arts, banking law does not ask if money is “real” but whether its creation infringes on the privileges of banks and the U.S. government. Carrillo proposes regulators supervise large corporations that support the conversion of gaming money to bank deposits at scale. Gaming money suggests banking law is incomplete without concern for corporate monies—even those conjured across imaginary boundaries between worlds. Moreover, the long-run stakes are high. Gaming introduces most U.S. children to money. Regulation must confront a future that is already here.

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