Law firm Campbell Hooper has warned that unless they take action now, some MMO operators risk their games being deemed illegal when a new law comes into force later this year.
"In September the remaining provisions of the Gambling Act 2005 will finally come into force. Its main purpose is to update the law on gambling, which in some cases is over 50 years old and is therefore inadequate for the modern world," Campbell Hooper's Alex Chapman told GamesIndustry.biz.
The Act is designed to regulate online gambling, which companies will be able to operate from within the UK for the first time. However, massively multiplayer online games which offer prizes will also be subject to the new laws.
"This is because the new law creates a new single definition for 'Gambling', which includes playing a game of chance for a prize, and makes it a criminal offence to provide facilities for gambling without having and complying with an operators licence," explained Chapman.
The Act defines a "game of chance" as any game which involves elements of both chance and skill, or where superlative skill can eliminate chance. The definition of "prize" includes cash prizes, products and virtual prizes which can be exchanged for money.
"This arguably puts the marketplaces in MMOGs such as Station Exchange in Everquest in the firing line, and makes the products sold through them "prizes" - since they have a monetary worth," said Chapman.
However, he continued, MMO operators can avoid any potential penalties by obtaining an operators' licence from the Gambling Commission.
"This is not a simple task, but it is also not overtly complex. The key is to satisfy the Commission that you have in place an operation that satisfies the requirements and key objectives of the new law."
These include commitments to ensuring fair and open gambling, the protection of children and other vulnerable persons and the prevention of links between gambling and crime.
"This is something all current operators of these games, and those looking to enter this market, should seriously consider now," Chapman concluded - adding that his firm is already working to obtain licences for clients, and is in talks with the Gambling Commission over the MMO issue.