"Ebay bans virtual booty auctions":

Auctions of virtual gold, armour and other digital booty amassed in online computer games like World of Warcraft have been banned by Ebay.

The internet auction house, based in California, US, announced on Tuesday that it had decided to prohibit the sale of virtual riches, weapons and other items, due to "legal complexities" regarding ownership.

...Ebay will, however, continue to allow auctions of items amassed in virtual worlds such as Second Life. In this world players can build items and buy and sell virtual property and land, but there are no conventional game objectives.

"Right now, Second Life is not considered a game so we are not applying the restriction to it," Durzy explains.

But the IRS is willing to tax these virtual world earnings.