Here's the part of the bill that has me worried
Sec 2. (a) Conduct Prohibited- It shall be unlawful for any person to ship or otherwise distribute in interstate commerce, or to sell or rent, a video game that does not contain a rating label, in a clear and conspicuous location on the outside packaging of the video game, containing an age-based content rating determined by the Entertainment Software Ratings Board.
This was obviously intended for video games sold through standard "brick-and-motar" retail stores, but the bill doesn't state that. It doesn't define the term "video game" to only mean "boxed PC or Console games sold it stores"; it leaves that wide open. It appears that no thought was given to other distribution channels and especially for the selling of "boxless" downloadable games sold exclusively via the internet.
That paragraph above paints things with too broad a stroke in my mind. It would make most things that most indies are doing right now illegal. It would be illegal to even just "distribute" an unrated game over the internet. At least that's the way I'm reading it. No more demo downloads (unless it's rated), no more free flash games (unless they are rated), no more hobby freeware games (unless you rate it).
Furthermore, the bill states that the rating must come from the ESRB, and last time I checked, it cost thousands of dollars to get a rating from them. Obviously this will kill most of the freeware out there, as very few people are going to spend thousands of dollars just so they can give away their hobby project to others for free. Also, considering that most indie games out there don't make enough money to cover the cost of an ESRB rating, it will certainly mean that ther will be a lot fewer games out there. It would probably mean less innovation, as less people are going to want to take a risk on something they've had to invest thousands of dollars into.
Also, in the bill it mentions that it will be illegal to sell AO (Adult Only) rated games to anyone under 18 years old, and to sell M (Mature) rated games to anyone under 17 years old. That may be easier for a "brick-and-mortar" retail store to do, as they could check some sort of legal ID when you are buying it in person. However, there is not a good way to verify someone's age online that I know of. They are asking the impossible in terms of enforcement (at least with current technology) for internet game sales.
I am not against ratings. I think they are a good thing. I think it's the responsible thing for developers to share content info with their customers, so that people are aware of what kind of content they are getting. Especially if the game may have some adult oriented content in it. I would even be okay with making the requirement that such info "must" be disclosed to the customer. As a parent I certainly don't want to be surprised by a game that looked okay at first, but then later discovered something offensive in it. I wouldn't want to download the latest casual "Match-3" game for my kids, entitled "Crown Jewels", only to discover that the "crown jewels" being shown didn't come from a mine.
Again I am for ratings, but what I don't like is that this legislation requires the game to be rated by an organization that will make the cost of doing business so high for some, that it will force them out of business. There are some ratings systems in the works like TIGRS that would fit the bill to let people know what they are buying, and that would be reasonable for an indie game developer to do. The arcade industry established a self rating system by the AAMA (see here for more info) that worked well and didn't require the developers to drain their pockets. I think that requiring an ESRB rating would only serve to line the pockets of that organization, and put many other developers out of business. Either the ESRB would have to make the rating prices reasonable for Indies, or the legislation would have to allow for other ratings systems, like TIGRS, in order for me to be okay with this rating requirement.
Jim Matheson is my congressman, and he is the one sponsoring this bill. I am saddened that he's trying to push this poorly thought out bill (I didn't vote for him BTW). It seems this bill was drafted quickly, just so that he can have some sort of "I'm doing something to protect families" stance for the upcoming election. I will be writing him and letting him know of the unintended consequences of this bill. I encourage other people to do the same, and let him know what this bill will do to your business. I hope this either gets re-written with provisions that the independent game development community can live with, or it gets shot down in the house and senate. It don't think this bill is a good idea (it's only half-baked).