Let them raise a virtual army (Score 1)

There's a question of jurisdiction. The host government has unquestioned jurisdiction over physical machines hosting the games, but the virtual worlds are different. They don't necessarily exist within the coordinates of the host government's borders.

To subvert virtual lands into colonies, governments will have to raise a virtual armies to assert rule.
The inhabitants will most likely resist.

Can anyone see reservations, re-education camps, trails of tears ...