When it comes to video games, Laura Mills (search) screens what her 10-year-old son Daniel plays.

That way, "I don't have to worry about offensive content in my living room," Mills said.

Offensive content has prompted a new law in Illinois, the first state to pass a ban on the rental and sale of violent and sexually explicit video games to minors.

Last year the video game industry raked in $7 billion in U.S. sales alone, with the controversial yet highest-selling title, "Grand Theft Auto," taking in $2 billion in sales.

"If you're 18 or older and you're a grownup and an adult, that's your business,” Illinois Gov. Rod Blagojevich (search) said. “But I don't believe that my 8-year-old daughter has a constitutional right to cut someone's head off in a game that she plays."

Three federal courts, however, have disagreed, ruling that similar attempts to regulate access to games are unconstitutionally restrictive. Again, the video game industry is threatening legal action.

"Video games are protected speech, every bit the same as a movie is protected or a piece of music or a painting or a photograph," Doug Lowenstein of the Entertainment Software Association said.

Video game sellers call the law punitive, because they're now responsible for determining which games are appropriate for minors and they're subject to fines for selling graphic games to kids.

"Retailers should not be, cannot be the surrogate parents for kids who choose to ignore the ratings systems which are already on video games ... are already known by parents," David Vite (search) of the Illinois Retail Merchants Association said.

And known by Laura Mills. But she says many parents are ignorant about these games.

"Parents oftentimes don't realize the games have ratings. And they don't know what the ratings mean," she said.

Supporters say this law gives parents another tool to ensure their kids play age-appropriate games.

But the industry agues that logic is as make-believe as the games themselves, since the age of the average buyer is 37, according to audience surveys.

Click in the video box above to watch a report by FOX News’ Jeff Goldblatt.