Virtual Reality has emerged as the next major technology to impact industry and change business models. As it expands into various markets and becomes more prevalent in society, proper regulations should be put in place to protect consumers and address widespread legal issues. This paper discusses the history and growth of Virtual Reality technology, the major legal concerns that loom over its expansion, and proposed recommendations on regulations and safeguards. The paper argues that in order to balance innovation and consumer protection, privacy should be immediately regulated, but the other legal issues of intellectual property, physical and torts risks, and first amendment rights should only be regulated as and when the issues emerge.