VR Rooms were devices used to create immersive virtual reality scenarios. Spellbinder used a highly addictive version of the technology in his illegal operations.
Spellbinder used the rooms to make vulnerable youths dependent on him. Someone inside the translucent bubble would experience their heart's desire, but Spellbinder made sure to cut off the feed after a time. He would only allow them further visions if they worked for him.
If subjects stayed in too long or too often, the serotonin levels in their brain would rise to lethal, coma-inducing, levels.
Later, Spellbinder tried to frame Batman for Mad Stan's apparent death, until Batman exposed him cleared his name. Mad Stan was later found inside a VR Room, in which he was experiencing a simulation of his destroying Gotham City Hall, resulting in him laughing maniacally, which caused GPD officers to wonder what he was so happy about.