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"Material" means (i) any picture, photograph, drawing, sculpture, film, video game, computer game, video or similar visual depiction, including any such representation or image which is stored electronically, or (ii) any book, magazine, printed matter however reproduced, or recorded audio of any sort
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The part makes it illegal is the possession part - The US Supreme court has repeatedly ruled that possession is not illegal when it comes to obscene material. A person has the right to look at obscene material in the privacy of their home. This comes from the 1969 case of Stanley v Georgia. In that case the US Supreme court stated, "the mere private possession of the obscene matter cannot be constitutionally be made a crime". and "If the first amendment means anything...it means that a State has no business telling a man, sitting in his own house, what books he may read, what films he may watch. Our whole constitutional heritage rebels at the thought of giving government the power to control men's minds."
So, ANY state law that make the possession of obscene material in the privacy of one's home illegal, that that law is unconstitutional. This would also apply to virtual child porn or even AI images for the purpose of possession within one's home