I've found this site
http://www.lasershowsafety.org/faq.htm
From which I have lifted these quotes..
18. What does the term audience scanning mean?
It is when a laser effect is directed into the audience, normally to create a tunnel or sheets of light that look like 3D objects that the crowd can touch.
19. Is it legal to audience scanning?
There is no law that specifically states that it is illegal to audience scan. But if you do scan laser effects into the audience, you need to be certain that the MPE is not being exceeded. If the MPE is exceeded there is a risk of members of the public sustaining eye injuries caused by the laser - which could lead to all sorts of consequences.
20. Are some effects more suited to audience scanning than others?
Yes, effects that include stationary or slow moving beams should be avoided at all times. If you can see the beam moving through the path it is taking, it is almost certainly too dangerous to project into the audience. You should also avoid projecting effects that contain hot spots or dwell points in them. That is where extra points are put into certain parts of the effect to help define a sharp corner etc. The energy present on these types of effect is not evenly dispersed and the hot spots may be hazardous. Smooth flowing effects such as a circular tunnel are safer, because they maintain a more constant speed. Additionally of you keep the whole effect panning over the audience, it helps to reduce the amount of time the laser beam is in any one persons eyes.
I'm sure I've seen the same or similar info on the ILDA site but can't locate it at the moment.
In short, audience scanning is NOT illegal in this country.