In addition to the following, a laser travels miles. So you risk bringing law enforcement down on your group (using laser pointers in this manner is illegal in most states) and post a special risk to anyone driving or flying. Thanks to Brian Smith for finding more links and thanks to TagFerret for the quote about IR lasers and safety at the bottom.
Quotes are followed by a link to their source.
"... the mid-day Sun at the Earth's equator on a clear day has a power density of about 1 kW/m2 or about 1 mW/mm2. It would not take very long staring into the Sun to burn out your eyeballs!"
"A 1 mW laser has the potential to produce an intensity on the retina 167 times that of direct sunlight!"
"Be aware that eye damage that is localized to a small area of the eye is not very noticeable. A laser wouldn't necessarily have to make you totally blind; it could just wipe out a teeny patch here and a teeny patch there. This kind of damage would be very insidious; each time you'd say "Wow! That was bright! lucky I didn't get blinded" - while slowly and cumulatively losing your sight.."
"Misinterpretation of intent - you get blown away by someone with a BIG gun who thinks you are targeting them with a laser sight. Or, you are arrested and thrown in the slammer for aiming a laser pointer at a cop (this has happened )."
http://www.huntingcorner.com/lasers/Lasersafety.htm
"Visible light and Infrared-A (400 - 1400 nm)
The cornea, lens and vitreous fluid are transparent to electromagnetic radiation of these wavelengths (Figure 11). Damage to the retinal tissue occurs by absorption of light and its conversion to heat by the melanin granules in the pigmented epithelium or by photochemical action to the photoreceptor. The focusing effects of the cornea and lens will increase the irradiance on the retina by up to 100,000 times. For visible light 400 to 700 nm the aversion reflex which takes 0.25 seconds may reduce exposure causing the subject to turn away from a bright light source. However this will not occur if the intensity of the laser is great enough to produce damage in less than 0.25 sec. or when light of 700 - 1400 nm (near infrared) is used as the human eye is insensitive to these wavelengths."
http://www.safetyoffice.uwaterloo.ca/hspm/lasermanual/documents/section6.html
"Sensitivity to Specific Wave Lengths
* Visible and IR-A: Visible and IR-A wavelengths of light are transmitted through the cornea and lens of the eye, and are absorbed mostly by the retina. The visible and IR-A portions of the spectrum (400-1400 nm) are often referred to as the "Retinal Hazard Region" because these wavelengths of light can damage the retina. The amount of hazard to the retina from viewing of a laser beam in the Retinal Hazard Region increases with increased pupil size and increased duration of the laser beam."
http://www.weizmann.ac.il/safety/lasers2.html
"Laser Pointers Pose Risk For Children
Following two reports of eye injuries from children's misuse of
hand-held laser pointers, FDA warned parents and school officials
about the risk.
Laser pointers are generally safe when used as intended by teachers and lecturers to highlight areas on a chart or screen. However, price reductions have led to wider marketing, and FDA is concerned about promotion and use of the products as children's toys.
Light energy from a laser pointer aimed into the eye can be more damaging than staring directly into the sun. Federal law requires a warning on the product label about this potential hazard from lasers. Momentary exposure, as from an inadvertent sweep of the light across a person's eyes, causes only temporary flash blindness. But even this can be dangerous to someone who is driving or performing some other activity for which vision is critical."
http://www.fda.gov/fdac/departs/1998/298_upd.html
"(6) Class IIa laser product means any laser product that
permits human access during operation to levels of visible laser
radiation in excess of the accessible emission limits contained
in table I, but does not permit human access during operation
to levels of laser radiation in excess of the accessible emission
limits contained in table II-A of paragraph (d) of this section.
\2--
\2\ Class IIa levels of laser radiation are not considered
to be hazardous if viewed for any period of time less than or
equal to 1x10\3\ seconds but are considered to be a chronic viewing
hazard for any period of time greater than 1x10\3\ seconds.
--
(7) Class II laser product means any laser product that permits
human access during operation to levels of visible laser radiation
in excess of the accessible emission limits contained in table
II-A, but does not permit human access during operation to levels
of laser radiation in excess of the accessible emission limits
contained in table II of paragraph (d) of this section.
\3--
\3\ Class II levels of laser radiation are considered to be a chronic viewing hazard."
http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfCFR/CFRSearch.cfm?FR=1040.10
10^3 seconds is just shy of 17 minutes. Add two Class II or IIa pointers together (a visible and an IR) and it's into Class III territory.
More:
"Class 2 lasers are low power visible (400- to 700-nm wavelength) lasers and laser systems which cannot emit radiation in excess of the AEL based on a 0.25 second exposure."
http://www.navylasersafety.com/faq/technical.htm
Note the warnings about them being a chronic exposure hazard.
And in the end, something going wrong with a laser pointer can potentially cause it to put out hazardous levels.
... further info .... Bad turns to worse, I noticed that all the current laser pointers are class IIIa!
"(8) Class IIIa laser product means any laser product
that permits human access during operation to levels of visible
laser radiation in excess of the accessible emission limits contained
in table II, but does not permit human access during operation
to levels of laser radiation in excess of the accessible emission
limits contained in table III-A of paragraph (d) of this section.
\4--
\4\ Class IIIa levels of laser radiation are considered to be, depending upon the irradiance, either an acute intrabeam viewing hazard or chronic viewing hazard, and an acute viewing hazard if viewed directly with optical instruments."
So the new Class IIIa laser pointers can potentially cause spot blindness from one exposure!
From TagFerret, software designer of Lazer Tag: Team Ops:
"More importantly, the blink reflex ONLY happens with visible light. Infra-Red is neither seen nor felt by the human retina until it is too late, just like Ultra-Violet.
While I would agree with the premise that a class I IR laser is *probably* eye-safe under virtually all conditions for lasertag, I would say it still comes down to one fact: nobody has done the work to prove it. The toy companies have all done the work to prove their IR-LED systems are eye safe even for children when used as per the instructions. They are required to do so in order to sell the systems. They even have to pass the EU restrictions, which are much tougher than the US limits, because these toys are sold in europe as well.
Oh yeah -- and laser diodes have an output that is dependant on voltage and current supplies, just like IR-LED's. The driving electronics of a tag system are engineered to drive an IR-LED, they are NOT engineered to drive laser diodes, and any laser diode you find is almost certaily not going to have been designed for the voltage and current values found in the tag gear. So, unless someone has at least a BSEE and a background in laser physics, they are not qualified to make the adapter circuit and guarantee it remains eye-safe under all conditions. Even if they had the BSEE and laser physics background, they won't have the safety testing data to back them up and will thus be exposed to legal repurcussions for any injury (real or imagined) to the eyes of other players.
Bottom line: DON'T DO IT."