The laser beam is directed onto the image of the penny from demonstration L3-19: PENNY AND PARABOLIC MIRRORS. It appears to be reflecting from the image, although the multiple reflections seem to disperse the laser beam so that it does not emerge intact.
A little fog from the fog machine shows the incoming laser beam. Notice that because laser light is more dense than air some of it remains in the illusion chamber after the laser is turned off (photograph at right).