We present results from a Monte Carlo simulation study of the phase diagram and the order of the modulated liquid to crystal transition in laser field modulated colloids. We find that for low values of beta V-e, the strength of the modulation potential, the transition is first order, but changes to a continuous transition for high values of beta V-e, in agreement with the conclusions from the density functional theory of laser induced freezing. However, we find in the simulation a novel reentrant laser induced melting transition from the crystal to the modulated liquid phase with increasing beta V-e, unlike the (mean held) density functional phase diagram.