Virtual gambling

Author: Simon Dexter

The FBI has been called in to investigate possible illegal gambling taking place in the increasingly popular Second Life virtual world.

Second Life is a 3-D virtual world entirely built and owned by its residents. Since opening to the public in 2003, it has grown explosively and today is inhabited by over 5 million people from around the world.

With online gambling banned for US residents, many have been getting around the rule by playing for Linden dollars in the virtual world.

However, no one is clear as to whether it still constitutes an illegal action to bet with virtual money and the makers are keen for the FBI to take a look around as they have nothing to hide.

Hundreds of casinos offering slot machines and blackjack are easily located in Second Life. Although it is difficult to estimate the total size of the gambling economy in Second Life, the three largest poker casinos are earning only small profits each per month.

The US government has arrested executives from offshore gambling websites in recent months and it is no coincidence that the upsurge in virtual casinos on Second Life came around this time.

The legal profession are not too sure how the situation will play out but some believe the owners of the game – Linden – may be infringing some laws by accepting payment. Linden dollars can be bought for real dollars.

“What they did was go after the processors, and made it a crime to process payments that relate to online gambling sites. Linden could potentially be held as the same sort of processor,” said Sean Kane, a lawyer at New York’s Drakeford & Kane

“If you’re buying money on the Lindex (a virtual currency exchange) and utilizing it for gambling purposes, Linden could have a much higher level of responsibility,” he added. “If they would be found in violation, that’s difficult to say, but I can see a much stronger case being made.”

Even if the law were clear Linden would have no way to monitor or prevent gambling in Second Life.

“It’s not always clear to us whether a 3-D simulation of a casino is the same thing as a casino, legally speaking, and it’s not clear to the law enforcement authorities we have asked,” a spokesman said.

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