April 11, 2007

When is a Casino... Not a Casino? Virtual Gambling in Second Life


While Online Casinos have been given the official boot here in the United States, an interesting question arises around another concept: casinos (and gambling) within other legal forms of online gaming. There are "games" that have such degrees of freedom for their users, that they allow nearly anything to happen. Anything like say... an online casino.

A massively multi player online game that has been around for some time now, called Second Life, is one such environment. The basic premise of this "game", is that there is no "game" at all. It is in effect, a virtual world where members can own properly, create goods and services, and all with the understanding that anything they create in the world belongs to them, and not the game's publisher or creator. Second Life is a bit different in that regard, as most online games make it clear via user agreements, that players have no rights, nor ownership of anything within game worlds. Second Life also adds some complication because they purposely peg their in-game currency (The Linden) to the US Dollar. This provides a legal, and surprisingly liquid market where REAL currency and VIRTUAL currency can change. (To us, this is starting to sound like Firepay and its brethren..eh?)

Read More after the Bump

Well, It seems that the creators of Second Life, Linden Labs, were wondering these same things, and politely asked the FBI to come on over, and inspect their virtual casinos, to be sure they were not going to be raided in the middle of the night.

CNN / Reuters has the story:

Second Life is a popular online virtual world with millions of registered users and its own economy and currency, known as the Linden dollar, which can be exchanged for U.S. dollars.

Yoon said the company was seeking guidance on virtual gaming activity in Second Life but had not yet received clear rules from U.S. authorities.

The FBI and the U.S. Attorney's Office for Northern California declined comment.

Hundreds of casinos offering poker, slot machines and blackjack can easily be found in Second Life. While it is difficult to estimate the total size of the gambling economy in Second Life, the three largest poker casinos are earning profits of a modest $1,500 each per month, according to casino owners and people familiar with the industry.

It seems that even after the inspection, there is no clear ruling from the government, and from Second Life creators themselves. So in the meantime, feel free to go make your free Second Life character, dump some REAL money into the Lindex, and get some play time in. But be warned, you have no protection that the games are legit, and even if they were, tomorrow, we could see Second Life suffer the same fate as the other online exchanges before it.

But its not real money... is it?

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Posted by Russell Miner at April 11, 2007 10:00 AM
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