FBI investigators have visited Second Life鈥檚 internet casinos at the invitation of the virtual world鈥檚 creator Linden Lab, but the US government has not yet decided on the legality of virtual gambling.
鈥淲e have invited the FBI several times to take a look around in Second Life and raise any concerns they would like, and we know of at least one instance that federal agents did look around in a virtual casino,鈥 said Ginsu Yoon, Linden Lab鈥檚 vice president for business affairs.
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 real US dollars. Yoon said the company was seeking guidance on virtual gambling activity in Second Life but had not yet received clear rules from US authorities.
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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 there, the three largest poker casinos are earning modest profits of $1500 each per month, according to casino owners and people familiar with the industry. The FBI and the US Attorney鈥檚 Office for Northern California declined to comment.
Set of unknowns
The surge in Second Life gambling coincides with a crackdown in the real world by the US government, which has arrested executives from offshore gambling websites.
Most lawyers agree that placing bets with Linden dollars probably violates US anti-gambling statutes, which cover circumstances in which 鈥渟omething of value鈥 is wagered. But the degree of Linden Lab鈥檚 responsibility, and the likelihood of any crackdown, is uncertain.
鈥淭hat鈥檚 the risk; we have a set of unknowns and we don鈥檛 know how they鈥檙e going to play out,鈥 said Brent Britton, an attorney specialising in emergent technology at the law firm Squire, Sanders & Dempsey in Tampa, Florida.
Britton said Linden Lab could potentially face criminal charges under the 1970 Illegal Gambling Business Act or the Unlawful Internet Gambling Enforcement Act. The latter law, passed last year, takes aim at credit card companies and other electronic funds transfers that facilitate internet gambling.
Payment processes
鈥淲hat 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,鈥 said Sean Kane, a lawyer at New York鈥檚 Drakeford & Kane.
鈥淚f you鈥檙e buying money on the Lindex (Second Life鈥檚 virtual currency exchange) and utilising it for gambling purposes, Linden could have a much higher level of responsibility,鈥 he added. 鈥淚t鈥檚 difficult to say if they would be found in violation, but I can see a much stronger case being made.鈥
Linden Lab鈥檚 rules prohibit illegal activity. 鈥淚t鈥檚 not always clear to us whether a 3D simulation of a casino is the same thing as a casino, legally speaking, and it鈥檚 not clear to the law enforcement authorities we have asked,鈥 Yoon said.
Even if the law were clear, he claimed the company would have no way to monitor or prevent gambling in Second Life.
