Game talkFBI and Gambling in SL

 Posted by (Visited 6234 times)  Game talk
Apr 032007
 

CNet has an article about something that some of us in the industry have been talking about for a long time: whether or not people running casinos in Second Life are causing Linden to be liable for running an Internet gambling site. In the wake of recent legislation, pretty much the entire domestic Internet gambling industry moved offshore. Edit: a longer version of the original article, by Adam Pasick, can be found here.


The trick to staying legal, you see, is not running afoul of the aspect of the rule that says “something of value” cannot be gambled. Given the Lindex and easy and officially approved currency exchanges, this is a tricky line to walk. According to the article, Linden has several times consulted with the government on the issue.

This is just one of the big risks to having official currency cashouts from your virtual world, alongside questions about pornography of various sorts, money laundering, and so on. It’s good to see that a kneejerk reaction hasn’t happened.

  9 Responses to “FBI and Gambling in SL”

  1. If Gambling In Virtual Worlds Is Illegal, Does The Avatar Get Arrested?Raph / Raph’s Website: FBI and Gambling in SL

  2. If Poker Stars declared itself a “virtual world” tomorrow, starting holding tournament in StarsBucks, and opened up a market for trading StarsBucks to USD and EUR, would the Justice Department have any doubt in their mind that it was illegal internet gambling?

    I fail to see where all the doubt expressed in this article is coming from. Neteller executives were arrested for helping money get from U.S. bettors to offshore sportsbooks. Linden Labs seems to have put themselves in a very similar situation. (Heck, the gambling activity is occuring on Linden’s servers!)

    If there’s a loophole here, it’s a huge one. I don’t think LL has a leg to stand on; I have no doubt they will be required to find a way to shut this down, or face liability under UIGIA and existing statues.

    Now, that might not be a desirable outcome (I certainly don’t think so) but I fail to see how the DoJ could come to any other conclusion.

  3. When online gambling in the U.S. got smacked recently, I suspected SL gambling spiked. It’d be nice to know if that’s true, and what some of the relevant numbers are (e.g. an in-world biz tracked a 20% increase in revenue during that period).

    And just as a reminder, while the Shirky crowd was bellowing about the population numbers, other people had moved on to wondering about gambling’s impact on the monetary figures LL provides. I’ve not bothered lately so perhaps someone can update us on that issue; assuming there *is* an update.

  4. Who didn’t see this coming? Virtual Reality as the gin-joints and speakeasies of the future.

  5. I see this as part of a larger issue. We make online spaces where people come and interact with other people. People will be people, which means they WILL interact in every way they can, including every “bad” way they can. And we can be liable.

    I’d love to participate in much more discussion and work on this topic, and how we can construct online spaces that block bad behavior, or at least show good-faith efforts towards that goal, without stifling the good behavior.

  6. Who decides what behaviour is “bad”, and why exactly do you want to block “bad” behaviour? Hint: behaviour that drives away your paying customers should be considered “bad”, and blocking it to preserve the welcoming environment of your virtual world makes sense. Treating the morality-of-the-week dictated by whoever is currently in government as “bad” and blocking it to try and prevent people from enjoying their vices, is doomed to failure.

    Preventing gambling in online spaces will be as much of a success as Prohibition and the War On Some Drugs. The U.S. efforts to prevent online gambling are entirely hypocritical anyways, those protectionist laws were bought and paid for by brick-and-mortar casinos who don’t want to compete against foreign companies over the Internet.

  7. This is just one of the big risks to having official currency cashouts from your virtual world…

    …and more fuel for my usual rant about why officially acknowledging any value in your game’s currency is Bad, and should generally be avoided, unless you have a crack battalion of exceptional lawyers on speed dial.

  8. [...] to bounce around the Internet. The underlying problem should certainly not be a surprise, as Raph Koster noted (and discussed here and elsewhere in previous articles). One could state that the FBI’s [...]

  9. [...] to bounce around the Internet. The underlying problem should certainly not be a surprise, as Raph Koster noted (and discussed here and elsewhere in previous articles). One could state that the FBI’s [...]

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