FBI Investigates Second Life for Online Gambling

Quoth Reuters:

FBI checks out gambling in 'Second Life'

FBI investigators have visited Second Life's Internet casinos at the invitation of the virtual world's creator Linden Lab, but the U.S. government has not decided on the legality of virtual gambling.

"We 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," said Ginsu Yoon, until recently Linden Lab's general counsel and currently 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 U.S. dollars. ...

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.

The surge in Second Life gambling coincides with a crackdown in the real world by the U.S. government, which has arrested executives from offshore gambling Web sites.

Most lawyers agree that placing bets with Linden dollars likely violates U.S. antigambling statutes, which cover circumstances in which "something of value" is wagered. But the degree of Linden Lab's responsibility, and the likelihood of a crackdown, is uncertain.

"That's the risk; we have a set of unknowns, and we don't know how they're going to play out," said Brent Britton, an attorney specializing in emergent technology at the law firm Squire Sanders & Dempsey in Tampa, Fla.

Britton said Linden Lab could 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 enable Internet gambling. ...

"It's not always clear to us whether a 3D 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," Yoon said.

About Ginsu Yoon's curious statement in the last graf quoted, Mark Gritter, who pointed us to this story, has this to say:

Where has he been? Does he think the government has been cracking down on sports betting sites because they're too dumb to label themselves "simulations" of sports betting? Does somebody at the Justice Department actually see a difference between a 3-D simulation of a poker room and, well, an online poker room?

I can only agree with Mark here.