FBI Visits Second Life Virtual Casinos

♠ Posted by Emmanuel in ,, at 4/05/2007 02:02:00 AM
In a previous post, I discussed the United States' efforts to combat interstate gambling in relation to offshore Internet gaming operators and their operations Stateside. Now, you may be aware of the popular online virtual world Second Life. It duplicates practically all aspects of life online, especially the world of commerce from buying real-estate, going to shopping centers, and betting in virtual casinos. It is the latter that the creators of Second Life, Linden Labs, became concerned about as it thought potential violations of Internet gaming laws might become an issue for the company in the future. So, Linden Labs asked the FBI to take a virtual (virtue-al? Sorry for the pun :-) look at gambling in Second Life though it has yet to offer an opinion on the legality of gambling there. Apparently, virtual gambling in Second Life can be addictive as this fellow who blew $1,000 non-virtual dollars attests to (the exchange rate is about 270 Linden dollars to one US dollar). People and firms are starting to take their virtual presences seriously; someone has made a cool million investing in Virtual Life cyber-property, while Fortune 500 companies are keen on setting up shop. As these virtual worlds thrive, it will be interesting to see if their jurisdiction comes to mirror offline laws more closely:
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, Florida.

Britton said Linden Lab could potentially face criminal charges under the 1970 Illegal Gambling Business Act or the Unlawful Internet Gambling Enforcement Act [UIGEA]. The latter law, passed last year, takes aim at credit card companies and other electronic funds transfers that enable Internet gambling.

"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 who has studied the legal issues of virtual worlds.

"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."