Gambling Banned in Second Life Virtual World

In a sign of real-life authorities' increasing interest in the activities in virtual worlds, all forms of gambling in Second Life have been banned.

Linden Labs, the company that runs Second Life, said that as of this week, its policy on 'in-world money wagering' was changing, and that casino games such as black jack, poker, roulette and slot machines would no longer be permitted.

Earlier this year, the company invited the FBI to tour Second Life and ensure that activities within it were complying with U.S. law.

All forms of online gambling have been illegal in the U.S. since last October.

In an entry on its blog, Linden Labs wrote: "If we discover gambling activities that violate the policy, we will remove all related objects from the in-world environment, may suspend or terminate the accounts of residents without refund and may report any relevant details, including user information, to authorities and financial institutions."

The policy would apply irrespective of the gambling laws of the country or state in which the resident lived, the company said, and Linden Labs staff would now patrol Second Life to uncover any breaches.

Second Life's currency, which has a variable exchange with the U.S. dollar, can be spent on a range of virtual goods and services, and just over $1.5 million changes hands in the online world each day, according to Linden Labs.

So far no government has attempted to tax virtual transactions, but the U.K.-based Fraud Advisory Panel has warned that criminals could transfer large amounts of money in Second Life with little risk of detection.

Police in Germany have said that they are investigating an alleged instance of 'virtual child abuse' in the world, and the Vancouver Police Department said this week that it had begun recruiting officers for its technology crimes unit from within Second Life.

Anthony Smith, a Brighton resident who has spent $3,800 setting up a virtual casino since buying property in the world in February, told InformationWeek: "This will be the start of the end for Second Life – just as the U.S. government wants."

David Naylor, a lawyer with the firm Field Fisher Waterhouse, said that with the increasing amount of business being conducted in Second Life will come legal disputes, such as the one earlier this month in which a Florida-based businessman sued another Second Life resident for copyright infringement after the rival began selling a virtual bed similar to his own.

Several large companies, including Dell, Nike, Mercedes and Calvin Klein, have established a presence for their brands in Second Life with a view to attracting clients in the real world.

Linden Labs says there are now more than 8 million residents in Second Life, although only 1.7 million have logged in the past 60 days.