Virtual Gambling Could Bring Down Second Life

    April 18, 2007

In the virtual world of Second Life, one can engage in just about every imaginable sort of commerce. Industries spanning from standard retail to prostitution offer the average Second Lifer a veritable cornucopia of possibilities, but it’s the virtual casinos that exist in the online world that are drawing the attention and ire of government agencies in the United States.

 Virtual Gambling Could Bring Down Second Life
Virtual Gambling Could Bring Down Second Life
 Virtual Gambling Could Bring Down Second Life

Second Life has had its share of ups and downs.

Linden Lab’s virtual world has enjoyed a generous amount of publicity as companies have begun launching themselves within the game in an attempt to market products and services to an interactive online audience.

Second Life has also found itself put through the public relations ringer as the virtual prostitution industry continues to separate itself as a commerce leader and top moneymaker in the world’s virtual economy.

Recently, however, the virtual casinos that operate in Second Life have become the focus of major news outlets, and of the U.S. Government. Ever since Congress laid the legislative smack down to online gambling last year, industry analysts have speculated that Second Life could be the next target for legal action.

The Reuters/Second Life News Center ponders the state of gambling within the virtual world:

Most lawyers agree that placing bets with Linden dollars violates U.S. anti-gambling statutes, which require that “something of value” be wagered. But the degree of Linden Lab’s responsibility, and the likelihood of a crackdown by law enforcement officials, is far from certain.

Kirk Biglione at MediaLoper, however, believes the handwriting is on the wall, and that it’s only a matter of time before the government cracks down on Second Life gambling:

One way or another it seems likely that unregulated gambling in Second Life can’t go on forever. The question that Second Life residents should be asking right about now is “what sort of impact will this have on our world?”

If Linden manages to comply in a manner that satisfies the Feds, they can probably minimize damage to their business — at the expense of losing business that would otherwise have come from casino related activities.

On the other hand, if they continue to insist that casinos are only gambling “simulations” it’s possible that any action taken by the US government could be disruptive to their entire business.

Big names like Coca-Cola have a vested interest in the continued success and popularity of Second Life, so it will be interesting to see if Congress will have to start dealing with lobbyists who represent these companies if they start mounting efforts to take some of the heat off of Linden Lab.