FBI Enters Virtual Gambling Craze!

And they were invited!

It's all about gambling online at "Second Life" with "Linden dollars," you know, the kind of economy that reminds me of Club Med, where you vacationed at beachfront facilities and conducted all your affairs in Club Med currency, and got to leave broke in real $. What I really find amusing about this story is that the creators of Second Life, Linden Labs, actually convinced the FBI to check out their online virtual gambling gig! What is this world coming to?

The FBI was once interested in me, but that was at least for good cause, or what they thought was good cause, because they accused me of running an interstate casino-cheating ring, and then in cahoots with Interpol accused me of being in control of an international cheating ring. Now, we all know that none of that could ever be proved, so maybe the FBI now figures it will have better luck chasing Second Lifers and giving them "life" in a real non-virtual prison in a real non-virtual world. We shall see. The story as it was written follows:

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.

Yoon said the company was seeking guidance on virtual
gaming activity in Second Life but had not yet
received clear rules from U.S. authorities.

The FBI and the U.S. Attorney's Office for Northern
California declined to comment.

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.

"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."

Linden Lab's rules prohibit illegal activity.

"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.

Even if the law were clear, he said the company would
have no way to monitor or prevent gambling in Second
Life.