Virtual world Second Life has shut down all in-world gambling activities, but not because of mounting pressure from the FBI, according to the company.
San Francisco-based Linden Lab, creator and operator of Second Life, decided last week to change its policy regarding gambling inside the virtual world, said a company spokesperson. The decision was made "because there are a variety of conflicting gambling regulations around the world," according to a prepared statement relating to the policy.
The new policy states that wagering on games that rely on chance, random number generation to determine a winner or the outcome of real-life organized sporting events are no longer allowed in Second Life.
While online gambling is legal in some parts of the world, including countries where some Second Life "residents" reside, the new policy adheres to U.S. law, which in October effectively banned online gambling by way of the Unlawful Internet Gambling Enforcement Act (UIGEA).
Casino visitors inside Second Life placed bets with Linden Dollars (virtual cash), but some casinos allowed payouts to be converted to real-world currency, which initially raised the question of legality. The new policy states that players will no longer have this option. In other words, the company has implemented a blanket ban on gambling.
While it is believed that an ongoing investigation by the FBI is directly linked to the company's decision, Linden Lab has denied that an investigation into the company had ever been opened.
Nevertheless, FBI agents in April made at least one visit to Linden Lab headquarters, reportedly at the company's invitation, to determine the legality of the virtual gambling going on inside Second Life. It was also reported that FBI agents went undercover inside Second Life to visit the virtual casinos.
A representative for Linden Lab would not say if the casinos were shut down immediately, or if they would be phased out. But, according to the policy, the ban took immediate effect and owners of the virtual casinos will not be reimbursed for their loss, which could be substantial as Second Life casinos were reportedly some of the top contributors to Linden's bottom line through currency fees and land rental.
Mostly, Linden Lab wants to make sure that Second Life residents, which hail from all over the world, comply with the policy, regardless of the gambling laws in their home country.
The company said it would hire additional staff if necessary to enforce the ban.
"Our staff will review, investigate and respond to appropriate notices. We may retain additional staff or services to conduct this activity," the company said. "When we discover objects or games within Second Life that meet the policy's definition, we will remove them from Second Life."
In April, the company instituted a policy to no longer accept classified ads, place listings or event listings inside Second Life that appear to relate to simulated casino activity.
It remains to be seen whether this decision by Linden Lab will stave off the alleged investigation by the FBI.
The company said, however, that it intends to cooperate fully with any future investigations or actions brought against the company relating to gambling.