American authorities have been extremely busy since the U.S. senate passed the Unlawful Internet Gambling Enforcement Act in October 2006.
The Department of Justice and FBI, with the help of law enforcement both domestic and from foreign nations have targeted the most transparent of online gambling companies along with the unlicensed and unaccountable side of the industry. CEOs of Publicly Traded Companies (PLCs) such as BetOnSports.com and SportingBet.com have been arrested or detained. Two former executives of payment processor NETeller were arrested and await hearings. Gaming PLCs fled the US market. Many non-traded payment processors, software providers, Sportsbooks and casinos followed the PLCs into a voluntary exile, all fearing possible arrest by the DOJ.
Now, the FBI is investigating one of the world’s largest “virtual economies”, to investigate online gambling within, err, online gaming. The Bureau’s investigators recently visited Second Life at the invitation of Linden Labs, the game’s creator.
Second Life is an extremely popular online virtual world that boasts millions of registered users. It has a complex economy and its currency, the Linden dollar, is freely traded for US dollars on the Lindex, a virtual currency exchange. This last fact is what has the FBI very interested in that virtual world’s casinos. In fact, Second Life has many hundreds of casinos, private poker rooms, slot parlors and blackjack dens.
"If you're buying money on the Lindex and utilizing it for gambling purposes, Linden could have a much higher level of responsibility. If they would be found in violation, that's difficult to say, but I can see a much stronger case being made." said Sean Kane, a lawyer who has studied legal issues surrounding virtual worlds.
"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, Linden Lab's VP of business affairs.
Yoon said Linden Labs asked for guidance on gambling activity within Second Life and await a clear indication from the US authorities.
The FBI and the US Attorney's Office has declined comment.
