Some residents feel cheated by rules that ban wagering on games of chance or real-life organized sporting events if they provide a payout in Linden Dollars.
Second Life, the virtual world that rose to fame in large part because of the freedom it offered its residents, has once again found that it necessary to curtail the activities of subscribers to accommodate the law.
On Wednesday, Robin Harper, VP of community and support, writing under the Second Life surname "Linden," announced a new policy to restrict gambling in Second Life to accommodate "conflicting gambling regulations around the world."
The new policy bans wagering on games of chance or games that rely on the outcome of real-life organized sporting events if they provide a payout in Linden Dollars, Second Life's currency, or any real-world currency or thing of value.
"As you review this new policy, please remember that Resident compliance with real world laws has always been an integral part of our Terms of Service," said Harper in a blog post.
The abrupt ban left casino owners like Anthony Smith, of Brighton, England, scrambling to figure out what's next. Smith, who goes by the name "Anthonymark Alcott" in Second Life, ran a business called Casino World on a full server -- known in Second Life jargon as a sim. He said he'd invested about $3,800 in the business, plus 12 to 14 hours per day every day since founding the business in February.
"I do not know if I trust Linden Lab anymore to work with," he said. "The way they do business is not good. They change their policy and advise if you don't comply immediately, you get all your assets frozen, or even worse, dissolved. Any other company in the world who treated their clients like this would not last long."
Earlier this year, Linden Lab invited law enforcement officials to visit casinos in Second Life in the hope of receiving some guidance from authorities about the legality of virtual gambling. A company spokesperson couldn't immediately say whether those visits played a role in shaping the new gambling policy.
The spokesperson said that Linden Lab was looking "to broaden the acceptability of the platform globally."
This is not the first time that real-world laws have prompted Linden Lab to take action in Second Life. In May, for example, company officials banned a man and a woman from the virtual world after a reporter from a German television station provided evidence of in-game sexual activity depicting a child avatar.
In fact, Second Life is a lot less free than many of its residents believe. Some of the misperception about the virtual world's freedom may be due to Linden Lab CEO Philip Rosedale's past characterization of Second Life land as being "owned, controlled, and built by the people who are there." Such ownership and control isn't enough to stop Linden Lab from seizing virtual assets for what it claims is a Terms of Service violation, as Second Life resident Marc Bragg found out last year. Bragg is suing Linden Lab to recover about $8,000 worth of virtual assets that Linden Lab confiscated for what it deems to be a game exploit.
As for the gambling restrictions, some Second Life residents welcome the new rules.
Benjamin Duranske, a writer and an intellectual property attorney, praised the decision on his blog Virtually Blind. "It feels, to me, like Linden Lab grew up a lot here," he said. "For the first time in a long while, a potentially controversial policy statement has obviously been at least vetted, and probably written, by the legal department. Frankly, it reads better than a fair number of laws I've had to parse. So at the risk of alienating a lot of readers, I'm going to say… well done."
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Join us for a roundup of the top stories on InformationWeek.com for the week of December 7, 2014. Be here for the show and for the incredible Friday Afternoon Conversation that runs beside the program!