LL has opnely admitted that there is content in Second Life that may break certain laws but they have informed residents that they are responsible for ensuring their content does not break the laws of their governments. And, in truth, LL has also said that while they can attempt to keep things manageable ......
There are millions of registered accounts and tens of millions of different objects in Second Life, there is simply no way for us to monitor content prospectively even if we wanted to - Ginsu Yoon, Linden Labs, Vice President of Business Affairs
The US Federal Bureau of Investigation started poking its nose in and asking some questions baout certain aspects of Second Life, primarily, the gambling portion of it. Bearing in mind that US legislation is made online gambling illegal in the United States, so this was a pertinent request to an American company. In response Linden said.....
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. We have specifically requested that a US Attorney give us guidance on virtual gaming activity in SL, but this hasn’t resulted in clear rules yet. - Ginsu Yoon, Linden Labs, Vice President of Business Affairs
So Linden Labs is not trying to act like some back alley service provider. It realises that to try and fight the US government on this issue would be far riskier, and could result ina complete shutdown of Second Life, and so has decided to try and stay above the law in all respects.
As a result, we now have Linden Labs banning advertising of gambling services within Second Life. The reason for this is that if you stop the casinos from marketing themselves, you are in effect making it harder for casino owners to make their income and so some will be forced to shut down. Some casinos have taken steps to try and make their business comply with US law.....
PalmVegas.com bans U.S.-based avatars from its virtual casino to avoid breaking anti-gambling laws. - Source: Reuters
Unfortunately this may be too little too late. US law enforcement will only start looking harder into Second Life in the near future to determine if action should be taken. Blocking advertising by Linden Labs and even attempts at blocking US avatars may not be enough as LL is an agent of these gambling activites and happens to be based in the US....