What will this do to our casinos?

From csmonitor.com
http://www.csmonitor.com/2007/0122/p14s02-stct.html?s=u3

Quote,
" Some SL businesses already may be operating outside current law. Casino gambling and sports betting are pervasive in SL. The fact that bets are made in lindens, not dollars, won't shield gamblers from possible prosecution under federal laws banning Internet gambling, says Jaclyn Lesch, a spokeswoman for the US Justice Department. "Regardless of how one pays for the bet, it is still a bet if it involves something of value. While not a credit card or cash, [virtual currencies] would still be a thing of value" especially considering the fact that they are later redeemed for cash. " End quote

Should we worry?

Actually the act of gambling on the internet is not illegal in the U.S. with the exception of sports bets. The act of being a vehicle for moving money to and from gambling is.

Section 5362(6) defines unlawful Internet gambling to mean placing or receiving a bet “where such bet or wager is unlawful under any applicable Federal or State law.”

Apparently the only betting that is illegal "by wire" is sports betting.

So big caveat: I am not a lawyer, nor do I advocate gambling, either operating an establishment or placing bets, but the assumption that having a casino or gambling in them is against U.S. law may not be correct.

Providing a means of transfering funds used for wagering is, however. Meaning that Linden Labs is more likely to face these issues than any casino operator in-game. And no one in the U.S. has yet been prosecuted for using an online gambling service.

Again: I am not a lawyer. My views may or may not be correct. My opinion or belief, however, is that at the moment casinos and customers operating in SL are not in fact violating the law (except those with sports betting).

When this came up the first go-round, didn't LL's lawyer say that it was the standing of the company that L$ aren't a real currency and have no intrinsic value (ie, you can't go to the store and buy groceries with L$) and therefore not affected by the Internet gambling laws?

It's very possible he said that. However the U.S. Department of Justice has just said that claim is untrue. Care to guess whose opinion holds more weight?

Yeah, anyone can say anything they want, but that doesn't make it true.

I'm not debating whether that statement was legally valid or not, I was just trying to confirm what Linden Labs' official position was, if they ever took a hard stand.

Personally, I find the law as another crass example of how the government is unable and unwilling to keep up with changing technology. But that's another issue for another thread...

Actually, I'm thinking that the U.S. Justice Department would be eager to discuss the matter with lots of people. In court, of course.

At any rate, once a few of those little discussions take place, there will be a definite 'answer'.

Ginsu Linden's most recent comment on the subject is found here:
/139/e8/140841/1.html#post1300289

Dote all due repect, that post makes me laugh. The take ourmoney right? The promoto the game to the point sounding like everyone make millions of Linden. The lead us to believe that we do own object we make. The say they stop copywrite abuse. The say IBM is opening a shop but really its only their name........They say bla bla bla...............................

Interesting link through Ginsu's post.

Before the senate (now? I'm not sure)...

http://thomas.loc.gov/cgi-bin/query/F?c109:4:./temp/~c109BwfT6j:e11740:


Fines; up to five years in the slammer.

Most notable: ten million USD a year appropriated to go catch and prosecute people. Personally I don't think that's a lot, considering what must be out there.

Prosecuting a high profile case against some rich gambling magnate with good lawyers must cost what, maybe a million?




I'd imagine gambling here to be really small time and hardly worth chasing, but how hard could it be?

- Free SL account: 0 USD.

- Buying $L 250 to test a grid slot machine: one dollar.

- Retaining a lawyer to obtain real life records along the cashout money trail and prosecute: maybe 10k USD.

Plus the Feds would get massive media exposure cheaply for doing it here, which might just be the 'chill in the air' that would stop a lot of activity before it even started.



Another thought. It's interesting that such a bill exists at all. Internet gambling in the United States is already unlawful, yes? Mostly by a patchwork of state laws.

What I haven't figured out is why more legislation on a federal level is needed.



Lastly, the internet gambling issue is a cousin to the taxation issue. There are games of chance in various offline games, clearly not unlawful gambling.

At what point does it stop becoming 'just a game' and does become unlawful gambling?

As I recall, there are many online worlds with games of chance built right in. Is anyone going to be 'busted' for gambling in World of Warcraft, just because it's clear that the 'money' over there has value?

Much to think about.

Oh, hey! I got a novel idea! If the Linden argument is correct, we could set up a legal gambling operation using little plastic chips instead of real money!

Seriously, I also doubt if it's worth chasing. I'm not a lawyer either, but that only makes the legal sophistry more ridiculous if even I can see through it. Although actually, all the Linden lawyer really said is that they are not at fault for what people do in the game and that they aren't the ones exchanging the plastic chips for real money. He/she was also quite careful in pointing out that his legal advice was for the benefit of his client, and that us players are not his clients.

From csmonitor.com
http://www.csmonitor.com/2007/0122/p14s02-stct.html?s=u3

Quote,
" Some SL businesses already may be operating outside current law. Casino gambling and sports betting are pervasive in SL. The fact that bets are made in lindens, not dollars, won't shield gamblers from possible prosecution under federal laws banning Internet gambling, says Jaclyn Lesch, a spokeswoman for the US Justice Department. "Regardless of how one pays for the bet, it is still a bet if it involves something of value. While not a credit card or cash, [virtual currencies] would still be a thing of value" especially considering the fact that they are later redeemed for cash. " End quote

The end is near? Thank god? We'll get our sims back from these resource hogs?

For true comedy gold, can we get a series of links back to the people who were laughing when it was suggested that legal action might be taken against SL gambling and casinos?

you quoted csmonitor...regardless of the validity of the statement, at least lie about quoting those fanatics

The interesting part about the post is the quote from the US Justice Dept Spokesperson, not the story from CSMonitor...

As a point of fact, the Christian Science Monitor is actually one of the more credible news sources out there. The Christian Scientists exercise minimal influence over the paper's content, and their coverage of world events is widely considered more objective and comprehensive (and less sensationalistic) than most other news services.

Sorry, this is not the case.

As the $L does not have any 'true value'. you buy play money at the price LL sets for it to play their game.

Online "for entertainment purposes only" play gambling sites STILL exist and are run in the US after the new law and you can see their adverts all day on ESPN and other networks that carry the poker games on the TV.

Bodog and a few others come to mind, like the one that Dennis Rodman is promoting.

SL would fall under the same terms as these 'entertainment sites' that have online casino games.

As the $L isn't a real currency, they can't touch it. It's not like LL is printing money for their little world, it's data in a database and there are as many $L in the world as they want to have in a second and they pretty much set the value for them to buy.

Not this again. It DOES NOT HAVE TO BE CURRENCY; it only has to be anything of VALUE, just as the US Justice Dept spokes lady said. Those sites you talk about do not let you trade USD$ for something which can then be gambled with and then transfer back to USD$ again. On those "playmoney gambling sites" you simply sign up, get a fake balance which you can fake gamble with. You can never redeem any of the fake money for real USD$ or any other currency or trade it with anyone. That is totally different. The fact that L$ can be traded on a market means it has value. Even water has value and gambling with it, is by definition, illegal.

Your last part about LL "not printing money for their little world" yes they do! They add it to SL via the LindeX everyday! It may be data on a database, but so is over 70% of USD$. In fact, I'm looking at my bank account right now online, no cash in hand, does that mean my USD$ is no longer worth anything? Most money in circulation in the US has no physical paper or metal form, it is simply numbers on a database. The USA and many other countries manipulate their money supply all the time as well. They add more when they want interest rates to go down, and take some out when they want rates to go up. Same thing.

It is obvious that the Justice Dept does not agree with you, and those are the people we need to worry about. There is a river in Egypt, it is called DENIAL...

It wasn't "real money" back when all the number games were banned from WoW.

This thread is a duplicate of a discussion we started yesterday, complete with lookups of the last known Linden positions.

/327/9f/162443/1.html

"The fact that bets are made in lindens, not dollars, won't shield gamblers from possible prosecution under federal laws banning Internet gambling, says Jaclyn Lesch, a spokeswoman for the US Justice Department."

Looking at this again, I just realised something.

She is talking about prosecuting GAMBLERS, not the people who run casinos.

Perhaps a minor distinction (depending who you are!) but I can't help but take the words at face value. She is discussing possible prosecution of the gamblers.

Can you imagine how *incredibly* easy it would be to set up a sting operation to catch a zillion gamblers on the grid?



"Play Texas Hold-em, and you may win an all-expenses-paid, five year VACATION!"

Hoooo boy!

While I'd love to see a few casinos bite the dust - they're horrible lagmonsters, often consuming all the resources for an entire sim in one go - one must consider the source here.

"A spokeswoman for the US Justice Department". Not even an attorney. And the words "virtual currencies" were inserted by the person reporting the information, and were not even said by the spokeswoman! This is the interviewer injecting a completely unqualified statement into somebody else's speech, essentially putting words into the spokeswoman's mouth.

No, ladies and gentlemen, the end is not near just because some irresponsible journalist for the Christian Science Monitor says it is.

Further, the very same article quotes Dan Miller, a senior economist working for the US House Joint Economic Committee as saying that it is very clear that taxation of a virtual economy can only occur when game points are converted into actual currency, a clear acknowledgement that Lindens are valueless in and of themselves. This recognition means that the gambling laws do not apply to gambling that takes place within SL, because it has no intrinsic value.

Before posting articles like this in the future, please read them.
Next item of business?

You should take your own advice, Kalel.

Dan Miller's actual quote was:

"According to Miller, some things are pretty clear. "The income tax already applies to income that is removed from virtual economies," he writes in an e-mail – as in when an SL user converts lindens back into US dollars. But the subject of taxing assets inside SL is more controversial, he says. "Based on our initial assessment of virtual economies ... virtual worlds need greater clarification, not additional taxation," he writes. "Governments have a hand in regulating many aspects of physical economies to one degree or another, while the government's presence in virtual worlds is relatively minor.""

Miller is not saying, as you contend, "that it is very clear that taxation of a virtual economy can only occur when game points are converted into actual currency", but rather that it's trivially obvious that taxation should occur at least when proceeds are cashed out, and possibly before then, depending on the nature of the transaction. If it's true that service-for-service transactions are taxable in the real world, then such a transaction would also be taxable in a virtual world. *That* is what one should read in Miller's quote.

As for the writer putting words into Jaclyn Lesch's mouth -- it's entirely likely the quote was paraphrased for clarity. If she had said something like "Regardless of how one pays for the bet, it is still a bet if it involves something of value. While not a credit card or cash, Quatloos would still be a thing of value", then it's not at all improper to substitute [virtual currencies] for Quatloos to reduce jargon and make the story more clear.

All things considered, I'm inclined to trust the journalist's reporting of the opinion of the spokesperson from the DoJ. And not just because they support what I've been saying *all along*.

"Apart from the sale of "manufactured" goods, people also earn lindens by providing services, which can range from serving as staff in stores to working in the thriving escort industry, a polite term for virtual prostitution."

Isn't prostitution against the law already? lol

All comes down to the Government wanting more of your money in taxes.

And that would mean a whole bunch of people making any profit that is cashed out of SL need to claim it. Whether gambler, hooker, landscaper, candle stick maker...

Wether gambling in SL is legal based on the "value" of the L$ is a moot point of arguement. Can it be exchanged for USD? Of course. So can Monoply Money if you can find a collector to buy it. Many arguments can be made on this from both sides. And both will have valid points.

My view is a bit more simple (probably because I'm not a lawyer so don't think in unnessicarily complicated venues): I pay LL USD to play SL. Any L$ I make here is used in-world. To me, L$, wether made by selling items, buying it on the Lindex, or winning it in gambling, has no more real world value than gold collected from killing monsters in a non-online game. Since I have never turned a single L$ into a single penny, the US Justice system, and this "reliable source" can, in the immortal words of Bart Simpson, Bite Me!

~Jessy