Classifieds = Gambling

SqueezeOne-

I could "invest" an afternoon of reading up on different horses' handicaps
and 'invest' some money at the race track. It's still gambling.

"Investment"-like things: Venture Capital, Bonds, Loans, Leases, Funds,
all have an element of risk... and there are many laws that govern what
can and can't be done, and what recourses a wronged party may pursue.

In SecondLife we don't have any of that. The only binding contract we
have is with LL, not with each other. Just about anything goes in-world,
that's not business, that's chaos. There's no recourse to address damages
or being defrauded... that'd doesn't make it more or less like gambling,
I'm just offering that as further proof that transactions within SecondLife
are just that much more removed from 'reality'.

Money goes in... money comes out. What happens in between is not
regulated by real world law, but by the arbitrary laws of the system
called SecondLife. If SecondLife is a game... that makes it gambling.

I don't WANT to be right on this issue.... but it's the side of the argument
I picked. So far I'm rather unconvinced that I'm wrong.

Make me wrong. Please.

It can't be done the way you're arguing. The type of rhetoric you are engaging is... unsound, because you keep redefining things using extreme and/or obtuse definitions of words, logical leaps that would make Evel Knievel run in terror, and/or 1=-1 logic.

But lets take some of this latest, shall we?



Lets see what I'm talking about ok?

Well, right off the bat, you are completely misusing the term "invest". You use it in a way that, while marginally supported by a dictionary, is NOT the same usage that Squeeze was using it in, nor is it the way it is generally understood to be used in the business world. To turn this tactic around, I could "gamble" on a business venture, but because I can shoehorn the word gambling into that sentence does not mean that what I am doing is gambling.

As for the second bit... well, you're just plain wrong. There ARE recourses to address damages - such as copyright infringement, trademark infringement, etc - that go above and beyond LL. In this context, you might as well say "Well, on the internet, we don't have any of that", etc etc - LL is, for all intents and purposes, irrelevant in this discussion. They provided a platform. What goes on with that platform is very similar to what goes on on the internet.

Lets take another example. Ebay.

On eBay, there is very little in the way of these regulations you speak of. Yes, you can take a person to court for fraud - if you can find them. The same holds true, more or less, of second life. One could say eBay is gambling - you wager a small amount of money (What is it, 2 dollars to list an item anymore?) with the hopes of gaining much more money, but no promise of it. But it's NOT gambling, nobody sane has every claimed it IS gambling, and it still runs quite successfully today. In this respect, as well, it's very similar to Second Life - it provides a medium by which two people can do business, one providing something, and one selling something.

Now, to forestall the inevitable: Yes, there are issues with my comparison. But certainly no more than with your comparisons, which is kind of my point.

Yes... If frustrating != boring, then yes, I suppose so.

That also assumes that "bug" === "undocumented feature", though.


.

And my point is that "similarity" does not earn them equal consideration under the law.

Parker Brother's "Monopoly(tm)" is a simplified game of real estate business. "Fun for the whole family." It is, to some degree, both a game of skill and chance.

Would it be legal to hold an on-going tournament for people to play Monopoly(tm) with their real cash? No, certainly not, because that would be far too much like "Real Gambling".

Sure... SecondLife is way more complicated than Monopoly,
and based more on skill than chance (despite the jokes),
and goes on and on, whereas Monopoly(tm) does end sometimes,
but otherwise is it really significantly different than playing Monopoly(tm) with real cash?

I apologize for darting around using different interpretations of various words... m-w.com was no help with 'investment' btw... it makes it sound more like clothing than anything else. My point is this: Right now, from my perspective, playing SecondLife for profit looks like Real Gambling to me. And to a lawyer or judge that isn't going to care about what rules go on inside of this synthetic artificial virtual world... who only looks at it from the outside, it displays many of the characteristics that have resulted in laws being drafted against gambling.

Don't get me wrong, I like that SecondLife has the ability for people to profit, (I don't participate in that use for SecondLife, but don't fault those that do). I'm just seriously concerned that the pressures that have brought the ban on "online gambling" into SecondLife may not be content to stop there.

And they will have stronger arguments than mine to make their accusations stick.

Yes.

In Monopoly, everything you can ever do exists within a very very limited subset of options - essentially, there is a finite amount of possible permutations of monopoly, no matter how large a number that may be. The game determines what you can do, and governs that in an absolute, draconian fashion by virtue of several interconnected random events (Random draws of two different decks of cards, random rolls of dice to determine how far you can move, random rolls to see who goes first, etc.)

In SL, this isn't true. The only limitations in SL are those of a technical, legal, or (occasionally) behavior nature. Beyond that, there are neither limits nor guidelines. Any success - or failure - is not random, nor is it part of "the game". It simply is. Nor do any truly "random" statistics (Beyond the much joked about hardware failures) enter in to it; LL does not roll dice to determine how much money you get with your stipend, and PixelDolls, Bare Rose, and Blaze do not draw cards to see who sells the most shirts this week.

To put it another way; ever play the game Mousetrap? It's kind of a stupid game, because all you can do is exactly what it lets you do. Its a codified, limited, regulated /game/. By contrast, a company designing mouse traps is not playing a game. To take this to SL, by virtue of your monopoly example. In monopoly, you can "develop houses". But only as a contrivance within a game. With Second Life, you can create houses as a matter of art, and sell your artwork, or you can develop real estate with houses on them to rent to other players, or you can simply have a house. But none of those states represent any intended use of the service - the service simply is, and you decide what you want to do with it. It's not a "game" to make money by selling your artwork, it's not a "game" to make money by being a landlord, and it's not a "game" if you choose to do none of the above, otherwise they would not all be valid interpretations of how you can use Second Life.

Or, to put it (yet) another way, if you "win" at second life, it's a goal you have set, not Linden Lab.

Content creation is an important component of SecondLife. There's artistry to bluffing too in poker as well. There are layers of complexity that go beyond the basic rules in any system... whether those permutations and combinations are infinite or merely "very numerous" doesn't make something a game, or not a game.

The creation of intellectual property within SecondLife are, unless imported/exported from RL sources... largely untested in court of law. If some game designer saw Tringo, and rather than contacting the creator decided to rip off his creation and use it somewhere else, it would be very interesting to see if the original author would be able to get a court of law to recognize that he was the true copyright holder of the game.... which, otherwise, existed only within and on LL's virutal domain.



Some people gamble at casinos and their real goal is to pass the time, get 'free' drinks and socialize. Intent shouldn't fundamentally alter the act of taking a risk for possible profit.

And yes, there are lots of risky ways to obtain profit, but all the ones I can think of have special names and are heavily regulated & taxed by the government: Business, Banking, Trading/Shareholding, Bonds, ... oh and in some places legalized gambling.

If "Gambling" isn't an ideal word for risky profiteering that goes on in this 'Game' of SecondLife, practically free of government regulation... then help me find a term that is better suited to the task.

? Flea Market ?

Having read through the entire thread, I'm requoting the original post to say, yes, you are wrong. The reasons why you are wrong are many, and several people have already explained them. Yet you persist, changing your argument slightly as needed, to continue to make the ridiculous assertion that SL business = gambling.

Gambling has a legal definition as it pertains to the laws that Linden Lab has to obey. Whatever an SL business might be, it is *not* gambling under any but the most casual definitions of the word.

I am halfway convinced you are trolling, because this does not seem complicated to me.

AMEN to that. And also, the "this is the end of SL" threads.

Ok, this is getting juvenile. We're back to the "shoehorn the wrong word into the wrong context" game again.

If you are honestly comparing art with gambling at this point, I can't argue with that, because it's so far from accurate as to not even have a common point of reference to begin from.



But the fact that it is largely, but not completely, untested doesn't invalidate the concept.



1=-1 logic.

Owning a club with a casino "theme" in SL, with non-functioning games for people to drink and socialize in would not be gambling, and would not be banned. That is not a "game" either. Simply being in a casino is not playing a game.

If you put money in the machine, you do so to win. Pure and simple. Winning may not be important to you, but you have put money in a game that does exactly one thing: Plays a very specific game with very specific possible outcomes, some of which are clearly defined as "win" and some of which are clearly defined as "lose". There are set, measurable objectives. The all-you-can-eat casino buffet? Does not have one thing to do with the slot machines. The girl carrying drinks around? Does not have one thing to do with the blackjack tables. All of those things are fluff - and if you opened an establishment with all of those things, but no gambling games, you would be perfectly within your right to do so. The gambling component is very specific.



And most of those can exist quite happily within SL as well.



I think you've already nailed the terms. You just want to keep trying to shoehorn "game" into the equation so that you can keep trying to cram "gambling" in there as well.

Wow. I never thought the day would come when I disagreed with Rusty. /me marks down August 1, 2007 in his special occasions notepad, with a special notation that he's probably only half serious about this, if that.

My opinion is already pretty well encapsulated in previous posts, and I need to get off my arse and get to work, so I"ll leave it here for now.

There is no chance involved. You pay for an advertisement and you get it. They payy off comes through making sales to customers that the ad brought to you. Which requires a product or service worth buying.

It's not a game of chance.

The issue I'm stuck on is this, here's why:

I see no reason for any judge or lawyer to treat SecondLife as anything but a "black box", because it is wholly owned proprietary system run by solely by Linden Lab.

The fact that what goes on inside that black box simulates things in reality is unlikely to make any difference with regards to how the service as a whole is considered under the law.

From that point of view, people put money into this black box and, later, some take more out than they put in. Regardless of what goes on inside the box owned by Linden Lab.

Every other instance I can think of where a business or institution allows people to deposit/loan/invest/buy-into using real money (and then sometimes get more back later) is regulated and taxed by government. The exception being illegal/unregulated gambling.

Some people treat SL as hobby income, some as a job, and report it. The more people that don't, and the more SL grows as a single entity, the more likely it is going to be subjected to regulation, perhaps not equated with gambling, but LIKE gambling.

I'm sorry I'm harping on and on from this absurd angle... and thank you all for trying to bring me around, but I'm just still not there yet.

So isn't it really more of a taxation issue than an "is this gambling" issue? JEC has been (might be finished now?) studying the economics of virtual worlds from a taxation standpoint, however I've not heard of any government entity anywhere who has ever hinted that they might take a look at Second Life as a game, in the sense of wagering on an outcome entirely up to chance, which I'm having a hard time buying in any sense, other than the realization that there are unintended stability issues which greatly affect one's chance of earning a profit in SL.

The platform itself is designed from the ground up to be as open ended as possible, and warts and all, I think users have far too much control over the outcome of their endeavors to be able to comfortably call SL a game of chance.

Except you're missing the key here; the work being put in by the person/company one invests in. Then there's the fact that investors (depending on how much they invested) end up having a say in the company.

The horse isn't going to run faster because it knows there is a 10,000.00 bet on him out there somewhere.



This wasn't always the case. It wasn't gambling back before these laws came into place...it was just much riskier.



Welcome to the Roaring 20's.

You're right, the only business guarantees we have are trust and visibility. I'm more willing to trust a guy that gives up his RL information than a guy with "no payment info on file". Even then I wouldn't put more in than I can afford to lose.

All the money I have in WSE (that I somehow conveniently can't get to right now > ) was earned off of my shop's sales as are all my account payments. I'm more upset at the emerging business practices from this situation than losing my money. Even then, I've made much more off WSE than I stand to lose right now so even if it all falls apart tomorrow I'll still come out on top!



We'll have to see how the SexGen lawsuit turns out before we can know what recourse is available in SL businesses.



Don't worry, you're safe there!



You're ignoring key points that have been repeatedly brought up in favor of half-baked comments such as the one at the top I quoted.

Another difference between gambling and investment is how the investment itself can potentially alter the outcome in business. If I get a million dollar guy to back my company I'm going to crank up the heat on my work a bit more than if I was running out of my garage. I have more to work with that way. But in gambling it'll be the same randomness if it's .01 or 10,000.00.

I'm not saying SL is a WISE investment because you're right, it IS a game that many people take too seriously for the wrong reasons, but it is still an investment that runs on more factors than just blind chance and dumb luck.

Look at Ginko. Half of their current issue is the fact that other people are reacting to the news that they're not doing well. The run on their bank by their customers is making things worse. That's investor participation at it's worst!

A legitimate Roulette game's outcome isn't going to change because Donald Trump is at the table.

I personally don't have a problem with gambling other than how gambling can be a huge problem for certain people with addictions and other problems. I think this is why there are some of the laws and regulations on gambling that there are...but that's another thread!

Exactly. Content creation business is not a game of chance, one can argue that game theory applies to business and marketing (both SL and RL - the rules of the "game" are not really different), not to mention evolutionary theory, and real life economics as well, but game theory =! gambling. Unless these folks want to make the half-baked assertation that life itself is a gamble, and therefore should be banned.

Classifieds are advertising, sometimes a riskier sometimes not. Comparing it gambling is wrong. I'm not going to win a jackpot with a classified ad. I'm also not going to lose all my money either.

And what of the bigger money types? Like landbot owners?

The game for them is "snap up as much cheap land as you can, and flip
it quickly". Heck, they even have a program to play that game for them,
and the profit they make likely puts most of the content creators to shame.


It does come down to taxation and regulation, I certainly agree with that.

SL is way small-fry when it comes to the IRS. I can't see them expending
the effort to carefully investigate and determine that Person X's needs to
pay rental tax... Person Y is collecting Royalties... Person Z is a money-trader...

They're going to generalize, and probably slap one big tax law on SL's profiters,
(one vague enough to apply to IGE's users, and other exchanges that trade game
money of any type for real money) and call it a "Gaming Tax". It will likely
be similar in nature to gambling tax... because much of the money going into
SL is from people seeking entertainment/recreation/play, not from people that
need SL to earn a living.

Anyway, this issue has been banging around in my head for a while, sorry
it came out so unstructured and chaotic. Thanks for helping me think about
it differently. The risk of SL earnings being treated as 'online gambling winnings'
is lower in my mind than before... somewhat.

Their day will come. I treated that subject in another thread

Actually, I think we'll always have land bots, but if LL keeps going in the direction they claim to be going in, well... land eventually won't be the "free money" commodity that it used to be, and you'll have to ... oh no ... work at making it a place that is attractive for anyone to buy.

See, that's what this is really about. Working hard to build a business that makes money by providing something of value to a consumer vs. getting a free lunch if you just risk a little bit of income and maybe you'll get "lucky".

Some do, but most don't - and that's what keeps a gambling biz in biz.

Their game only seems to work when people don't understand what they're doing and put their land up for sale at low prices. If more people understood that then there wouldn't be as much of an issue.

People that sell their land should put it to a high price and put something in the description asking potential buyers to make an offer.

I totally low-balled a guy that had such a setup with land he was selling. I didn't expect much from it but he totally went for that number! I wouldn't be surprised if he was protecting against landbots! But I digress...

Landbots are an exploit of a loophole. That happens all the time in business.

I still don't understand why it even occurred to you to think that at all. It is true that SL businesses do not operate under the same regulations that govern real-world businesses, but it's also irrelevant for this point. They still are based on the seller making a product or offering a service and the buyer choosing to pay for it. There is nothing even remotely similar to "gambling" there.

The taxation issue remains to be seen I guess, but I don't think your scenario is likely. Linden dollars only have value in-world until you cash them out, and at that point I don't see why they wouldn't be treated as regular income by the government of whatever country the particular person is in. and subject to the normal income tax laws.

The only reason gambling was a matter of the new policy is that there are laws that specifically pertain to online *gambling.* But the law, and the policy, are pretty specific about what that is, and profits from selling virtual creations are not among them.

Yes, it has been irrelevant but the wall between "in-world" and "reality" is being chipped away. The ban on online gambling knocked out a big chunk. (also, keep in mind that while some people profit from selling virtual creations... the land and money traders however are likely doing more of the profit taking with regards to SL.)

With regards to 'income' made from SecondLife: In reality, employers are required to report how much they're paying each employee and contractor... and LL, IGE, etc, are not (yet) so required. Most business models that pay people are required to document and report (usually in summarized form) who they're giving it to and for what reason.

We may be reporting SL earnings as 'income', but the IRS may decide that is not an appropriate term to describe "variable unsubstantiated earnings gotten from something that seems like a game". Without clear receipts or reporting from the flip side of the transaction explaining why they're giving us more money than we put in... the IRS have a difficult time considering our earnings to be 'income', 'revenue', 'interest', 'sales', 'royalties', 'cap gains', and may simply call them 'winnings', unless they can come up with something more appropriate to compare SL earnings to.

(somewhat unrelatedly.... Why don't resident of California pay sales tax when buying L$ via the LindeX anyway?)

I think you're blurring the lines there. Linden Lab has not given us a specific reason for the ban, but we do know there is a US law about ONLINE gambling that applies to LL. If credit card companies decide that SL is in any way an online gambling site, they can deny payments to LL.

This is not chipping away any wall. This is acknowledging a law that specifically applies to Internet-based activity. If the law was about real-world casinos and LL decided that SL casinos were the same thing, then you'd have a point, but that isn't the case.



Well they MIGHT call them "winnings" but so far they haven't, or shown any sign that they are thinking about it, and even if they do that wouldn't make them the same as gambling. You are going on complete speculation there.

But in fact, you don't actually have to have a real-world business to be covered by the tax laws, at least in the U.S. There are rules in place for the self-employed, people who earn money without having a single steady employer. People whose primary source of income is making and selling things on eBay or in local shops, or write freelance articles, or hire themselves out as wedding photographers, etc., have been through all this already.

They are not always incorporated as businesses, and yet their self-employment is provided for in the existing tax code. That would seem to apply quite directly to SL businesses, those few that are successful enough for their owners to even have to worry about taxes, and if it ever is determined that an SL business is somehow different, then Congress will have to amend the tax code to accommodate it.

And to keep in perspective, how many people are really making enough money from an SL business for it to even matter? You'd have to be cashing out several thousand dollars a year to even have to worry about it, and while I know there are some who do, I doubt there are many.

Those who do, by the way, really should already be keeping the kinds of records you're talking about. I do not think the US government is likely to lump SL business profits in with gambling winnings, but I do think they will not want those people making significant money from it to fail to pay taxes.