The Economic Impact To SL re Casino and other issues

On the fair principle that if it walks like a duck and quacks like a duck it probably is one.....

Many (but not all) avatars come into SL for two things, sex and/or money.

This in turn powers a type of economy, which in turn has developed into a virtual FUNGIBLE currency known as the Linden dollar. In other words Linden dollars can be converted into US dollars.

This process is explicitly allowed by Linden Labs, indeed Linden run their own exchange to enable that process, which in itself is a profit centre for the company.

In turn sex and money power the economy. This is relevant in real life because many avatars have moved beyond the "in game" concept and have invested significant amounts of time AND money to harvest this revenue stream. Nothing ever changes both in virtual or real worlds.

Sex has recently come under attack via the age play issue. It remains to be seen if more mainstream sexual activity within Second Life will be impacted. But given the nature of the real world I suspect that is a significant risk. Paid for sexual services has always been a "deep background" business in first life, tolerated at best in many first life locations, illegal or partly illegal in general in most.

Ditto gambling.

Therefore from a SL economic viewpoint I see the platform will come under some strain, as the entire economy is directly or indirectly dependent on these two power horses.

My opinion is that these two issues will impact across the entire platform. Many people will no longer be prepared to invest significant first life financial resource into SL while these two issues rumble on. The legal financial risk is too great, notwithstanding the other issues of software stability that plague SL.

Yes many Sims will become more peaceful, less traffic, less (or no campers) less lag, and more peace.

But the price of this is much much less real money within the system. The smart money may leave. In other words SL may become a social or fantasy platform with no real relevance to first life economic gain.

That is my view if this legal pressure continues

Finally this is not all just opinion, I do have one real time tool to access the economic fallout and that is the WSE, Second Life's Stock market.

www.wselive.com

2 days ago you could sell multiples of tens of thousands of Montana's Poker Room (MPR) at $L2.10 per share. Today as I type its $L1.53 on the bid and one single sale of 10,000 would drive the price down to $L1. Another sale of $L18,000 would cause the bid price to be less than 26 linden cents.

A similar situation exists for Ginko Investment Fund (GIF) an exchange traded share investing in a broad range of businesses across the entire spectrum of SL, again a few days ago the posted NAV was $1.32 per share, with nearly 400,000 shares on the bid at that price. Today it is $L1.12 and serious support does not start until you go down to $L1.00.

Give or take, the immediate financial impact is around 30%. That’s real money folks from Second Life traders who may understand this business and have taken a financial decision with their own money.




Regards

John

with the last name of horner, your in the sex category right?

No I am not.

I am (or was in Second Life) in the money business. I sold out a few days ago.

I will not invest in sex for personal moral reasons but respect other peoples right to choose within very broad limits

Regards

John

he would need the first name of mike for that to be true. =P

Debate the issue (if you wish) rather than take the Michael out of me. It's your money, not mine -

sorry john. didn't mean to derail your topic.

I've always thought that basing a RL business upon business in the SL platform quite risky for multiple reasons, including the issues the OP points towards. Sweeping changes can occur overnight. A market may disappear or become limited in significant way.

Personally, I have a very small SL business. I have one goal really. Make enough to pay tier. That way I can go about having fun at no significant RL cost.

I also wonder in the back of my mind, whether there will come a day when LL will no longer send out credits for RL money based on Lindens sold. That would be a way to significantly reduce a lot of liabilities. If no RL can be made, then an SL business like the escort business is no longer "sex" for "money", it is clearly "virtual sex" for "virtual money". Gambling would no longer be gambling really - there would be no RL money to be gained. If the exchange only supported money put back into SL - e.g. paying tier or account fees - there might be much less liability to be pondered.

this is an interesting subject.

I still think most of the money in Second Life is in the Playing House business.

Though you are right about the big business part, the sex biz and gambling are going to be changing.

Changing, yes, maybe for the better even. But they won't disapper. Creative entrepeneurs will find ways to reinvent themselves.


About this Playing House now.....

FUNGIBLE is a great word...

*goes to find a dictionary*

I dont think that there will be any impact at all on sex play within SL, beyond no longer allowing advertising certain things, (such as those which are illegal irl ) which is fair enough. it 's not designed to prevent people from doing what they want, just so that their activities are less likely to offend others.


as for the gambling thing, other threads have mentioned that SL does not advertise itself as a casino, and therefore is unlikely to be threatened by any sort of action. plus, they'd never be able to regulate a non-gambling rule in SL.

again, they could remove any advertisement of gambling, but I dont think that will happen either.

I think that Linden Labs has demonstrated that they can change the rules on us at any time, with very little notice, and according to the TOS, we don't really have any way to stop it. The casino, the sex ageplay, and, noticeably to some small business owners, the change in the search function to uncheck the box for mature regions, ruling out even PG businesses from being found if they happen to be in mature regions, I think are just the beginning.

Knowing that LL can pull the rug out from under any of us on the drop of a dime makes any business here a very risky venture. I wouldn't be surprised to see changes to the LindeX to make it more difficult to draw money out of the SL coffers, on the basis of "it could possibly be illegal income, therefore we can't let it out of the game". Or they could do away with the LindeX altogether. Or they could start reporting all of it to the U.S. government. Or the U.S. government could start an investigation and stop LL from transferring money out. If any of those things happen, I don't want to have a lot of money tied up that I can't get out.

Because I've realized just how fragile my SL existence is, I've decided against investing more money and expanding my business here into other areas. Right now, I make enough to pay my fees, and I've earned back my original investment into SL, which I plan to withdraw immediately. From this point on, I will only keep enough money in SL to pay my tier and premium fees.

This may be a radical position but I see something I'd call mainstreaming. Like 8mm videotape, the VHS, the world wide web and many other technologies, often the underground economies 'establish' and then the masses follow.

So what I see is that the Public Relations Railroad is at last bringing the masses to the metaversal frontier.

The freedoms of the wild grid are fading, the saloons and bordellos are turning into suburban housing tracts and corporate parks.

My guess for say, the next year or two would be this:

Business:

gambling industry: down
sexual industry: down
land business: up
corporate development services: up
avatar development: up
events industry: up

Demographics:

young male 'early adopters' - way down
extended first life families - way up
corporate employees on the job - way up
US or UK nationals - down
non-US nationals - up

Clearly I agree with John in one way, though. Explosive growth opportunities are fading.

There will never be another opportunity like the one Anshe took advantage of to make her millions. At least, certainly not in the land venue.

Even more so, while creating something like my Caledon is still theoretically possible, at today's sim prices it is far harder to get started.

A 1250 USD risk could gain you about 200 a month on expenses of 200 a year ago; now a 1675 USD risk could gain you about 200 a month on expenses of 300. Or you would have to buy a dozen sims in a bloc on the mainland up front to maintain any kind of identity - a 24,000 USD up front investment.

* * * * *

We are mainstreaming - the easy pickings going, suburbia rushing in, and officeworkers replacing the cowboys.

Can people still make money and survive? Sure. But the 'fast money' is fading, the opportunities for Joe Average drying up, and the frontier is becoming home. We've seen it all before.


There's a black man with a black cat
Livin' in a black neighborhood
He's got an interstate
Runnin' through his front yard
You know he thinks that he's got it so good
And there's a woman in the kitchen
Cleanin' up the evenin' slop
And he looks at her and says, hey darlin'
I can remember when you could stop a clock

Oh, but ain't that America
For you and me
Ain't that America
Something to see, baby
Ain't that America
Home of the free, yeah
Little pink houses
For you and me
Oooh, yeah
For you and me

Well, there's a young man in a t-shirt
Listenin' to a rockin' rollin' station
He's got greasy hair, greasy smile
He says, Lord this must be my destination
'Cause they told me when I was younger
Said boy, you're gonna be president
But just like everything else
Those old crazy dreams
Just kinda came and went

Oh, but ain't that America
For you and me
Ain't that America
Something to see, baby
Ain't that America
Home of the free, yeah
Little pink houses
For you and me
Oooh, little baby
For you and me

Well, there's people and more people
What do they know, know, know
Go to work in some high rise
And vacation down at the Gulf of Mexico
Ooh, yeah
And there's winners and there's losers
But they ain't no big deal
'Cause the simple man, baby
Pays for thrills
The bills the pills that kill

Oh, but ain't that America
For you and me
Ain't that America
Something to see, baby
Ain't that America
Home of the free, yeah
Little pink houses
For you and me
Oooh
Ooooh, yeah...

Playing house always was the most popular part of Second Life after the initial sexual explorations and gambling binges anyhow.

And these are the people who the corporations are going to apeal to.

Still think theres a lot of Americans yet as a market. Especially with it becoming a more mainstream type of place. So Im not sure the american demogrpahic will be going down.

Any business that wants to be mainstream is going to be less apealing to those on the edges. A less corporate-minded system (perhaps one of these peer to peer types) might sweep some of those up. Its the exact same niche discussion we had a couple weeks ago.

So yeah disneyfication will continue the more risque sex stuff will gradualy move out of the spotlight. Or less gradually with help from LL.

In a way its following the trends of the internet. Its much more mainstream and much easier to avoid sexual things now.

Thing is if its becomes too happy happy disney toony a lot of us will get bored and leave. SL wont miss us they will have lots of more normal folks to replace us.

Great analysis Desmond..I would add that there will be increased work for skilled builders and scripters as the demand for more varied activities increases.

The need for more services and events might fill in the economic gap.

Amsterdam sim sold for so much because it was a great build with name recognition and I think that could be an indicator of the future.

John Prine right? Illegal Smile

Desmond and Dnali et al, you've some great points.

I would like to add, however, the economic impact won't be as great as 30%... it should be considerably less. Gamblers convert money to Lindens, lose their Lindens to the casino owners who then convert their Lindens to money that they pocket. How does this stay "in world"? And I'd be hard pressed to swallow the pill that says that most gamblers "make money" here -- or else why would there be casino owners operating on as little cash as possible to make as much as possible?

Business here will evolve and shift, like any other socioeconomic region. The smart people who DO want to make money, will do so. The fly by nighters and get rich quick schemes will diminish.

And then there's those like myself who are simply here to observe, enjoy, and spend some of that disposable income that was previously allocated to other forms of entertainment.

This world is what you want it to be, and that's beyond fantastic.

What do you want? Dream it, make it, live it. It doesn't get much "cooler" than this.

Cheers.

Lucrezia

I think he is saying that it's a 30% impact on the Stock Market... as the stock market doesn't have the impact that a real world one does all this ruling does is make Casino's harder to find. Casino's will probably lose some money as they find it harder to get people through the doors but overall the impact on SL as a whole is between negligable and non-existant.

Why do I say that? Because Casino's aren't a big part of SL - certainly not in an economic sense.

Correct - The odds always favor the House.


Great point.

I do agree. Unfortunately the same souless Corporate Behemoths that invade our Real lives are becoming part of Second Life. Hopefully it will be easier to avoid them. I also wouldn't mind the Sin Industries cleaned up, but not eradicated. They serve some peoples needs, so as long as they can opeate within whatever leagal restrictions at hand, let them go ahead.

Yes I agree. They should have their place but right now its everywhere in SL. Its like pizza places in your town. You can't turn a corner without spotting another pizza place.

will be even worse if you dont delete some of your private messages so i can send you one.

OOPS!

Why should I be concerned about people who are trying to make money out of nothing?

I, for one, welcome our new Corporate Overlords.

I disagree that sex will be so greatly impacted. Ageplay is a fringe behavior that is illegal in many jurisdictions. Cybersex, in general, is not. Phone sex, cybersex - these are legal activities. And the broadening expansion of the population only means that more people are going to do what comes naturally. I don't see any significant impact on the sex industry at all. In fact, I would expect the sex industry to thrive with the population explosion.

Gambling is different; but the means of running a casino can be adapted to fit the laws. Pay teleporters to access freeroll rooms, or poker rooms where virtual chips are awarded, and maybe exchanged for gift certificates for access... or maybe L itself. The bingo derivatives should be safe. But even then, same thing... pay to access the room, not to play each game per se.