Why Virtual Gamblers Beat the Feds, the Developers, and the Law

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Virtual gambling never really went away

In the virtual world, bondage
enthusiasts
frequent the same nightclubs as conservative
Pakistanis
and Republican political
candidates

. Amidst this digital sea of acceptance, one thing is strictly
taboo: online gambling.
 

After the passage of the Unlawful Internet Gambling
Enforcement Act in late 2006, virtual worlds like Second
Life closed the books
on what had been a lucrative career for a few aspiring
online Trumps.
 

Or did they? As Pixels and Policy found out in a recent trip
to the virtual worlds of EVE Online,
Second Life, and Evony, illicit wagering
has found a way around the power of Congress and developers.

Casino Crackdowns
 

Despite his stand against online gambling in Second Life, Philip
Rosedale is a pioneer of virtual wagering. Once-upon-a-time, Rosedale sold a
virtual slot machine of his own creation to avatars
, sparking what became a
craze of casinos and gambling throughout the virtual world.  

Gambling in the virtual world is illegal for a number of
convoluted and ultimately unenforceable reasons, chief among which are the fact
that an avatar isn’t required to pay real-world taxes on their winnings.

Even
though avatars gamble with imaginary Linden Dollars, these are readily convertible into
world currencies through the Lindex. Thus one proud tradition died.
 

EVE Online suffered a similar fate, with the virtual casinos
whose advertisements once clogged chat channels now mostly the stuff of memory.
EVE’s
casinos made use of the world’s in-game web browser
and transparent money
transfer logs to build what one nostalgic player called “a slot haven in space.”

Most interesting is Evony, where gambling is carefully
couched in euphemism and guarded
by a litigious legal department
prepared to pounce on anyone who disturbs
the balance. In Evony’s roulette system, players purchase “amulets” which are
gambled on a “Fortune Wheel” for in-game items. More on this brilliant system
below.
 


Virtual Speakeasies
 

As soon as the doors shut on Linden Lab’s sanctioned
casinos, virtual hideaways sprang up. How could new casinos grow without Linden
Lab’s team noticing? They used a clever loophole. Avatars
used Linden Dollars to purchase Z-Bucks
, are then wagered on the same slot machines
as before.
 

The trick is simple: In order to convert Z-Bucks into Linden
Dollars, avatars must successfully complete a “skill game.” We say “skill game”
because the actual challenges are so ridiculously simple that they require only
basic cognition to accomplish.

To date, Linden Lab has taken no steps against
the growing dominance of Z-Bucks casinos.
 

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            One step divorced from roulette?

This is the same principle Evony uses. Though amulets can
be purchased for “Evony Cents,”
which in turn can be purchased for real
currency, the items won have no actual cash value. They bind to the player’s
account. Different means, same end.

The only one left out is EVE Online, which has struggled to
develop casinos by any other name. EVE currency is both accessible for real
dollars (though purchases are discouraged) and the items won have a cash value. 

In light of the ban on “games of chance” created by
Congress, EVE made use of their in-game browser to develop “games
of skill,” including Texas Hold’Em and Blackjack
. How well this holds up
remains to be seen given the persecution of online poker services, but online gaming
still survives in EVE if you know whom to ask. 

In the end, the combined efforts of game developers,
Congress, and the FBI failed to stem the tide of virtual gambling. Instead of
eliminating gaming from virtual worlds, punitive legislation and overzealous
developers simply led to its evolution. 

Gambling is no longer called gambling in Second Life or EVE,
but if you know where to look, there’s a table waiting.

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