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

       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.  

            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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