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Virtual FBI jackboots to march into Sadville?

FBI probing virtual gambling in virtual world

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House of Cards Virtual regulation of the avatar community from the DOJ could be on the way, as Linden Labs has invited the FBI to probe gambling in Linden Dollars on the popular avatar playspace, legitimizing concerns expressed on Sadville blogs after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) last year.

According to a Reuters report the FBI is investigating the legality of the virtual casinos that have proven to be some of the most popular destinations in avatar land - maybe because the rest of Sadville is so boring.

The explosion of virtual currencies has raised law enforcement concerns around the world, primarily due to money laundering and the other criminal possibilities presented, but to a lesser extent over ideological issues of economic control. Linden Dollars currently trade at 264 to 1 with old-fashioned greenbacks.

"We have invited the FBI several times to take a look around in Second Life and raise any concerns they would like, and we know of at least one instance that federal agents did look around in a virtual casino," said Ginsu Yoon, formerly Linden Lab's general counsel and the current VP for business affairs.

Linden Labs could find itself in violation of a host of federal laws that cover interstate gambling and currency transactions, including such DOJ favorites as the Wire Act, the Illegal Gambling Business Act, the UIGEA, and possibly even the Racketeer Influenced Corrupt Organizations (RICO) Act.

The federal anti-gambling statutes only require that there be an element of chance and that something of value be wagered. A convertible virtual currency like the Linden Dollar seems to qualify. And what's really the difference between a Sadville casino and an online casino like Bodog.com? Both exist only online, and both trade funds as electronic data packets. Why is one a problem and not the other?

Could virtual prosecutions be next? Or virtual FBI agents kicking down virtual doors? The mind spins.

This game might actually get exciting. We'll keep you posted. ®

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