Second Life High Roller Gam(bl)ing – part 2

by Alphaville Herald on 23/09/09 at 10:48 pm

Linden Lab earning millions on virtual gambling – all over again?

by Father Jones, investigative reporter

Has Linden Lab really moved beyond the gambling businesses – a major part Second Life economy before the 2007 gambling ban? With Zyngo parlors publishing odds for auto-play games it is hard to believe online gambling has been replaced by games of skill. A look at the history of gambling in Second Life shows how the Lab has benefited – perhaps accidentally – from lax enforcement of real life gambling laws. In part two of the Herald's gam(bl)ing series, we look at how the metaverse arrived at this wonderfully ambiguous situation

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Blueline Gaming's weekly "contest": L$500000 ($1747 USD) paid to top 5 scorers

Linden Lab CEO Mark Kingdon’s shining vision for the future of virtual worlds – and Second Life in particular – is that of a virtual home for people all over the world, spanning entertainment, to business, to real life company conferences and marketing – all tied together with exciting new immersive media. But the recent past and present are at odds with this wholesome vision, as some believe a lax approach to intellectual property rights, cybersex, and gambling fuel demand for the Linden’s virtual land and in-world L$ currency. Is the Lab turning a blind eye to high stakes gambling to help grow their bottom line?

The history of online gambling in  Second Life

Linden Lab itself introduced gambling into its world by creating the first open source scripts for simple slot machines. It did not take long for Second Life residents to make their own slot machines and the first low roller casinos popped up. In the beginning it all looked pretty innocent. Playing on a slot for  L$ 1 a game to win up to L$ 30 (about $0.10 USD) was more a matter of having fun and role playing than it was a matter of making money and cashing out to a real life bank account. But things changed between 2005 and 2007.  

The million dollar mistake…

Driven by player demand, online casinos became popular in Second Life despite the murky legality of these games. Linden Lab’s headquarters are located in San Francisco, California, where gambling is strictly regulated by law, and many players reside in counties with tight regulation of gambling.

But with Philip Linden proclaiming, "I'm not building a game; I'm building a country" the illusion that Second Life was a world somehow beyond real life laws grew, and residents of Second Life flocked to casinos, bought L$s, and tested their luck. More and more casinos appeared as resident entreprenuers and scripters started to earn a serious money on the production of casino games – and the virtual gam(bl)ing industry in Second Life came to life. It is estimated that in the two years between 2005 and late 2007, Linden Lab indirectly earned millions of USD from the in-world gambling industry for land fees, currency exchange, and advertising.

This all changed when the Unlawful Internet Gambling Enforcement Act of 2006 targeted financial institutions transacting in online wagers and proceeds. Although though this law has been challenged, it was upheld earlier this month – an action that places the high stakes gam(bl)ing parlors of Second Life in  peril, assuming some sort of enforcement action is in the cards.

In late 2007, when the UIGEA law took effect, Linden Lab implemented a ‘gambling ban’ in-world under pressure from financial institutions. As a result, almost all virtual casinos closed, many virtual islands  rented land from LL for huge casinos disappeared, and residents stopped buying Linden Dollars for gambling. Linden Lab's Second Life players endured a drop of a total several million USD in the in-world economy from this action – a loss that can be seen in the Linden Lab website’s financial reports. It took a year for the Second Life economy to recover from the gambling ban: 


Linden Lab (November 12, 2008): “By breaking $100M for the first time since Q2 2007, the Second Life economy has now fully recovered from the restriction placed on games of chance in Second Life in mid-2007.”

…caused by an unregulated gam(bl)ingindustry

The gambling ban did not just occur just because of some smart worker at a financial company noticed what was going on in Second Life. The ban was helped along by complaints from Second Life residents who had been scammed by other residents with dubious casinos and manipulated games.

Smart scripters earned hundreds of thousands of USD making games that were programmed to scam people. In the real world, those kind of problems are solved by regulations and inspections, but in Second Life there were no regulations at all. Without regulation, some casino owners and game makers started to compete by underhanded means. Dirty tricks were used such as creating new games, selling them to the competition, then emptying the owners’ account by using hidden communications with the game to always ‘win’.

Linden Lab should have been aware that these scams were getting out of hand – they received hundreds of abuse reports. But they only took care of individual reports and avoided any sort of regulations to give this gam(bl)ing industry a bit more transparency before the UIGEA. The impact of the gambling ban implemented Q3 of 2007 is clear. Compared to Q1 and Q2 of 2007, the gambling ban caused a total drop of 102 million USD in resident-to-resident transactions. This suggests as much as 20 million USD were wagered every month in this unregulated gaming industry.

[... to be continued in part 3...]

4 Responses to “Second Life High Roller Gam(bl)ing – part 2”

  1. robin hood

    Nov 26th, 2009

    there are highly illegaly places with gambling in SL. this Game-Club-Neptune transfering illegal money into SL to wash it.
    theyre using kids in china in farms to play online games. and involved in illegal sports bets.i never would go playing there.
    i aslo owned a gaming place in past,i had none chance cause of this china-mafia-guys.

  2. shane11

    Nov 27th, 2009

    oh,thats interesting. i owned a zyngo place too. and had same probs and harrasments.this china guys attacked my sims and brought my biz down.
    i had to give up, its this kit Myoo from game club neptune.
    other owners told me the same. they wanna conquer the whole sl market and doing millions of L$ with theyre faked features.
    now they doing a illegaly lotto,all random and chance on rely.
    i will report it. its not fair. this mafia went too big.

  3. Father Jones

    Jan 12th, 2011

    Linden Lab keeps binding in on this gambling machine. The creator of the slotmachine sent out this message:

    “Due to a policy change at Linden Lab, several game features have been disallowed. Two of those game features can be found in Zyngo, auto-play and the manner in which the Devil takes scores. The Linden Governance Team was kind enough to discuss the issues with the game developers and in compliance with the new rules, the following changes have been made to Zyngo starting with Version 7.

    [At the moment, the games are marked version 6.94 and are available for play. The change will soon apply to all Zyngo games in SL.]

    1) Auto-play is disabled for all Zyngo games that involve a wager.
    2) A square highlight feature has been added that shows available plays. This is disabled for any games involving a wager.
    3) The devil no longer removes points from your existing score.
    4) There is a small increase in the number of devils, but they only change the scores for the current round. You can advance to the next round if you find the devil penalty contrary to your current strategy for a high score. The first time the devil appears, scores are 1/2 for that round. The next time he appears, scores are 1/3, then 1/4, and so on.
    5) There is a slight increase in the chance for blue and green jokers.
    6) If you mark off a number on the board, that number will no longer be selected. This reduces the number of ineffective rounds.
    7) Because of those other changes which help the players, the number of rounds has been reduced to 18.

    You should be able to spot the latest versions of the games because the last round will typically be stopped at 18, not 20.

    I wish you all the best with your game playing!


    And it is not over yet. In our next steps, Zyngo will only be allowed to exist as a freeplay device.

  4. The inquirer

    Jul 16th, 2014

    I’ve conducted extensive research on these so called wagering “games” in sl and can conclude, they display signs of rigging. No Devil, Zyngo et al all operate via an external RNG/Database. Which, neither the RNG or games are audited for game fairness.

    In the last 8 months (since December 2013), these games, spread across mutliple gaming sims have become exceedingly dodgy. It’s not uncommon these days to have 6 or more consectitive rounds which not only do not give any matching numbers but give back to back identical numbers already drawn.

    The probibility of this ocuring is extremely high. But to have it repeatidly happen on game after game, is another sure sign these game outcomes are being manipulated.

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