You may have seen the name ‘Gisland’ associated with 888 and Dragonfish. I mentioned it on Massively, about a year ago. Apparently, Gisland is a subdivision or subsidiary formed by 888 as a part of their payments processing arrangements for Second Life with Linden Lab.
The word doesn’t seem to mean a whole terrible lot, but you could read it as “G-Island”. If that “G” looks like it might stand for “Gambling”, well … actually that might be a really good guess, as it turns out.
The word is that – from sometime in 2008 – Linden Lab’s board has been considering relaxing the ban on gambling in Second Life, which was originally triggered in response to the then-pending UIGEA (Unlawful Internet Gambling Act). Many companies, including credit-card companies and Linden Lab itself, scrambled to meet compliance with the draft act with the expectation that it would pass into law.
The UIGEA actually, never quite did. One critical part of the legislation that would actually make Internet gambling … well unlawful has now been dead in committee for over a year with no sign of return. Nobody’s really relaxed all that much as that last piece of legislation that makes the Act function could re-emerge suddenly – so it has continued to have what is called a ‘chilling effect’ on Internet gambling operations to and through the USA, as well as any payments processing taking place in the USA that might relate to Internet gambling (or to anything that might be mistaken for it in bad lighting conditions).
With the possible spectre of the UIGEA still floating around, it wouldn’t be wise to just reverse the original ban. However, there are ways – partially or wholly – to evade most of that risk, and a European [Apparently 888 is an Israeli company - I'm not sure where I got the impression that it was European --Tat] Internet gambling business with a strong payments processing division is just the ticket.
Just 24 hours ago, did I believe that Linden Lab might be planning to relent on its gambling bans? No. I absolutely did not. However, I have now been convinced by persons who were involved in the steps towards that.
Multiple sources who were close to the deal with Linden Lab and 888 through the last two years confirmed that:
“Since 2009, the expectation in Linden Lab has been that the board will allow gambling again in 2011. The seeds of that expectation, apparently, began as early as sometime in 2008. When the board makes that decision, assuming a number of preconditions are met, there is the additional expectation that Gisland/888 will be the party to help Linden Lab make that come to pass. A key advantage of working with Gisland is their gambling business, and that was one (among several) key factors that tipped the choice towards them over a number of other competing possibilities. A significant part of the current strategy appears to be to assess how well Gisland/888 performs in other, more conventional areas before moving on towards the gambling area.”
Certainly the expectation that Linden Lab’s board will change its stance on its current gambling strictures seems to be strong among those in the know.
Thus the irony of Linden Lab teaming up with an online gambling firm is clarified. There’s a plan, and it explains the seeming-contradiction.
That’s no guarantee that – when push comes to shove – that Linden Lab will definitely make the choice to relax its strictures on gambling operations in Second Life next year. There are no absolute guarantees in any business – and having plans is not quite the same thing as bringing them successfully to fruition – but this appears to be the trajectory and a goal which the Lab has been aiming for since 2008.
Hang on to your hats, folks. 2011 looks like it’s going to be an interesting time.
Update: Linden Lab has asked me to add a statement from them to this story:
In 2007, we enacted a ban on gambling in Second Life to ensure our platform remained in compliance with applicable US laws. Those laws remain in place, and we will of course continue to follow all applicable state and federal laws.
Of course, nobody doubted that the Lab would comply with all of the applicable laws throughout. Which has nothing to do with whether the Lab intends to relent on the blanket gambling ban, and should not be mistaken for a denial.
| You may have seen the name ‘Gisland’ associated with 888 and Dragonfish. I mentioned it on Massively, about a year ago. Apparently, Gisland is a subdivision or subsidiary formed by 888 as a part of their payments processing arrangements for Second Life with Linden Lab.
The word doesn’t seem to mean a whole terrible lot, but you could read it as “G-Island”. If that “G” looks like it might stand for “Gambling”, well … actually that might be a really good guess, as it turns out.
The word is that – from sometime in 2008 – Linden Lab’s board has been considering relaxing the ban on gambling in Second Life, which was originally triggered in response to the then-pending UIGEA (Unlawful Internet Gambling Act). Many companies, including credit-card companies and Linden Lab itself, scrambled to meet compliance with the draft act with the expectation that it would pass into law.
The UIGEA actually, never quite did. One critical part of the legislation that would actually make Internet gambling … well unlawful has now been dead in committee for over a year with no sign of return. Nobody’s really relaxed all that much as that last piece of legislation that makes the Act function could re-emerge suddenly – so it has continued to have what is called a ‘chilling effect’ on Internet gambling operations to and through the USA, as well as any payments processing taking place in the USA that might relate to Internet gambling (or to anything that might be mistaken for it in bad lighting conditions).
With the possible spectre of the UIGEA still floating around, it wouldn’t be wise to just reverse the original ban. However, there are ways – partially or wholly – to evade most of that risk, and a European [Apparently 888 is an Israeli company - I'm not sure where I got the impression that it was European --Tat] Internet gambling business with a strong payments processing division is just the ticket.
Just 24 hours ago, did I believe that Linden Lab might be planning to relent on its gambling bans? No. I absolutely did not. However, I have now been convinced by persons who were involved in the steps towards that.
Multiple sources who were close to the deal with Linden Lab and 888 through the last two years confirmed that:
“Since 2009, the expectation in Linden Lab has been that the board will allow gambling again in 2011. The seeds of that expectation, apparently, began as early as sometime in 2008. When the board makes that decision, assuming a number of preconditions are met, there is the additional expectation that Gisland/888 will be the party to help Linden Lab make that come to pass. A key advantage of working with Gisland is their gambling business, and that was one (among several) key factors that tipped the choice towards them over a number of other competing possibilities. A significant part of the current strategy appears to be to assess how well Gisland/888 performs in other, more conventional areas before moving on towards the gambling area.”
Certainly the expectation that Linden Lab’s board will change its stance on its current gambling strictures seems to be strong among those in the know.
Thus the irony of Linden Lab teaming up with an online gambling firm is clarified. There’s a plan, and it explains the seeming-contradiction.
That’s no guarantee that – when push comes to shove – that Linden Lab will definitely make the choice to relax its strictures on gambling operations in Second Life next year. There are no absolute guarantees in any business – and having plans is not quite the same thing as bringing them successfully to fruition - but this appears to be the trajectory and a goal which the Lab has been aiming for since 2008.
Hang on to your hats, folks. 2011 looks like it’s going to be an interesting time.
Update: Linden Lab has asked me to add a statement from them to this story:
In 2007, we enacted a ban on gambling in Second Life to ensure our platform remained in compliance with applicable US laws. Those laws remain in place, and we will of course continue to follow all applicable state and federal laws.
Of course, nobody doubted that the Lab would comply with all of the applicable laws throughout. Which has nothing to do with whether the Lab intends to relent on the blanket gambling ban, and should not be mistaken for a denial. | |  | |
Tags: 888, Business, Dragonfish, European Union, Gambling, Gisland, Law, Linden Lab / Linden Research Inc, Second Life, Second Life Gambling Ban, UIGEA, USA, Virtual Environments and Virtual Worlds
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I wouldn’t be surprised if a general lifting never happens and what we get instead is sweetheart exceptions carved out for specific Linden Lab partners. While on some level this seems distasteful, it also seems far less likely to run into legal issues if it is tightly regulated and controlled.
FICasinos?
Not sure what you mean re: the UIGEA. It was in fact enacted in 2006 as part of the Safe Port Act, and (after rulemaking and a 2009 delay in implementation) went into full effect this past summer. True, it doesn’t ‘ban’ Internet gambling — it just bans being able to move the money through the US banking system. Kind of a distinction without a difference, though.
Now, this year, there’s a NEW bit of legislation being pushed through Congress (by Barney Frank and others): the Internet Gambling Regulation, Consumer Protection and Enforcement Act. This new bill would allow Internet gambling within a new licensed and regulated — and taxed — framework. That hasn’t gone anywhere since the House Finance Committee voted it out of committee over the summer, but there’s a lot of support for it, supposedly. I don’t know that the Senate has entertained a matching bill yet.
Perhaps THAT is what Linden and 888 are trying to get in front of, so as to be ready to take advantage of the opportunity if and when this new bill is enacted?
Meethinks they should roll back on every rule update since 2005 except adfarming. DX
@nexus:
That’s exactly what is planned. 888 does gambling in Europe. Linden Lab will get a creative partner to do the builds. Access will be restricted to where it’s legal. It’s not a full “lifting”. It’s Linden Lab getting into the gambling business.
So, that’s the other shoe dropping of the pair… the first one was the banning of existing devices with “devil” or “auto-play”, announced last week.
I.e., there will be “games of chance” in SL, but they will be operated exclusively by Gisland/888, and payments in and out will probably be directly with Gisland/888 as a third party, keeping SL’s fingerprints off the money stream. Plausible deniability: “We permit gambling, but we don’t operate it… talk to those guys, not us.”
One presumes the activity will be restricted to Adult-rated land, to minimize the number of minors exposed to it.
If the proposed legislation ever gets past the bible thumpers then the states where the servers are located will collect tax revenue. Which, of course, will mean California will want LL to move all their systems back to cali.
However separation of church and state will have to be made applicable to elected reps before that ever happens. Not to mention the organizations in Vegas and the ones that run casinos on reservations will have to be taken care of as well.
As for some thing where SL residents that live in some place where gambling is allowed can gamble? I can assure you that the way to look like you are from there when you are not will be common knowledge overnight. So the feds will still have something to say about it.
I have been predicting this for a while, as we (europeans) have online gambling adverts on TV regularly, it is a recognised business.
Giving to a single company the monopoly of gambling in SL wouldn’t be anywhere near as good to SL as a whole as withdrawing the prohibition for everyone, i don’t see a web gambling company fueling the economy as much as unrestricted cassinos did both with regular busyness exchanges and with philanthropy ( back when things were better, it wasn’t much of a challenge for someone to accumulate 1k+ L$ in a day just by visiting a few cassinos and playing with their money trees, “splooders”, freeplay slot machines etc)
@Tigro:
This is about Linden Lab making revenue, not some idealist decision.
That said, I think nexus hit the legal issues on the head. LL can’t just open gambling to everyone – that’d just be allowed unregulated gambling.
This is the only way I can see gambling coming back, 888.com processing the payments and Linden Lab not therefore facilitating the transactions, no American banking problems, it also mean no unlicensed go it alone casinos as we saw before.
[...] Lab developments. Her latest scoop is in relation to gambling, with her in-depth post alleging a return to gambling on the cards for 2011. Essentially a partnership with a gambling company is potentially under consideration by the Linden [...]
It might be technically true that this is not a general lifting of the ban, but canning Paypal payments IS about driving people to another payment method.
Oh, look what we just happen to have available now a payments and gambling partner.
How is that not general for new foreign customers or those who change their account details?
This sounds crazy.
Can Linden Lab provide a legally safe venue for gambling.
What does the association with a gambling company do to them.
Can Linden Lab afford to make a mistake on this?
bring it on… IF it means more lindens in the playground, more virtual toys to sell.
just can we finally please end all the “betterverse” crap. and call Linden what it is.
Cults love to own casinos…. Exploit the others guys sins…;)
Lotto anyone?
but knowing LL. all revenues wont go into the marketplace inworld, only into LL pocket. gaming as usual.
Updated with an unprompted comment from Linden Lab.
LL getting into gambling .. days after they slam Zyngo ..
Indeed. That is why I was more than a little sceptical at first.
The wording of their statement does indeed mean that they are planning something.
Israel?
The US has gone soft, no carpet bombing of countries that got WMDs, and on top of letting the settlements remain unfrozen they even allow US companies to host online cassinos for them….