According to a recent Reuters article, neither the FBI nor creator Linden Labs are quite sure how to approach the legality of gambling within the virtual world of Second Life. Focusing entirely on user-supplied content, Second Life allows its members to create and build a variety objects via in-application 3D modeling tools. A scripting language provides advanced users the ability to "control object and avatar behavior, up to and including mini-games and other complex programs," the official site states.

Though participating in Second Life does not require a fee, US dollars can be exchanged for the community's virtual currency, known as Linden dollars, used to purchase land, items and services from other members. This exchange has led to some legally grey situations when combined with the ability to put money into the user-scripted programs, such as those emulating slot machines, which some believe may violate US anti-gambling policy. As of this writing, the official site boasts that the virtual community has over 5.2 million registered accounts, with $1.5 million US dollars spent in the last day.

"It's not always clear to us [Linden Labs] whether a 3-D simulation of a casino is the same thing as a casino, legally speaking, and it's not clear to the law enforcement authorities we have asked," explained Linden's vice president for business affairs Ginsu Yoon. "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." Yoon also let it slip that Linden has no way to monitor or prevent gambling in the virtual world.

Lawyer Sean Kane described the legal issues Linden could theoretically face. "What they [US lawmakers] did was go after the processors, and made it a crime to process payments that relate to online gambling sites. Linden could potentially be held as the same sort of processor." he claimed. "If you're buying money...and utilizing it for gambling purposes, Linden could have a much higher level of responsibility."