The company behind Second Life, Linden Lab, has banned gambling from its virtual world. In a blog post about the subject, Linden Lab claims that the decision has been made on the basis that there are conflicting laws worldwide about gambling and wagers, and that an outright ban is the safest way to combat the problem.

Linden Lab says that "It is a violation of … policy to wager in games in the Second Life (R) environment operated on Linden Lab servers if such games rely on chance or random number generation to determine a winner OR rely on the outcome of real-life organized sporting events, AND provide a payout in Linden Dollars OR any real-world currency or thing of value." This presumably means that betting on games of skill is permissible, although Linden Lab includes blackjack, poker and baccarat in their list of banned gambling games.

Many Second Life residents object to the policy, arguing that the ban is overly heavy-handed and will restrict their freedom to an unacceptable degree. There are a few virtual casino owners in Second Life who make considerable returns from providing opportunities for gambling. Others have argued that it will significantly reduce Linden Lab's own profits.

One Second Life casino owner complained that this was an unacceptable way for Linden Lab to do business, because he has invested a large amount of time and money (about $3,800 and countless hours) in his casino business.

Some Second Life residents have supported the decision, however, saying that this is a sign that Linden Lab is "growing up" and starting to take proper responsibility. Many have been cheated by dishonest casino owners.