Skill Gaming enforcement in play; CapEx suspends activities

Saturday, November 1st saw the Skill Gaming Policy from the Lab coming into full effect. Notice of the enforcement was given in a blog post issued by the Lab on Monday, September 29th, which in part read:

As our FAQs explained, applicants to the program who submitted their applications prior to the September 1 deadline have been permitted to continue their skill gaming activity while their applications are reviewed.

Beginning November 1, 2014, the enforcement of our Policy will apply to all Residents, including those with pending Skill Gaming applications that await Linden Lab review and approval. As of that date, any objects or regions found in violation of our Policy will be taken down. We strongly encourage all applicants to submit any outstanding materials for our review as soon as possible so that their applications may be processed before the deadline.

At that time, there had already been a delay in the introduction of the new policy (from August 1st through until September 1st) to allow additional time for applications and applications processing.

The end of October saw further additions to the list of Approved Participants, such that some 94 regions have been reclassified at Skill Gaming regions, each of them offering a mix of games from a pool of 56 games from five approved Skill Gaming Creators. Please refer to the Approved Participants list for an idea of the spread of actual Skill Gaming Operators.

However, the enforcement deadline has brought with it one casuality, although hopefully only temporarily.

Capital Exchange (CapEx) is a fictional stock market simulation game, and although it does not offer any opportunity for direct real-world investment or profit, it does operate on what amounts to a “pay to play basis” through the trading of L$-valued “securities” in the SL-based companies listed with the exchange. As such, it falls under the remit of the Skill Gaming Policy.

Capital Exchange’s application to become a Skill Gaming activity lodged with Linden Lab since just after the new policy was originally announced July 2014, including a reasoned legal opinion from their legal counsel outlining why CapEx is a game of skill under federal and New York State laws. However, at the time the deadline was reached, they had not received formal approval as a Skilled Gaming Operator from the Lab, which has forced CapEx to suspend market activities activity until further notice.

The suspension was announced via statement from CapEx’s CEO Skip Oceanlane published on the CapEx website and via in-world note card givers at the CapEx headquarters. This announcement reads in part:

On July 16, 2014, I filled out the first form for the Skill Gaming Application for Capital Exchange Stock Market Simulation Game. From that point until today, there have been numerous correspondences between me, my law firm, and Linden Lab. As of today we still do not have an official determination, positive or negative, on our application.

I was hoping that because much of the delay has been on the part of Linden Lab, that we would be allowed to operate past the November 1, 2014 deadline set forth in a recent post by Linden Lab. Unfortunately I was informed by Rowan Linden that we cannot. So therefore effective immediately, I am suspending all trading at Capital Exchange until our application is approved or denied by Linden Lab.

Capital Exchange has been hit - hopefully temporarily - by the November 1sr, 2014 enforcement of the new Skill Gaming Policy
Capital Exchange has been hit – hopefully temporarily – by the November 1st, 2014 enforcement of the new Skill Gaming Policy

As a result of this move, as the blog post goes on to state, all trading, including person-to-person transfers (unless they were authorised before the trading halt), payment of dividends is suspended, as is any other activity carried out through Capital Exchange which would violate the Lab’s Skill Gaming policy. However, all other aspects of CapEx, such as posting to the forums (including company news etc.), continues. The announcement also notes that CapEx ATMs will still be in operation for those wishing to deposit / withdraw L$, as the Lab has not indicated that doing so would be violating the new policy.

Please refer to the CapEx blog post for detailed information on the suspension and planned steps, and to the CapEx website for further updates on the situation.

It is not currently clear if other gaming operators within Second Life have been similarly hit by the deadline being reached prior to their application being approved or turned down. It is also not clear whether the deadline for enforcement was set as a result of external pressure to comply with legal requirements, or as a result of an arbitrary decision on the part of the Lab.

If it is the latter, it is hard to fathom why the Lab opted for a blanket enforcement of the policy, rather than allowing further dispensation for those operators / creators who have submitted applications, particularly where the delays in approval appears to lie with the Lab’s own handling of applications (as seems to be the case with CapEx).

Related Links

With thanks to Nalates Urriah for the pointer to the CapEx blog post.

12 thoughts on “Skill Gaming enforcement in play; CapEx suspends activities

  1. If Linden ‘s counsel can’t make a DECISION — not invent something or program something — since July (!) with the applicant’s lawyer answering questions along the way– that is shoddy.

    I don’t “play” this game but how many people will give up land, stop buying things or leave SL with delays like this.

    Wonder how much this is costing in fees to applicant – hopefully not wasted.

    It isn’t like San Francisco area doesn’t have at least six major law schools where LL could hire interns to help move things along.


  2. It’s really odd, watching the Wild West spirit of Second Life fade even more, as everything gets locked down, reviewed, restricted, relocated, and so on. I understand that this is becoming a real legal issue, but it’s not exactly like Second Life is the hot and happening online attraction any longer.

    And games like “No Devil?” I play the game occasionally, and I love it, but there’s really no way that game truly qualifies as a “game of skill” – unless predicting whether clicking a matching number or not clicking it based on intuition or whatever, is considered a “skill”. There are the wildcard tiles that come up randomly, but guessing which number to choose out of four isn’t really a “skill” either, is it? You can’t get better, necessarily at guessing. Unless you find patterns, of course.


  3. Inara,

    Skip Oceanlane’s decision to halt all trading at Capex is certainly related to Linden Lab’s “enforcement” blogpost. However, while I’d agree with Skip that it’d be silly to convert the Capex sim to a skill gaming region as long as LL hasn’t made a positive decision with regard to the Capex application, it may well be that LL would have allowed “business as usual” pending the application proces if indeed the sim had already been converted. I think the “enforcement” blogpost didn’t intend to negate the earlier stance from Linden Lab that applicants can continue to operate pending a decision on their application, but rather was aimed at actively shutting down gaming operations in non-skillgaming regions. We’ll see how that pans out.

    For my take on the Capex application, see my own blogpost from July 10, here:

    kind regards,


    1. “I think the “enforcement” blogpost didn’t intend to negate the earlier stance from Linden Lab that applicants can continue to operate pending a decision on their application,”

      It’s hard to see how the Lab intended the to be “business as usual” for those with applications pending, given this statement within the September 29th blog post:

      Beginning November 1, 2014, the enforcement of our Policy will apply to all Residents, including those with pending Skill Gaming applications that await Linden Lab review and approval.
      [My emphasis.]


      1. Inara,

        No worries, I can read, and have read the same text you did.
        To the letter of the text in the blogpost, you are right of course.
        Remember though, that the entire premise of LL’s policy changes was and is to appease those 10 states that don’t allow online skill gaming. I surmise that that is why the sentence you quoted is immediately followed by one saying that as from November 1 all objects/regions found in violation will be taken down.
        In that context it’s easy to see why LL wouldn’t be worried about stuff in skill gaming regions (since those can’t be accessed from those 10 states).

        kind regards,


        1. Well, I’m applying Occam’s Razor. Had the Lab intended to allow those with applications pending to continue beyond the deadline, they could have said so, and the fact that that can demonstrate they have the paperwork in-hand and are processing it, should amount to suitable “appeasement” (were any actually needed). As such, my belief is that the blog post should be taken exactly as it is worded, without additional supposition as to intent.


    1. The cancellation of Patterns is a bird of a different feather; it was a subjective choice by the Lab. The (albeit possibly long overdue) introduction of a Skill Gaming policy that acknowledges the requirements of US (and international?) law is something the Lab doesn’t necessarily have the ability to prevent without themselves ending-up in deep waters.

      However, what the cancellation of Patterns might do (depending on the size and vociferousness of the community involved in it, and the length of their memories) is come back and bite the Lab somewhat should they look to channels like Desura and Steam to try to encourage the gaming community to come and give their “next generation” virtual world platform a go in 12-18 months time (assuming it reaches a more open level of access in that time).


    1. Germany doesn’t abide by US laws, but it does have its own laws – and some of them relate to gambling and games of skill as well…

      Liked by 1 person

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