SLBA ToS and Skill Gaming presentation (2): Skill Gaming

July 2014 ToS Update Introduction

This is a transcript of the presentation given by Agenda Faromet at the August 2nd 2014 SL Bar Association presentation on the July 2014 Linden Lab Terms of Service Section 2.3 revisions and on the changes to the Second Life Skill Gaming policy.

If you have come to this page first, please read the introductory notes for details on the presentation and its purpose, and the format of the audio recording.

This section of the transcript is focused on the changes to the Second Life Skill Gaming policy, and includes both the presentation and the main questions and answer session which accompanied it.

Again, as per the introductory notes, please note:

  • The audio has been edited to remove pauses. repetition or asides, in order to better match the text transcript and allow those who wish to listen as they read
  • There has been no intentional altering of anything said during the presentation and Q&A session, nor has the context of the presentation or answers been altered in any way, other than questions asked in text being the placed within the transcript at the point where they are answered (when compared to chat logs of the event), again for better context
  • Only those questions asked in text which were directly addressed by Agenda have been included in the transcript in order to maintain context with the audio recordings.

Skill Gaming Policy


00:00: Let’s talk about the Skill Gaming policy. So first, I’m going to talk about some stuff that most of you already know; but because this is a point of confusion for a lot of people, let’s talk about what the difference is between gambling and gaming, at least as Linden Lab sees it, and as a lot of state laws see it.

00:19: So, gambling is betting, wagering something of value, money, on a contest, sporting event, game of chance. So it’s regulated by state law, for the most part; there’s a couple of Federal laws, but for the most part, we’re looking at state law.

0036: Gaming is playing skilled games that require skill or a player’s control of the game, and some states permit betting, wagering on skill-based games, other states do not. There’s a whole list of states that do not. And even within that, there’s a whole list of different hierarchies of what kinds of skilled-based games might be allowed and what kinds might not be allowed. Some states allow social betting, some states don’t allow social betting; some states allow betting if it’s regulated by the state, and no betting if it’s not regulated by the state. And some states define their games differently; in some states poker is a game of skill, in some states poker is a game of chance. [It’s] completely up to the state.

01:30: So really, we can sit here all day and argue over things like whether poker is a game of skill or not; we can debate it.

01:40: What’s illegal gambling-wise? It depends, because gambling is regulated by state law. So a game operator is not allowed to take money in any form, this includes Linden Dollars, for participation in unlawful Internet gambling.

02:01: So this means that if you are a game operator, it’s your job to know the laws of the state the player is in. It’s not the player’s job to tell you, “oh, it’s illegal for me to be here.” It’s your job; the burden is on you.

02:17: This is why Linden Lab is making these changes. This is why all of this is now coming down on you. I don’t know why it’s coming down now, because really, it came down in 2007, when Linden Lab made its blanket “all games must be skill-based games” policy. It’s just taken seven years for Linden Lab to implement it correctly.

02:46: But this is what it is. so, gaming laws differ from state to state, as I said. So betting on, or operating, games of chance is not legal in Second Life. Slot machine, roulette, etc. Sploders, I’ve seen people ask about sploders. Your typical implementation of a sploder where everybody pays an amount in, the clock ticks down, the sploder goes boom, and everybody who paid in gets a random amount back, that is a game of chance.

03:20: So what is legal? It depends. It is legal to take money for participation in games of skill, as long as players can legally participate in their state. So some states have held that an entrance fee is not a bet. So if you’re paying to play a game, to participate in a contest, even if there’s a prize at the end, that’s OK; that’s not even a bet.

03:49: It just depends on how that system is set-up. So if you’re paying to participate in a contest, and there’s a car as a prize, that may just be a sweepstake, and sweepstakes have their own regulations [and] that may be perfectly legal, as long as you follow those regulations.

04:10: So as we know, betting on and operating games of skill, if you do it according to the policy, is permitted in Second Life. So let’s talk about the policy.


04:22: So the games that are affected by the policy. All games in Second Life, if they cost Linden dollars to play, and they have a pay-out in Linden dollars, are affected by the policy. So who is affected? Anyone who wants to create or operate skill games in Second Life. People that just want to play, are not affected by the policy. The policy does not talk about players. That’s Linden Lab’s job. And so I saw somebody ask a moment ago, how you know where your players are, that’s Linden Lab’s job. Linden Lab will block people from your regions by IP address if their IP address comes from a state that is not allowed. That doesn’t always work, because we know that geo-location is hit and miss, but that’s what they’re doing.

Comment: The gaming Sims address that on LL’s end and allow entry.

05:19: Absolutely right, yeah. It may be by their billing info, it may be by their IP address, Linden Lab has implemented their system, and all hail the mighty system, because my God, they’re certainly not going to get anything wrong!

05:35: So, how you comply with the policy? You fill out an application, you get an opinion letter from an attorney, and you sign an affidavit. And that has its own complications and problems, and I’m sure I’ll get question about that!

05:50: So gachas, breedables, stuff like that? They’re not gambling. I’ve answered so many questions about that. Not affected by the policy because they don’t have a pay-out in Linden dollars. If it doesn’t have a pay-out in Linden dollars, not gambling.

06:07: It doesn’t matter what the risk versus reward is, it doesn’t matter that you can sell your rare breedables for a gazillion dollars; they’re not [gambling].

06:19: Stock exchange: not gambling. Contest boards … depends on how they’re set-up, but if it costs Linden dollars to play, and it has a pay-out in Linden dollars, it’s gambling. If it doesn’t, not gambling.

06:35: So old games. If I’ve had my beloved Greedy machine for five years and it doesn’t pay out, but it has the ability to pay out, but I’ve got that turned off – if it could pay-out in Linden dollars, it’s affected by the policy. I’m sure that a lot of the gaming providers are going to be offering non-payout versions. I can’t speak for them, because I’m not them, but I’m sure that there’s going to be a big market in non-payout, non-officially gambling versions of games, and there should be a market in that real soon now.

[Note: Kirsten Rutledge has already stated that all KR Engineering games with pay-to-pay / pay-out capabilities will be updated to make them free to play and with the pay-out option removed.]

07:17: So, I’m opening myself up, but I cannot give legal advice. If you have specific questions about specific situations or X, Y and Z is happening to me, and I don’t know what to do, I can’t answer those questions. At least not right now. We can talk off-line or after the event. But I can give general answers to questions about what – well, I’ll tell you if I can answer the questions. So, fire away! Let me scroll back and see what’s been asked already.

Question: Dutch law pretty much prohibits any online gambling that’s not provided by state services so when a game operator has Dutch players he’s illegal?

07:52: Yeah, OK. so if you live in a country that prohibits on-line gambling, I’m sure Linden Lab will add that to the list. They’re compiling the lists of states and countries that do not permit on-line gambling.

Question: Contest boards? Are they considered as games by this policy?

08:06: No. So the difference is, it’s where the prize money is coming from. If the prize money is coming from the people who are playing the game, so think about a sploder. when you’re playing a sploder, each person puts in the money, and then when the game goes off, everybody who put the money in wins some of it. That’s a game of chance, and that would be betting.

08:33: Prize money comes from an external source. So it comes from the person offering the prize [who] doesn’t have a chance to win it. It comes from the organisation that is running the game. So they don’t have a chance to win it, they are obliged to pay it to the person that wins. And so that’s somebody running a contest; and then maybe there are entrance fees to play the contest, but that’s kind-of the difference between gambling, where everybody [is] paying into the pot they could potentially win, or a prize money which is put up by someone else. Does that make more sense?

Agenda Faromet discussing the Skill Gaming policy updates, August 2nd, 2014
Agenda Faromet discussing the Skill Gaming policy updates, August 2nd, 2014

Question: Isn’t a sploder a bit like a lottery?

09:16: No, a sploder is not like a lottery. A sploder is like a coin operated game. It’s a game of chance.

Question: so sponsorship is allowed?

09:24: I can’t tell you if sponsorship is allowed, that’s much more of a blanket question; it would have to be how something was set-up.

Question: If games have no method of payout (ex: No permissions) I’m assuming it isn’t effected? Pay to play. but no way to win anything back. are they effected?

09:33: Pay-to-play but no way to win anything back. Sounds like that would probably be OK. I’m not sure what people would get out of it, but that sounds like it would, yeah. I can’t tell you that yes, that would certainly be OK, but under the way the policy is currently written, that sounds all right.

Question: From my understanding, the wire act and case-law involving it would consider any money paid into something where by the amount that can be paid out increases by the number of players would be considered a BET rather than an entrance fee?

09:55: It looks like my comment about entrance fees and bets has confused a lot of people. Let me back up. A couple of states have had that discussion. This is something that would have to be a state-by-state evaluation. don’t let that throw you off, and maybe I shouldn’t even have mentioned it. What you have to look at is not whether a state has made that determination, you’ve got to look at Linden Lab’s policy.

10:25: Linden Lab right now is your state. The Linden Lab policy is all that matters, and if Linden Lab makes a determination about entrance fees and whatnot, that’s what matters more than Arizona state law

10:38: So back up a little bit about the entrance fee question. You law, as far as your concerned, is the Skill Gaming policy. So I would not suggest trying to create a system of entrance fees and prize monies and things like that, because that opens-up complications of having to comply with sweepstakes law and contest law and that gets really super difficult. I’m sorry if I confused people, I was just making the example.

Question: So if someone in your sim has a game that “could” have a payout, and your ISP is in a state that prohibits this, you could be banned from your own home? Is that what you are saying?

11:15: No. If someone in your sim has a game that could have a pay-out, that game no longer belongs in that sim. Those games now belong in special gaming Sims. All skill-based games are now going to be basically relegated to skill-based gaming Sims. So they wouldn’t be able to have that game on your sim, unless you live in a skill-based gaming sim.

Question: What about free play and pay out games on older games that have to pay $1 to get the game to start, with no loophole for a pay in. For use for traffic usage?

11:47: I’m not sure what that question is. If it is a game that costs linden dollars to play, and has a pay-out, then it applies, then the gaming policy applies. It doesn’t matter how old the game is.

Question: What if they have a method of pay-in and pay-out that is totally outside SL? Like Bitcoin or similar?

12:01: If it has a method of pay-in and pay-out that is totally outside Second Life, yeah I think that probably Second Life would probably end-up banning those. I’m not sure, but that sounds like using a loophole and those will probably end-up getting banned.

Comment: Some people will use those games to connect them to another device that pays out L$.

12:21: Again, that’s an exploit and they’ll crack down on exploits.

Question: I know it’s a goofy question, but for the market that is opening up, it’s possible that some people would want to have a pay to play for entertainment, or let’s say micro-transaction style payments.

12:27: you’ll have to give me more information.

People were already arriving for the presentation well in advance of the start time
People were already arriving for the presentation well in advance of the start time

Comment: Games that are set to not take money in.. but can pay-out.

12:29: Oh, OK, yeah, like Facebook games? Like no pay-out? Yeah, I think that would be fine.

Comment: Some games are scripted to pay to start the game but it is immediately refunded.

Comment: its cost one Linden but it refunds the one Linden as soon as the game starts. Free play games is what she was asking …

12:37: I think the gaming policy specifically excludes things like that.

Question: How is it restricted who can play games?

12:43: It is restricted by all of these games [being] on special regions, and only people who are located in areas where this kind of gambling is legal will be allowed on those regions.

[Update, August 10th, 2014: since publication, the lawyer referred to below, Monday Beam, has reached-out to me via a comment on the main page and posted a comment in response to this section of the discussion. I refer readers of this transcript to his comment for further information.]

Question: there is a lawyer offering legal opinions for a fee of L$ but will not provide his RL name unless you pay him his RL fees (which are much higher), or pay L$ to get his name. do you have any opinion comment on that practice?

13:00: Yeah, I have opinions about that practice; I’m not sure they are things that I can say in a professional setting …

13:08: If you’re going to be hiring an attorney, you need to know who they are, you need to be able to look-up their credentials. you need to be able to look-up whether or not they’ve got any Bar actions against them. You need to know who you’re hiring.

13:27: I’m a privacy attorney; that’s what I do, so I get privacy.

Comment: I think there are people here that have hired that attorney and have not had a problem yet.

Yep, there may be people who have not had a problem yet, he may be a fantastic attorney. He may be awesome. But what he’s doing is [as] shady as hell, and he is withholding his credentials; he’s withholding your ability to verify who he is, what he’s done, whether or not he is competent, until you pay him.

Comment: You need to know who the real human being is behind the avatar and whether that person is a licensed attorney.

13:59: Yes. you don’t even know whether or not he is licensed and in good standing. More importantly to me, is he’s purporting to give an opinion on … let’s say you live in California, he’s got to be able to give an opinion to a California resident on California state law. an attorney can’t give a legal opinion on state law un less he is licensed to practice in that state.

14:34: I wouldn’t be able to give an opinion on Maryland state law. Tim would; Tim’s licensed to practice in Maryland. But I wouldn’t. I can give you all kinds of opinion on California state law or on Federal law but, as I have established, gambling law and gaming law as mostly state law issues.

Question: Doesn’t LL verify the attorneys?

Text reply: LL itself does not. SLBA has a verification service which attorneys can use at some cost.

14:58: Yeah. SLBA have a verification service.

Question: So does that mean we need a reasoned legal opinion [RLO] from each of the states? how is it possible to get a RLO for a game when there are variations in state laws?

15:02: No, you don’t need a reasoned legal opinion from each of the states; you need a reasoned legal opinion for the state that you’re in, because you need a reasoned legal opinion that your practices don’t violate your state law.

Question: Agenda, you mentioned prior about LL will be researching also countries not permitting gambling. Any idea how long this will be before a list actually comes to the website? So many won’t be able to access any Skilled Gaming Region. Also, any luck some of those states will change and allow it?

15:18: I couldn’t begin to tell you how long before Linden Lab gets its stuff together; and that leads me to one of the problems that’s currently going on, and this is that this application that Linden Lab requires [itself] requires that potential operators list certain things on their application that Linden Lab hasn’t been able to provide yet.

15:45: I don’t know if you’ve all been aware, but the deadline for submitting these applications was supposed to be August 1st, it just got pushed back to September 1st, mostly because Linden Lab hasn’t been able to provide things like a list of permitted games, or a list of regions or the things that Linden Lab is supposed to provide to all of its potential game operators and game creators. So right now there’s a little bit of chaos going on. I don’t even know if they’re going to make the September 1st deadline. We’ll see.

16:22: As far as any luck that states will change to allow it: you got me. I can’t speak to individual states, but there have been efforts in Congress to loosen restrictions on Internet gaming for seven years; so your guess is as good as mine.

Comment: Real attorney fees here won’t be an ethical practice cause linden labs TOS and procedures are not clear , and we will need to change more than once some LL requirements.

16:45: That’s not true. Several of us practice in-world. I practice in-world; I have several in-world clients. I haven’t started writing reasoned legal opinion letters; I know a couple of people have approached me about them. but I do have clients in-world and out of world.

17:07: You can have attorneys in Second Life. I mean obviously, we’re a whole bunch of them. It’s not something that the Terms of Service prohibits.

Question: To clarify, for the purposes of the RLO should you hire an attorney who is licensed to practice in your Jurisdiction?

17:19: That’s correct. For the purposes of the RLO you really should hired an attorney who is licensed to practice in your state or country or jurisdiction.

Question: I thought that all games that we have now are “skill based” in one way or another?

17:27: Yes, that’s correct. All games that we currently have should be skills-based in one way or another; that doesn’t mean that they are. It means that they should be. And Linden Lab has had that policy since 2007.

Question: when it comes to operators who take in customers from each state… how does that work .. will operators need a RLO for each of the legal areas for what’s allowed and not allowed?

17:42: When it comes to operators that take-in customers from each state, no, operators do not need a reasoned legal opinion for each of the legal areas, they need an opinion for their games.

Agenda Faromet (via profile)
Agenda Faromet (via profile)

17:56: So if you’ve got a game, and you’re operating your games, you need a reasoned legal opinion for the games that you’re operating. The players are Linden Lab’s responsibility. Linden Lab is screening those players; and that’s the purpose of the Skill Gaming regions. That’s the whole reason they’ve implemented this system that everybody has to move to the Skill Gaming regions [Note that existing regions can be converted to Skill Gaming regions, there is no need to physically relocate if you already hold a region for gaming purposes, you can apply to have it converted. Revised tier still applies, obviously], and you have to pay this extra fee and all of this stuff, and that’s to pay for Linden Lab’s extra overhead to screen the players and making sure that only players from states and countries that allow skill based gaming can come and play.

Comment: If you are from Europe It is rather difficult to hire an attorney who is licensed both in your country and the USA.

18:42: You don’t need an attorney that is licensed in the USA. You need an attorney who can write a letter that says what you are doing is permitted in your country.

18:55 Question (voice): You said the state controls gaming policies and gambling and on-line gambling and so forth; and nothing was done by Linden Lab for seven years. Does that mean the Federal government is involved at all in pushing Linden Lab to do something?

19:11: No, I don’t believe that the Federal government is pushing Linden Lab to do anything. This is a part of an ongoing effort from Linden Lab to clean-up all kinds of areas of its activity. If you look, there’s a bunch of efforts that Linden Lab is going through to clean-up gambling and underage sexual activity and money transactions; you have all of the stuff that it did with third-party financial transactions last year. and all of that was, and still is, setting the stage for this next generation of Second Life.. It’s really just Second Life is cleaning-up as much as it can to try to move itself into the future and to try to try to bring itself into line with Federal regulations.

20:04: What it did in 2007 was implement a policy saying games of chance and gambling are banned, but games of skill are permitted. and that was fine; that was a good effort.

20:19: What it’s doing now is the next generation of that, and saying, all right, we still have games of skill, but we’re going to make a better effort to tighten the regulations on it and make sure those games of skill are only accessible by people in regions [of the world] where it’s legal, and those games of skill are not cheating anyone and there’s more transparency involved, and you have to go through some form of approval process to have one of these games of skill and to run one of these games of skill, so you don’t have shady operators just stealing people’s money, and so on and so forth.

21:02: Question Voice: Just one other question I’m sure people are interested in. Recently they just posted that they’re going to create secondary accounts for all of us, and that’s a way of monitoring everything that we do. Is there any constitutional rights being violated here, with their wanting to know every single thing we make, every time we pay someone. This secondary account is creating a lot of headaches for people.

21:28: I have not heard about the secondary account. Is that going to be your owner?

From the Skill Gaming FAQ: Should I designate existing Second Life accounts as my proposed Creator and Operator Accounts? Alternatively, should I create new Second Life accounts to serve as my proposed Creator and Operator Accounts?

  1. Upon approval of each Creator or Operator application, Linden Lab will create new accounts with the proposed Creator and Operator Account names submitted by the approved applicant through the Skill Gaming Program application process. Each new Creator and Operator Account will be assigned an [SLSGC] or [SLSGO] surname, as applicable.

2139: Commentator (voice): Right, the owner of the games, and so forth. so games aren’t transferrable; there are lots of things screwed-up by this process … It’s going to be linked to our main accounts, I guess. It’s creating a headache for everyone; I didn’t know if you knew about it.

Comment: After we are approved, they will create new accounts for us to use. I would not call them “secondary” or “linked”.

21:58: No, I had not heard about that. That’s new to me. I don’t know what kind of oversight Linden Lab is going to have about that. It’s not a matter of constitutional issues; you may have some privacy issues. But given that the Terms of Service is getting your consent, and you are applying for one of these accounts, you’re waiving a lot of those privacy rights you might have. so I, really, no. There may be a couple of issues, but I would have to know exactly what is going on with linden Lab and those accounts.

22:38: I think really, what is going to go on is that those accounts will be used strictly for money transactions, and Linden Lab will monitor them to ensure that they aren’t being used for fraudulent money transactions.

Question: Does it not seem unnecessary to have every operator to get a RLO for every game? We are talking about thousands of duplicated RLOs from the same states in many cases, and one RLO cost a minimum of 100 dollars. We are talking 100s of thousands of dollars, and there are 20 operators in that same state, we all have to pay for one each.

22:54: So I know that people are still concerned about the reasoned legal opinion. So let me try to clarify.

23:04: The reasoned Legal opinion. let me clarify what that is. The legal opinion is giving an opinion about the games that you are operating or creating. It’s not giving an opinion about the people playing the games. So it’s giving an opinion about whether or not games that you are operating or creating are legal in your state.

23:33: If you’re operating or creating them in fourteen different states, yeah, you might need fourteen different legal opinions. But you’re probably not; you’re probably living in one state, and you probably need one reasoned legal opinion.

Question: I’m a creator. The reason I’m worried is that the RLO comes from the lawyer I hire. which would only be legal in my state of PA. if my lawyer doesn’t practice in their state. Does that mean the operator needs access to my game?

23:48: The attorney needs to understand and be able to speak to the gaming laws in your state, because he or she needs to know whether or not what you’re doing is legal in your state.

24:03: If you’re hiring someone who doesn’t understand how your game works, and how your laws work, that may be a problem. You can sit down with an attorney and explain how your game works; they don’t need to know the code, they don’t need to look at the code, because they probably can’t read LSL. But they do need to know how the state’s gaming laws work, and whether or not what you’re doing complies with them.

Comment from SLBA member Ellen S Ross: The law school I attended, Albany Law School in Albany, NY, just set up a Racing and Gaming Law programme. I have not asked anyone there, but that might be a potential source of RLOs.

24:32: Oh, thank you, Ellen, that’s great. That’s fantastic.

Question: Is it legal for them to take $100USD from us for application fee when they haven’t yet to divulge to us what the quarterly license fees will be. What’s to stop them from approving us then saying …. btw the quarterly license fee will be 90% of your profit or even $1000USD every 3 months later on?

24:35: So yes, they’re talking about quarterly fees, and I have seen that; that is problematic. I don’t like the fact they’re not disclosing the amount of quarterly fees they’re going to be charging. That bothers me too. That they can have you sign-up for a contract and just announce they’ll be charging some nebulous quarterly fee. and not tell you what it is.

Comment: To me it’s like buying a car & signing the contract & telling the salesman to fill in the price later as he sees fit.

25:01: Yeah, that bothers me a lot. What I would normally advise you to do is not sign-up for that contract, because that sounds like a really bad deal. And I know that doesn’t help anybody a lot.

Comment: that sums it up. Don’t sign.

25:16: Yeah. Don’t take that deal.

25:19: Comment (voice): Agenda, what you just said, then we can’t even operate. They’re basically offering us something we have to follow-through with; but you’re advising us as an attorney, it’s not a good idea to sign that contract. We have no choice.

[Note: a problem here is that in order to sign-up, creators / operators must pay Linden Lab a non-refundable fee, invoke attorney fees for the provision of an RLO, etc., all of which amounts to needless / wasted expenditure should they subsequently find that the quarterly fees are not to their liking and opt cease creating / operating such games and withdraw from the Skill Gaming agreement with the Lab.]

25:33: I am incredibly sympathetic to that. There’s not much that an attorney can do, or really that you guys can do. what it sounds like to me, is that Linden Lab doesn’t have their crap together on this.

Comment: It seems the only real option is so close & not sign contract or apply until they have divulged what the quarterly fees will be.

Question: But, aren’t we “gambling” on the fact that they will not gouge us on the quarterly?

25:46: I kind-of grumble about a lot of the things that linden Lab is doing right now, but I don’t think they’re doing something shady or malicious by not disclosing the quarterly fees. I just don’t think they have their shit together right now. I think there’s too much that is left undone and that is unfinished with a lot of the application process, and I just think that’s one of the things that’s left unfinished; that they don’t know what the quarterly fees are yet, and so they’re leaving it blank.

Comment: If they had their shit together then they would have made the August 1st deadline.

26:17: Yeah, I agree. They would have made the August 1st deadline, and they didn’t. And I don’t think they’re going to make the September 1st deadline.

Question: once you convert sim to Skilled Gaming Region at higher tiers of $345USD , I wonder if once you convert if you are locked in at higher rate as with the old grandfathered Sims?

26:25: that’s a good question. I don’t know if you’ll be able to convert back if you’re locked-in at a higher rate. I don’t think they have figured that out yet.

Question: I wonder if the financial data [which the Lab has requested as a part of the application process] will be the basis of determining the quarterly fees?

26:36: I think you may be right, but I think what they are doing is waiting to see how many people are applying for the gaming regions. I think they need to know how many gaming regions they’re going to have, and what their cost to run them is going to be, and factor all of that in, before they figure -out what the quarterly fees are going to be. But they need to tell people what the quarterly fees are going to be before they can apply. And so it’s again, Linden Lab has to get their crap together.

27:08 Question (voice): My question is towards multi-player games … If a group of people come and they sit down as a group, and they pay-to-play a skill-based multi-player game, would it be wrong to add a progressive pot, that a percent they’re paying goes to a progressive, if they get a score, if they hit that score, it’s considered a skill-based game, [but] would that still having a progressive jackpot be considered chance?

27:39: That’s actually a pretty good question. So, what people use is … there’s a test, and it’s kind-of the dominant factor test in figuring-out whether something is a skill-based game or a chance based game.

27:59: So, basically, what you have to do is make sure that when you’re creating a game, that most of the game is skill-based. It’s got to be primarily a skill-based game. and so if, when you’re creating the game, if the majority of the game, and the majority of the pay-out of the game comes from the player’s skill, you’re probably OK.

28:21: I can’t give you legal advice, and so I can’t give you a specific, oh yes, this game is OK, but this game is bot. but in general, if what you’ve got is most of your – yes, Backgammon is a good example, but again, you look at poker, and poker is right on that edge. Because some states view it as a skill game and some states view it as a chance game. So yeah, you know, I don’t know. I view poker as a skill game, but boy, I like to play poker and I like the skill of it.

29:00: But I think you have to figure-out how much of the player’s skill influences the game. And in terms of adding that progressive jackpot, that’s adding an element of chance. So you need to balance that with more skill on the front-end.

29:19: Question (voice): OK. The skill, though would be if a player is playing a game, and they’re using their skill to get that high score to achieve that pot. Now if somebody doesn’t have a lot of skill, because they’re trying to figure-out … their knack in the game to realise, OK, this is what I’ve got to do to be more skilful in it. Would you still consider that chance? Because everyone has a chance at it, it’s the way you play the game; there’s no wildcards in the game that I’m talking about. There’s no, hey I’m going to take away your score because you hit this, and that’s a negative. It’s all skill-based on … how the player plays that game … So wouldn’t it be considered a bonus? You’ve achieved it, you’re very skilful, and knowledgeable of the game, and you know how to play it. So wouldn’t that be considered more of a bonus to add on to the game for the players, like an incentive, you’ve learned the game, here’s an incentive pot. Would that still be considered chance?

30:27: I think that’s a good question, it may be a little more specific than we can get into right now, I’m be happy to discuss it with you, maybe after this.

Question: How do you feel about games that trigger a variable random payout engine? Does that move the balance of the game from skill to chance?

30:42: I think that the variable, random payout, any time that you start using things like “random”, “random” is absolutely chance, you know? I start rolling dice and star using random number generators. That’s chance. So I wouldn’t say that you can never us random elements, but the more randomness you include, the more skill you have to build-in.

[At this point the formal part of the meeting drew to a close, although Agenda continued to take some questions informally, following general chit-chat about tipping the venue, etc. (cut from the audio). There was one more question I was able to record before having to take my own leave, and that is recorded below.]

31:50: question (voice): Hey guys, just a real quick question. Are you guys [the SLBA] offering the RLOs or offering any RLO work?

31:56: I can do some RLOs, but only in California.

Comment (chat): I would think, you could band together and get one RLO for your state and share that.

32:01: I was actually just going to say what Jen said. If you can find some people in your state, you could probably, basically come together and form a LLC or form a small corporation and work together.

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3 thoughts on “SLBA ToS and Skill Gaming presentation (2): Skill Gaming

  1. Monday Beam, here. Interesting discussion, thank you all for sharing. Rarely do I have to defend myself in the forums, but there is a first for everything and this apparently is no exception. I have listened to the presentation posted at “modemworld”, and have read the transcript. While it was helpful, it made no specific reference to “Monday Beam” in the context of the presentation (nor within the transcript). Instead, a question was asked which somewhat mischaracterized my procedure for creating an attorney-client relationship (although, again, I was not mentioned in the context of the transcript).

    That said, I would like to attempt to clarify a few things so that users in Second Life™ can make an informed decision about the process for obtaining an RLO from me.

    1. Disclosure. I have to date provided my RL credentials and contact information to ALL Creators and Operators for whom I have drafted RLOs, as well as to LL directly, after much back and forth with LL on what their policy or procedure would be. Ultimately, I submitted my current bar registration card directly to LL within the body of two (2) Support Tickets, showing “Active Status” and “Good Standing” to practice law, as well as my state identification, and real world contact information. Additionally, I have provided RLOs on my real world letterhead, at the direction of LL, which of course was also tendered to each Applicant requesting an RLO.

    2. Limitation of Representation. I receive requests for “legal services” every day, from furries, and fairies, and werewolves, and virtual parents with prim babies, and pixelated “criminals” sitting in SL prisons, etc. In these role play situations, I clearly would not want to establish anything resembling an attorney-client relationship. Therefore, at the instruction of my bar association when I joined SL in 2007, I have specifically and unequivocally PRECLUDED any purported legal representation between myself and an anonymous avatar in a role play scenario, in favor of a traditional retainer agreement wherein both parties make full disclosure (as described above, and as specified in my posted Terms of Service).

    3. Multistate-Federal Legal Representation. My Terms of Service state, “The Second Life™ account holder behind Monday Beam (“Attorney” herein), is a real life attorney practicing law in the United States and licensed to practice in the state of Illinois before the Circuit Courts of that state, the Illinois Appellate Court, the Illinois Supreme Court, and federally within the District Court for the Northern District of Illinois.” My primary area of practice is criminal litigation, with a secondary emphasis on Intellectual Property law, which makes me uniquely situated to determine whether any given skill-gaming activity could be construed as illegal under federal statutory law. The comment made by the speaker pertaining to lawyers representing clients who reside only in the state in which the lawyer is licensed, is misplaced. The federal gambling laws place representation soundly within the parameters of the “Authorized Practice of Law” for any attorney licensed to practice in a federal court of law, as it includes parameters which affect all 50 states in the United States. Secondly, my state (Illinois) has addressed the issue further, stating “if the lawyer, located in Illinois, is retained by a Wisconsin client simply to give legal advice on Illinois, Wisconsin or federal law, the lawyer would not be considered engaged in the unauthorized practice of law simply because the client is situated in Wisconsin.” See ISBA Op. No. 92-6 (Oct. 23, 1992)

    Had the speaker at the modemworld forum been made aware of the specifics that I have disclosed above, my hope is that she might have used a term other than “shady” to answer the question. The speaker, “Agenda Faromet”, who is wholly anonymous to me, as well as to the group who attended, states that she too is a licensed attorney practicing privacy law in California. Not shady at all, in my humble opinion. Agenda, shoot me an IM.

    If any of you have any additional questions, concerns, comments, etc., please kindly reach out to me inworld, or at, as I do not revisit these forums often. I wish you all well as we traverse these strange new virtual times.


    Monday Beam


    1. Thank you for reaching out both here and on the main page of this transcript.

      No specific mention of “Monday Beam” was made in the presentation as Agenda was resonding to a question on the subject to the best of her ability. While the name “Monday Beam” was mentioned in text chat during the Q&A, the person raising the issue was non-committal as to whom they were referring. As such, I felt it prudent not to include the name so as to avoid possible issues of mis-identification.

      However, I’ve updated the transcipt to indicate you have confirmed your identity and to link to your comment on the main page so that readers can be further informed.

      Just as a point of calarification as well, the event was organised by the SL Bar Association, not by “Modemworld”, which is purely the name of my blog, and I’m actually simply as a means of reporting on the event.


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