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.

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.