The creator of the popular virtual world ‘Second Life', Linden Labs has decided all in-world casinos and virtual gambling enterprises are to be discontinued – apparently due to legal concerns.

The move will not only disappoint Second Life gamblers who wager with Linden Dollars in the venues, but will curtail the revenues earned by Linden from those owning casino-style islands in the game, the owners of which are apparently some of the top contributors to the Linden Lab coffers through currency fees and land rental.

Readers may recall earlier reports that Linden had asked the FBI for guidance on the issue of legality of Bodog Life PokerSecond Life wagering, and it appears from the latest policy decision that the feedback from the feds has been negative. Linden's new Terms of Service state the company will comply with all subpoenas from US law enforcement demanding information.

The Second Life blog goes into some detail in explaining the new policy, advising that in addition to no longer accepting any classified ads, place listings, or event listings that appear to relate to simulated casino activity, Linden must comply with state and federal laws applicable to regulated online gambling, even when both operators and players of the games reside outside of the US.

"Because there are a variety of conflicting gambling regulations around the world we have chosen to restrict gambling in Second Life, the blog announcement informs. "Because this is an evolving area of law, we may continue to adjust and clarify this policy as we receive feedback from the community and from legal authorities, or as new regulations, industry practices and technology solutions come into effect.

The blog then goes on to detail the blanket policy ‘outlawing' any form of Second Life gambling, specifying games and type of venues affected, and including sports betting.

"Linden Lab will actively enforce this policy. If we discover gambling activities that violate the policy, we will remove all related objects from the inworld environment , may suspend or terminate the accounts of residents involved without refund or payment, and may report any relevant details, including user information, to authorities and financial institutions," the owners warn.