SL Capital Exchange have announced that are suspending activity until further notice as they await approval on their application to be an approved skill gaming operator. The announcement states :
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.
I do not know how long this might take, because honestly I thought this would all have been resolved already, however I hear there is a backlog of applications and Linden Lab needs the proper time to review them all thoroughly. So we need to be patient, and wait for Linden Lab’s counsel to do their job.
I’m a bit bemused as to just why CapEx are having such difficulty in getting a reply on approval, I’m also a bit bemused as to why they are seeking approval in the first place but more on that later. CapEx, for those who don’t know, is a fictional stock exchange where Second Life business owners list their business on the stock exchange and the value of shares rise and fall. I’ve engaged with this in the distant past by buying and selling shares and have never had bad experiences with it. I would imagine there have been issues when a Second Life business ceases to be, but I haven’t fell victim to that.
The suspension is due to the Skill Gaming Policy from Linden Lab which had a deadline of November 1st for people to cease activities even if they had an application pending, as explained in a blog post from Linden Lab at the end of September :
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.
Whereas I have sympathies for both Linden Lab and applicants during this process, as new issues arise during the process, it seems a bit off that a venture that applied as far back as July are still left dangling in the wind in November.
However then we come to another issue, why are CapEx applying for skill gaming status in the first place? Yes you put money in and yes you can get money out but real life stock exchanges aren’t officially considered as gambling ventures. I mean many people consider stock exchanges to be a gamble, but they aren’t covered by gambling or gaming licences. I can understand CapEx insisting that any gaming companies listed on their exchange are required to have skill gaming status but I’m not sure why the exchange itself is seeking that status, unless it’s because gaming companies are listed on their exchange.
Back in August the Second Life bar association held a discussion on the skill gaming policy, as reported by Inara Pey and in that discussion Agenda Faromet said :
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.
It doesn’t matter what the rick versus reward is, it doesn’t matter that you can sell your rare breedables for a gazillion dollars; they’re not [gambling].
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.
Now obviously legal opinions vary. Maybe they decided it was the right course of action and they have of course consulted with legal counsel on this issue but I’m not 100 % convinced that they needed to go down this path.
However having gone down this path, they should really have received a definitive yes or no by this time. Linden Lab’s approval process has been somewhat slow, a number of ventures were approved in August and then there was nothing until late in October, with a number of ventures being approved just before the November deadline.
As I said I have sympathy with participants and Linden Lab. As painful as this process has been, I do think Linden Lab are doing the right thing here. However it has been a bit of a learning curve for Linden Lab. Hopefully the CapEx situation will be resolved one way or another in the near future.
Inara Pey and Nalates Urriah have both posted about this issue too.
CapEx isn’t a stock exchange, it’s a “stock market simulation game” (that’s CapEx’s own description), requiring what is effectively a “pay to play” process on the part of those entering the “game”, together with potential for payouts (“dividends”) which aren’t entirely down to the luck of the simulation; ergo, it appears to be a Skill Game.
Remember, the Policy FAQ states that a Skill Game is one that: 1) whose outcome is determined by skill and is not contingent, in whole or in material part, upon chance; 2) requires or permits the payment of Linden Dollars to play; 3) provides a payout in Linden Dollars; and 4) is legally authorized by applicable United States and international law.
[My emphasis]
In this respect, Agenda’s earlier quote from the meeting might be more appropriate:
“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.”
Perhaps but where I feel there’s a grey area with CapEx is that you don’t so much pay to play, you buy to play. Participants are buying shares in those virtual businesses.
This may be creating quite a headache for the Lab as it’s not like playing some of the other skill games.
I used to trade shares in first life extensivly and I can assure you, it is pure gambling and most professionals have no skill at all;)
Oh I don’t disagree with you there, I have had a small dabble myself, it most definitely felt like gambling to me too.