Jason writes:

Linden Labs just released an update to their terms of service that appears to outlaw most forms of gambling. Specifically mentioned are any activities where currency (Linden or otherwise) is transferred based on games of chance or the outcome of sporting events.

This is huge for a lot of property owners in SL that run large casinos and clubs, as well as all the folks that earn revenue from the happenings at these locations. It's also bound to affect everyone who purchase and sell land, now that land can no longer be used to generate virtual money in this manner.

It's also an interesting example of how first-life regulation is adapting to "virtual" economies. Think about it: is the paper in your wallet or the record in your bank account fundamentally different from the value of the 0s and 1s being created in online activities?