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Despite online gambling being illegal in the US, Second Life has long played host to hundreds of virtual casinos, lottery games and other forms of gambling. Although residents can only bet with the in-game currency, this can be exchanged for real money.

Second Life has reportedly been the subject of an ongoing probe by the FBI, to determine if it was breaking any laws. Now it seems Linden Labs has taken pre-emptive action to avoid any potential prosecution.

"While Linden Lab does not offer an online gambling service, Linden Lab and Second Life Residents must comply with state and federal

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laws applicable to regulated online gambling, even when both operators and players of the games reside outside of the US," the company states on its blog. "And, because there are a variety of conflicting gambling regulations around the world we have chosen to restrict gambling in Second Life."

The move is likely to prove incredibly unpopular with the residents of the virtual world. Casinos are often among the most popular in-game destinations and many players would have invested much time and money in building the gambling dens. However, they'll get no compensation from Linden Labs. "There will be no reimbursement if Linden Lab removes objects or activities that violate this policy," the company states.

Linden says it may have to take on additional staff to ensure the gambling ban isn't flouted. "Our staff will review, investigate and respond to appropriate notices. We may retain additional staff or services to conduct this activity. When we discover objects or games within Second Life that meet the policy's definition, we will remove them from Second Life," it warns.