Crime and Gambling in a Virtual World — by Clare Chambers-Jones





The popularity of virtual worlds and on-line gaming has increased drastically over the last decade. This has presented new opportunities for criminals who wish to exploit the blurry legal lines that govern the Internet. Dr Clare Chambers-Jones claims that we need a better understanding of the nature and extent of cyber crime in order to create effective legislation.

How many of us play computer games or use a virtual world to act out our fantasies, or let our children play computer games? We are all aware that there are dangers on the internet for children and vulnerable people but do we take the time to sit back and fully consider the potential criminal use of seemingly harmless games and virtual worlds? I doubt it, and why should we? After all, games and virtual worlds are meant to be social and fun activities. However, it is an unfortunate fact that the connectivity that interactive technology provides for us as an avenue for enjoyment can also be used by criminals as a means of committing crime.


How does crime occur in virtual worlds and games?

Over the last seven years I have been researching how different financial crimes can occur within virtual worlds and online games. My research has found a number of possibilities. The first is the opportunity presented by virtual worlds for laundering money. This can only happen when virtual worlds have their own economic monetary system where in-world currencies can be exchanged for real world money and vice versa. Criminals can launder small or medium amounts of money through the virtual world economic money exchange without providing correct personal information. This anonymity of criminals causes jurisdictions many problems and the small amounts can over time add up to large sums of money.

A second issue is the way in which virtual worlds can be used as a meeting place for international cartels operating drug trafficking, money laundering or people trafficking – to name but a few criminal activities. Again the level of anonymity poses problems for law enforcement agencies in terms of detection and prosecution.

Another way criminals can use virtual worlds and games as a means of committing crimes is via gambling. Gambling in popular virtual world Second Life has been banned by the terms and conditions that users are required to agree to before entering the world. The law too is also aware of the potential abuse of gambling on the internet and has tried to monitor and regulate this activity. The Gambling Act 2005 has widened the scope of what constitutes gambling, so much so that now many children’s games which involve skill or chance and also money or objects with a monetary value fall inside the scope of the legislation. Yet some game makers are not aware that games that are produced for children should now be licensed with the Gambling Commission and could be used as a potential money laundering avenue by criminals.


The law has virtual world crimes covered?

The law has not kept pace with the changing technological advances that virtual worlds and other online interactive games make year on year. Cybercrime is acknowledged as the fastest growing new area of crime nationally and internationally, yet the main piece of international legislation (given that most internet crimes occurs across national borders) is the European Convention on Cyber Crime 2001, and the Commonwealth Model Law on Cyber Crime 2002. Although these pieces of legislation demonstrate States commitment to legislating against crimes occurring on the internet, they fail to take into account the drastic changes that occur with technological advancements such as mobile phone and internet use, virtual world use and the increasing connectivity social media provides.

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Financial Crime and Gambling in a Virtual World – by Clare Chambers-Jones


What is holding up legislators?

Law is formed through acceptance that there is a need for legislation in a certain area. This is where the problem lies for virtual world and cyber law. There is considerable academic debate and disagreement as to whether: (a) there is virtual world crime occurring; (b) if there is a crime committed within a virtual world/game is it a real crime i.e. a physical harm outside cyberspace; (c) should physical world laws be applied or should new bespoke laws be drawn up to deal with cyber activity? and (d) should the internet and its activities be controlled and monitored in any way?


It’s all in a name

It is important to have a clearly defined term to outline the criminal activity that is going on. This must be the starting point for any discussion. To define an activity will then lead on to discussions as to whether it exists, whether it’s a problem and, if it is, then how it can be prevented and controlled. I also have stated in my research that the terminology or name of the crime must not be fanciful or make light of the serious nature of the criminal activity. It must be able to stand the test of time and to make sense of what is occurring.


Virtual worlds and games are not all bad

Virtual worlds and games are amazing places and many excellent activities can take place within them. For instance at my institution, the University of the West of England, we have a virtual world island in Second Life where we undertake undergraduate and postgraduate learning and teaching. I personally teach my law course online in the virtual world space which provides connectivity, interaction and a sense of perception that other online courses just cannot provide. They are social and educational spaces and if used correctly can bring a lot of enjoyment and productivity to the user.


So what next?

The next step is to start talking more about using virtual worlds and games. If you have not been in a virtual world before then I invite you to come and visit me in Second Life; I would be more than happy to show you around and talk about the benefits of virtual worlds and also my research if you are interested. The island location is UWE Innovation Island (type into Second Life’s search menu or click on: at UWE/124/224/27).


Dr Clare Chambers-Jones, Associate Professor at the University of the West of England, (2001 LLB Glamorgan University) PhD in Financial Exclusion and Banking Regulation (2004 Bournemouth University) FPC (2004 Chartered Institute of Insurers) PGCert in Academic Practice (2007 Bournemouth University) PGCert in Research Supervision (2008 Bournemouth University) MA Education in Virtual worlds (pending 2014). Clare has worked in the City of London with Grant Thornton and subsequently Morgan Stanley, where she worked as an investment banking legal and compliance officer for Europe. Her research interests are banking law, financial education, financial exclusion, alternative financial delivery mechanisms, cyber law and crime jurisdiction and mobile finance. She has researched prolifically on the subject of banking and finance and cyber jurisdiction and criminal actions on an international level. Her new book Financial Crime and Gambling in a Virtual World is published by Edward Elgar.



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