The popularity of Second Life, once thought by many to be a booming new center of commerce, is fading and new regulations, scandal and outright theft are taking their toll on the virtual world.

The recent gambling ban caused a US$2 million dollar drop in spending within Second life the day it went into effect. To make matters worse, shady stock deals going on among the upstart in-world stock exchanges.

So, virtual resident beware. A lawless land isn't a panacea, and adding new laws and regulation is sure to upset the apple cart a bit.