The move comes as a result of significant variations in international gambling laws, and particularly because online gambling is illegal in the United States. As a result, in order to avoid any potential conflict, the company has decided to eliminate the activity altogether. The move follows Linden Lab's decision in April to no longer accept classified ads, place listings or event listings relating to "simulated casino activity."
A post on the official Second Life Blog says, "While Linden Lab does not offer an online gambling service, Linden Lab and Second Life Residents must comply with state and federal laws applicable to regulated online gambling, even when both operators and players of the games reside outside of the U.S. And, because there are a variety of conflicting gambling regulations around the world we have chosen to restrict gambling in Second Life as described in a revised policy which is posted in the Knowledge Base under 'Policy Regarding Wagering in Second Life.'"
However, Linden Lab also said that because this is an "evolving area of law," the policy may be adjusted and clarified in the future, presumably leaving the door open for some form of in-game gambling in the future. The full text of the gambling shutdown statement is available here.