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According to my sources, the SAFE Port Act makes online gambling illegal. According to this source, the act "had attached to it a section making it illegal for banking institutions to allow their customers to send money to offshore gambling sites". And according to a blog post on fbi.gov,

What’s allowed? Some free online games, fantasy leagues, 
and Indian gaming sites that aren’t strictly defined as Internet gambling.

It’s also illegal for businesses to run gambling websites and to solicit 
online bets. Even companies handling transactions for cyberspace bettors 
can face federal charges.

I need clarification on what forms of gambling websites are legal vs. illegal. And what about gambling items in a videogame?

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The relevant legislation is found in sections 5361-5367 of the United States Code. The key prohibition is in section 5363.

To fall within the scope of this prohibition, a person must:

(1) be "in the business of betting or wagering" and

(2) accept a payment in connection with the participation of another person in "unlawful Internet gambling".

So you need to look at (1) what is betting or wagering and (2) what is unlawful Internet gambling.

Both terms are defined in section 5362 and discussed on Wikipedia.

Assuming that you are running a video game that is not a thin veneer over a casino, and the users are gambling in-game items that are not purchased with actual money, then you are unlikely to be found to be engaged in the business of betting or wagering, especially given the exclusion in section 5362(1)(E)(viii) for "participation in any game or contest in which participants do not stake or risk anything of value."

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