Update: As reported by Eurogamer, the UK Gambling Commission has now commented on the sentencing of YouTuber Craig “Nepenthez” Douglas.
“This was one of the most serious cases that has been investigated and prosecuted by the Commission,” the commission’s Sarah Harrison said. “Its gravity is reflected in the significant financial penalties imposed by the Judge. The defendants knew that the site was used by children and that their conduct was illegal but they turned a blind eye in order to achieve substantial profits. The effect on children of online gambling was rightly described by the Court as ‘horrific’ and ‘serious’.
“All websites offering gambling facilities in Britain must be licensed; it is the only way in which children and vulnerable people can be protected. This case demonstrates that we will use the full range of our statutory powers to investigate and prosecute individuals and companies who try to operate illegally.”
Last September, Craig Douglas and Dylan Rigby were charged with promoting lottery and advertising unlawful gambling under the UK’s Gambling Act—in turn becoming the first prosecutions made in relation to videogame betting in Britain. At the time, both the accused plead not guilty but, after a change of plea, Douglas has now avoided jail time at the expense of a “substantial fine.”
As reported by the BBC, Douglas—otherwise known as Nepenthez—and business partner Rigby ran the FUT Galaxy website which allowed players to swap virtual currency from FIFA 17, which could be used to bet on real life football matches. Winnings could thereafter be transferred back to FIFA 17, however the game’s virtual currency can also be traded on an online black market and thus falls foul of the aforementioned Gambling Act.
Furthermore, Douglas promoted FUT Galaxy to subscribers of his YouTube channel—which is followed by more than 1.3 million people.
After appearing in court yesterday, Douglas admitted a charge of “being an officer of a firm that provided facilities for gambling with an operating licence”, according to the BBC, as well as an offence tied to the advertising of illegal gambling. Rigby, on the other hand, plead guilty to two charges “connected to the provision of facilities for gambling”, as well as one linked to the advertising of unlawful gambling.
Taking to Twitter yesterday evening, Douglas suggested he’d avoided prison by accepting a “substantial fine.”
According to The Guardian, this charge amounts to £91,000, while Rigby was ordered to pay fines and costs of £174,000—£16,000 and £24,000 in fines, and £75,000 and £150,000 in prosecution costs respectively. The Guardian reports that due to the unregulated nature of the gambling site, one 14-year-old boy lost £586 in a day.
Upon handing down the fines, district judge Jack McGarva told the Birmingham magistrates court: “The aggravating features of these offences are they were committed over a relatively long period of about six months. Children were gambling on your site. It’s impossible for me to know how many or the effect on them. In my opinion, both of you were aware of the use of the site by children and the attractiveness of it to children. At the very least, you both turned a blind eye to it.”
This case may be the first to reach the courts in relation to videogame gambling in the UK, however unlawful skin gambling in Counter-Strike: Global Offensive became a major talking point last year. Evan wrote this handy overview of how skin gambling works and investigated the legalities (or lack thereof) of the industry, before Valve itself slapped a number of operators with cease and desist orders.
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