The U.K. has fully prosecuted its first video game based gambling incident. Craig “NepentheZ” Douglas and Dylan Rigby operate the website FutGalaxy which enabled its users to bet virtual currency from FIFA 17 on real-life football matches. Last September, Douglas and Rigby were charged with promoting lottery and advertising unlawful gambling under the U.K.’s Gambling Act, with Douglas receiving an extra charge of inviting minors to gamble.
U.K. law requires all websites offering gambling facilities in Britain to be licensed. The U.K. Gambling Commission has stated that this is intended to protect children and other vulnerable people from predation. Douglas is a prominent YouTuber, and used his platform to promote the FutGalaxy website to his million-plus subscribers. The website had no age restrictions, and allowed minors to use credit cards to place bets with a virtual currency. The Guardian reported that Douglas expressly encouraged child users onto the website, saying in a video, “You don’t have to be 18 for this, because this is a virtual currency.” Unfortunately for them, U.K. district judge Jack McGarva did not agree with this cheerful assessment — even using it against the defendants during his ruling: “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.”
Douglas managed to avoid jail time by changing his plea to guilty, although both Douglas and Rigby are now facing hefty fines for their actions: £174,000 ($216,838) and £91,000 ($113,404), respectively. “This was one of the most serious cases that has been investigated and prosecuted by the Commission,” said Sarah Harrison, Chief Executive of the U.K. Gambling Commission. “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.’”
“It wasn’t like I set out to break the law,” Douglas remarked later in a public statement, “but I do have to accept the judgment of the courts, which I do fully, and I did break the law. I’ve been punished for that.”
The question remains: What does this mean for the popular websites that gamble skins and virtual currencies here in America? U.K. rulings do not bind U.S. courts, however, it could influence a U.S. court to act in a similar manner. Further, the U.S. government has already been tightening its grip on online gambling, as we saw recently with The Washington State Gambling Commission’s issuance of a cease and desist letter to Valve in connection with CS:GO skin gambling. At the very least, this doesn’t bode well for U.S. based websites behaving similarly, and the case of Douglas and Rigby could be a telling sign of things to come.
Co-authors, Ritika Gopal and Christopher Aranguren, are legal interns at Morrison / Lee. Ritika and Chris also currently attend law school, where they study intellectual property and media law.