European Gaming Lawyer magazine EGL_Spring2017_opt - Page 27

the possible financial and other sanctions that could apply . Of note for potentially uncompliant licensees , it sets out clear criteria for determining the amounts of financial penalties and settlements – including by applying discounts to the financial penalty element of a fine where licensees have made early disclosures , made admissions , and cooperated with the Commission ’ s investigations .
The consultation paper contains more detail on the Commission ’ s proposals and interested parties are invited to respond in writing by 21st April 2016 using an online form . If you or your clients intend to submit a response to the Commission in connection with this or any other matter , you should consider taking proper advice on the implications of the proposed amendments on your business and / or liaising with other representatives in your sector to submit a joint response .
The FutGalaxy saga The amendments proposed in the consultation paper have yet to take effect , but as the following case clearly demonstrates , the Commission is not going to hold back from pursuing the prosecution of unlicensed offenders , particularly where their activities are presented as real gambling products , involve a stake or are aimed at children .
The Commission ’ s recent action against Craig Douglas , aka NepentheZ , and co-defendant Dylan Rigby ( which is covered in more detail elsewhere in this journal ) has been cited as the most serious case investigated by the Commission to date and is likely to be a sign of things to come . The prosecution centred on the offenders ’ operation of www . FutGalaxy . com , a website which allowed its customers to buy virtual currency called FUT coins and use them to gamble on a variety of products including sports betting , a jackpot style lottery game , and a ‘ higher or lower ’ style game . FUT coins could also be converted into FIFA coins , which could in turn be sold for real money . Evidence presented during the trial included a video of Douglas on his YouTube channel saying to the camera : “ You don ’ t have to be 18 for this , because this is a virtual currency ”. In other words , the defendants encouraged children to use the site in order to gamble . The Commission was successful in its prosecution and Judge Jack McGarva ordered Rigby to pay £ 174,000 in fines and costs , whilst Douglas was ordered to pay £ 91,000
Conclusion Since the introduction of point of consumption regulation , the Commission has faced an astronomical increase in the number of licensees subject to its remit . It has therefore pooled its resources by bringing potential issues to the attention of watchdog organisations and government departments , such as DCMS , the CMA and the ICO , resulting in a plethora of investigations into all different types of activity in the sector , along with a consultation on how best to take action against operators that don ’ t conform to t he new norms . In summary , the increased scrutiny into market practice is not a passing phase and , in this author ’ s opinion , the scope for future reviews seems likely only to expand . Businesses operating in the sector will do well to take a step back now and consider how their current practices appear to ‘ Joe Public ’, what effect their operations might have on children and other vulnerable people , and what steps they can take to prevent harm before it happens . If the industry keeps looking through a prism of self-interest and doesn ’ t take steps now to put the consumer first – it will face the consequences .
Gemma Boore is a corporate and commercial associate at Bates Wells & Braithwaite London LLP with a specialist interest in the regulation of gaming , betting and gambling . Gemma speaks frequently at industry events and , on a day to day basis , handles a broad range of corporate and commercial transactions for both start up and established tech companies including mergers and acquisitions , financing and commercial advisory work .
European Gaming Lawyer | Spring Issue | 2017 | ��
the possible fi nancial and other sanctions that could apply. Of note for potentially uncompliant licensees, it sets out clear criteria for determining the amounts of fi nancial penalties and settlements – including by applying discounts to the fi nancial penalty element of a fi ne where licensees have made early disclosures, made admissions, and cooperated with the Commission’s investigations. Th e consultation paper contains more detail on the Commission’s proposals and interested parties are invited to respond in writing by 21st April 2016 using an online form. If you or your clients intend to submit a response to the Commission in connection with this or any other matter, you should consider taking proper advice on the implications of the proposed amendments on your business and/or liaising with other representatives in your sector to submit a joint response. The FutGalaxy saga Th e amendments proposed in the consultation paper have yet to take eff ect, but as the following case clearly demonstrates, the Commission is not going to hold back from pursuing the prosecution of unlicensed off enders, particularly where their activities are presented as real gambling products, involve a stake or are aimed at children. Th e Commission’s recent action against Craig Douglas, aka NepentheZ, and co-defendant Dylan Rigby (which is covered in more detail elsewhere in this journal) has been cited as the most serious case investigated by the Commission to date and is likely to be a sign of things to come. Th e prosecution centred on the off enders’ operation of www.FutGalaxy. com, a website which allowed its customers to buy virtual currency called FUT coins and use them to gamble on a variety of products including sports betting, a jackpot style lottery game, and a ‘higher or lower’ style game. FUT coins could also be converted into FIFA coins, which could in turn be sold for real money. Evidence presented during the trial 6VFVBfFVbFVv22UGV&R6V6pFFR6W&( ŖRF( BfRF&Rf F2&V6W6RF22f'GV7W'&V7( खFW"v&G2FRFVfVFG2V6W&vV@6G&VFW6RFR6FR&FW"Fv&RFR6֗76v27V66W76gVG0&6V7WFBVFvR64v'f&FW&VB&v'F *3sBfW0B67G2v7BFVv2v2&FW&V@F *366W666RFRG&GV7FbB`67VF&VwVFFR6֗76আ2f6VB7G&֖67&V6RFPV&W"bƖ6V6VW27V&V7BFG2&V֗BगB2FW&Vf&RVBG2&W6W&6W2''&vrFVF77VW2FFRGFVFbvF6Fr&v6F2BvfW&V@FW'FVG27V62D42FR4BFR4&W7VFrWF&`fW7FvF2FFfbW&VBGW0b7FfGFR6V7F"rvF67VFFr&W7BFFR7Fv7BW&F'2FBF( B6f&F@RWr&27V'FR7&V6V@67'WFF&WB&7F6R2B76r6RBF2WF.( 2FR66Rf"gWGW&R&WfWw26VV2ƖVǐǒFWB'W6W76W2W&FpFR6V7F"vFvVFFR7FW&6rB66FW"rFV"7W'&V@&7F6W2V"F( RV&Ɩ>( vBVfbV7@FV"W&F2֖vBfR6G&VBFW"gVW&&RVRBv@7FW2FW6FRF&WfVB&&Vf&PBV2bFRGW7G'VW2pF&Vv&6b6Vb֖FW&W7BBFW6( @FR7FW2rFWBFR67VW"f'7B( 0Bvf6RFR66WVV6W2vV&&R26'&FR@6W&6766FRB&FW0vV2b'&FvFRFvF7V6Ɨ7BFW&W7BFP&VwVFbv֖r&WGFpBv&ƖrvV7V0g&WVVFǒBGW7G'WfVG2BFFF&62FW0'&B&vRb6'&FR@6W&6G&67F2f"&F7F'BWBW7F&Ɨ6VBFV66W26VFrW&vW'0B7V6F26r@6W&6Gf6'v&WW&Vv֖rwW"7&r77VR#r