An eSports YouTube star and his business partner have pled guilty to illegal gambling activity in the UK, marking the first successful prosecutions of eSports gambling.
On Monday, BBC News reported that Craig Douglas (pictured, inset) and his business partner Dylan Rigby had withdrawn their not guilty pleas and admitted their roles in encouraging eSports players to bet virtual currency known as FIFA Coins on eSports betting site FUTGalaxy, which offers random slots or lottery games.
Both men were spared jail time, but Rigby was fined £24k and ordered to pay prosecution costs of £150k, while Douglas was fined £16k and ordered to pay costs of £75k. The pair’s attorney told the court that Rigby “accepts he was the prime mover and Mr. Douglas’s role was as an advertiser and a promoter.”
District Judge Jack McGarva slammed both defendants for having been “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.” The court heard that the pair’s gambling site generated a pre-tax profit of around £96k between July 2015 and February 2016.
Last September, the UK Gambling Commission commenced legal proceedings against Douglas and Rigby, accusing them of promoting a lottery and advertising unlawful gambling via their YouTube videos. Douglas, who operated on YouTube under the screen name Nepenthez, had over 1.3m subscribers, many of whom were below the legal age for gambling in the UK.
In October, the pair entered not guilty pleas and Monday’s hearing was expected to be the start of a week-long hearing. Instead, Douglas pled guilty to providing facilities for gambling without a UK gambling license and promoting unlawful gambling. Rigby, who had a greater role in running the FUTGalaxy site, pled guilty to two charges of operating without a gambling license and a charge of promoting unlawful gambling.
Last week, Douglas posted a new YouTube video in which he referenced Monday’s hearing, saying ‘there is a probability that I won’t be walking out of court on Monday morning, and that’s scary.” Following the hearing, Douglas tweeted that he owed “a huge apology to my family and close friends for putting them through this process.”
The UKGC announced last August that the increasing popularity of eSports was raising “new issues” and thus eSports betting operators needed to apply for and be issued a gambling license, with all the same restrictions on preventing underage gambling that go with a regular betting license.
The UKGC noted that eSports ‘skin betting’ – in which players gamble with virtual goods acquired within eSports games – was on their radar due to the fact that skins “are traded or are tradable and can therefore act as a de facto virtual currency and facilities for gambling with those items are offered.”
Rigby and Douglas focused most of their promotion on EA Sports’ FIFA video game, which used FIFA Coins as its in-game currency. Social media messages revealed that the pair had dismissed warnings that their promotion of the FUTgalaxy site risked a regulatory crackdown, with Douglas telling one Twitter user to “let us worry about that kind of stuff, yeah. Jesus, lmao.”
