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Wednesday, 20 March 2019
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UKGC to Crack Down on Virtual Item Gambling

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The UK Gambling Commission (UKGC) has promised to crack down hard on websites that facilitate gambling with virtual in-game items and to use “all the powers available” to “punish and deter” such operators, especially those who offer their services to children.

Speaking in London on Tuesday at the International Casino Exhibition’s World Regulatory Briefing, UKGC Chief-executive Sarah Harrison said that the commission was committed to tackling unlicensed gambling “wherever it occurred” and will above all act to protect children.

Her speech came just one day after the UKGC secured the world’s first prosecution for charges related to facilitating underage gambling with in-game items.

On Monday two YouTubers and owners of gambling site FUT Galaxy, were found guilty of offenses under the Gambling Act 2005, by a judge in Birmingham, UK.

Craig “NepentheZ” Douglas and Dylan Rigby were fined a total of £265,000 after the court was shown footage of a 12-year-old boy gambling on the site. FUT Galaxy’s main feature is betting on sports events using FIFA 17 coins (see below).

Note: FUT Galaxy would also deserve to be fined for their awful odds – Betfair Sportsbook had 1.44 on Chelsea and 1.47 on Manchester City. Bookie juice of almost 13% would rank FUT Galaxy as the absolutely worst bookmaker on the internet. The usual juice on 1X2 Premier League bets is between 4% and 7.50%.

“[The] gravity [of the crime] is reflected in the significant financial penalties imposed by the judge,” said UKGC’s Harrison, commenting on the case. “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.’”

In August 2016, the UKGC published a discussion paper setting out its thinking on gambling with virtual currencies, esports and social gaming.

This was prompted specifically by the blurring of lines between some social gaming products and gambling, by technology advances and the expansion of digital or virtual currencies, and by the growth in the market for gambling on eSports, the regulator said.

The paper emphasized that the commission considered gambling with in-game items to be “gambling” in every sense of the word and that all unlicensed operators must “stop or face the consequences.”

The sudden concern expressed by the UKGC in the paper emphasizes, perhaps, the extent to which such gambling markets had, until that point, been permitted to exist and thrive under the radar of regulators.

While Harrison said she was still concerned about these markets, she expressed approval of Valve Corporation’s move to disrupt the multi-billion dollar gambling industry that had grown up around the trading of “skins,” the designer weapons obtained in their video game Counter Strike: Global Offensive, freely available to children.

The UKGC said it would publicize another paper on virtual currencies, eSports and social gaming in the next few months, which will outline its position in greater detail.

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