Two men have become the first to be charged under UK gambling laws for promoting gambling with a videogame currency on YouTube. Craig ‘Nepenthez’ Douglas, 31, and his off-screen business partner Dylan Rigby, 33, have been charged at Birmingham magistrates' court with promoting a lottery and advertising unlawful gambling, while Douglas also faces the charge of inviting children to gamble.
The pair own a handful of websites which allow betting with FIFA coins – a currency which is normally generated in the ‘Ultimate Team’ mode by winning matches or tournaments, scoring goals, selling players or finding them dropped in packs. Among the websites the pair run is futgalaxy.com, which has been taken down in the UK. However its Spanish version, futgoles.com, is identical in all but language and is still available, showing a countdown to the release of FIFA 17.
The sites let you bet your coins in various ways. In this video a YouTuber explains how the futgalaxy.com site works by placing bets on real world football matches. The coins can then also be bought or sold for real money on other websites using PayPal or Bitcoin. Rigby, one of the men charged with unlawful gambling, is also the director of a website which allows players to buy and sell their coins - ultimatecoinexchange.com. Together the two men are mutual directors of Game Gold Tradings Limited.
Douglas, who makes videos as Nepenthez on YouTube and boasts over a million subscribers, previously made videos about the betting website which he ran. In the linked video he says “there is a website called futgalaxy.com” and continually refers to the website as “they”. At no point does he disclose he is the co-owner of the website. He goes on to play against another broadcaster, AA9skillz, who posted his own video about the betting website.
The betting websites in question are listed under a parent company called GameWager International Corp, which is based in San Jose, Costa Rica (as pointed out by another YouTuber HonorTheCall). This also runs a gambling website for Counterstrike: Global Offensive called CSGOFantasy.com, which has also been taken down. Costa Rica is known as having friendly tax law for offshore companies as well as high degrees of privacy. Offshore companies are not required to disclose even the names of the owners to the country's registrar of companies, according to Investopedia.
The prosecution was brought by the Gambling Commission, who have been investigating gambling with videogame currencies and the YouTubers who have been taking part in this activity, following the controversy over CS:GO betting sites and their owners TmarTn and Syndicate.
"We are paying close attention to the growing popularity of virtual or 'in-game' items, which can be traded, sold or used as virtual currencies to gamble," a spokesperson for the Commission told our close pals Eurogamer.
"If GB-based players are being invited to gamble with money or money's worth then this requires an operating licence.”
The case has been adjourned until October 14