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 | ��