Nepenzeth pleads not guilty to gambling offenses

Craig “Nepenzeth” Douglas, and his co-accused Dylan Rigby, are the first people to be prosecuted for gambling offenses related to virtual in-game currencies. (Image: YouTube.com)

A celebrity esports YouTuber has pled not guilty in a UK court to charges of promoting unlawful gambling.

Craig Douglas, known to his 1.3 million subscribers as “Nepenzeth,” and co-defendant Dylan Rigby were charged last month with promoting a lottery and advertising unlawful gambling in relation to the FUT Galaxy site, owned by Rigby. Douglas is also charged with inviting children to gamble.

Much like the skins betting sites that have dominated the news lately, FUT Galaxy permits players of EA Sports’ popular FIFA series of soccer video games to wager using FIFA coins, the game’s in-game virtual currency.

Users are able to transfer their coins for use as betting chips on virtual soccer games, slot machine-style games and lottery jackpot-style games.

The case represents the first time that anyone has ever been prosecuted for facilitating betting with in-game currencies.

Deep Concern from Regulator

The UK Gambling Commission recently declared itself to be “deeply concerned” about the proliferation of unlicensed gambling through sites that use the in-game currencies of video games. It was particularly troubled by the exposure of minors to gambling through these channels, it said.

“We are concerned about virtual currencies and ‘in-game’ items, which can be used to gamble,” said the UKGC in August. “We are also concerned that not everyone understands that players do not need to stake or risk anything before offering facilities for gaming will need to be licensed.

“Any operator wishing to offer facilities for gambling, including gambling using virtual currencies, to consumers in Great Britain, must hold an operating license. Any operator who is offering unlicensed gambling must stop or face the consequences.”

The case has been adjourned until February 6th 2017, when the hearing will take place.

Valve Bites Back Against Washington State

While Douglas and Rigby may be the first to face prosecution, Valve Corp, creators of the game Counter Strike: Global Offensive, are sailing pretty close to the wind.

Two weeks ago, the Washington State Gambling Commission (WSGC) threatened Valve with criminal action unless it ended the transfer of skins through its Steam platform, giving it until October 15 to comply.

The expiration of that date forced Valve to issue a response to the Washington regulator in which it said it was  “surprised and disappointed” that the WSGC has chosen to pursue the matter publicly. It noted it had already taken steps to curb illegal skins gambling and was “open to further cooperation with the Commission.”

However, it also challenged the WSGC to provide “a specific criminal statute or regulation you believe Valve is violating,” adding that it did not have any “business relationship with gambling sites, does not promote them, and does not earn any revenues through them.”

“In-game items, Steam trading, and OpenID have substantial benefits for Steam customers and Steam game-making partners. We do not believe it is the Commission’s intention, nor is it within the Commission’s authority, to turn off lawful commercial and communication services that are not directed to gambling in Washington,” said Valve.