UK Case to decide if Fifa Coins are used for Real Money Gambling

Since the advent of virtual currencies, and more specifically, “virtual commodities”, a very fine line has been drawn between what does and does not constitute real money gambling online. The issue has been highlighted by a UK court trial in which two men have been accused of facilitating illegal gambling, including the advertisement of gambling services to minors.

The two Essex men in question are Craig Douglas (31) and Dylan Rigby (33), a pair of video bloggers who record and upload football game content on YouTube, and at the same time, advertised for the website www.futgalaxy.com; a website where access from UK customers was blocked earlier this year.

Both men were charged with advertising unlawful gambling. Additionally, Douglas was charged with inviting minors to gamble, while Rigby was charged with providing facilities for gambling without a license.

According to the UK Gambling Commission, all counts are direct violations of the Gambling Act of 2005.

Using Virtual Items for Real Money Gambling?

The offences are related to the use of a virtual commodity known as Fifa Coins, which can be purchased or win in the Fifa computer game, and can be used on www.futgalaxy.com, and some other third-party sites, to place bets on virtual football matches and other eSports. The winnings can then be transferred back into the Fifa game.

After being charged in September, Douglas and Rigby pleaded not guilty on October 14. The hearing will begin on February 6, 2017, where the Birmingham Magistrates’ Court will whether or not Fifa coins constitute a virtual currency.

If that’s the case, computer game companies and websites that deal in these virtual currencies would be required by UK law to apply for a regulatory licence from the Gambling Commission, as their activities would fall under the guidelines of real money gambling.

Gambling Commission’s Mind Made Up

The Gambling Commission published a discussion paper in August in which a warning was emitted to operators of internet-based platforms that supply eSports betting where virtual commodities, obtained in game, are used to facilitate wagers. The Commission advised operators that they may require a gambling license to continue their services.

Trading of in-game items that can be bought, won, traded, sold or used were deemed “digital commodities” by the Commission, especially when those items can be “converted into money or money’s worth”. In cases where those items can be gambled with, the Commission defined them as “a form of virtual currency”.

Christopher Rees-Gay of Pinsent Masons, who specializes in gambling law and licensing, and is a prime legal consultant for Out-Law.com, gave his opinion on the matter.

“The crux of the issue is whether in-game items have a monetary value derived from the current market price and can be converted back into real-world money, and whether the court’s interpretation of the Gambling Act accords with that of the Gambling Commission on the matter of virtual currencies,” said Rees-Gay.

“The Commission in its recent discussion paper stated that ‘where ‘skins’ are traded or are tradable and can therefore act as a de facto virtual currency and facilities for gambling with those items are being offered‘ it considers that a gambling licence is required,” he explained, noting that facilitating gambling without a license “is an offence under section 33 of the Gambling Act 2005…”

Rees-Gay called this an “important case”, as it will clear up an existing “grey area” of the law for operators in terms of what does and does not constitute real money gambling where virtual items and currencies are concerned.