In a report released today, August 11th 2016, the UK Gambling Commission has outlined its position on skin betting. They state that skins (as commonly referred to in the CSGO community) have a monetary value. The UKGC views them as a “de facto virtual currency” and thus any gambling that uses skins requires the operator to have a license.
Under the Gambling Act 2005, operating a gambling website without a license carries a penalty of up to 51 weeks’ imprisonment or a fine of up to £5,000. It is worth noting that there are 17 provisions in the Act which may be infringed by such a website.
Multiple times has the Gambling Commission stated that virtual currencies are “money or money’s worth” (which dictates that licensing is necessary) and the report sees skins in a similar vein. Thus, such activities constitute what is commonly referred to as real-money gambling for the purpose of regulation.
This follows on from a change to UK licensing conditions released at the end of July 2016 that will formally permit licensed operators to accept digital currencies as a payment method from October 31st 2016 onward. This is assuming that they can still meet their social responsibility and anti-money laundering requirements. As AML involves proving the source of a customer’s funds, which is usually done by providing copies of bank statements, this may be problematic for previously successful skin gamblers who in many cases are unlikely to have had the monetary value of the skins in their bank accounts at any point. Given that many unregulated skin betting websites have closed, they are unlikely to be able to get other transaction histories.
The report makes it clear that providing facilities for gambling without a licence, or an exemption applying, is a criminal offence. The Gambling Commission’s aims are to take action against those operating without a license, particularly where children are at risk, hence the heightened interest in esports despite there being a relatively low level of turnover on it with regulated bookmakers.
They state that they have contacted over 100 unlicensed operators, many of them offering skin betting, telling them to stop offering their services to British customers. Some such websites have had their payments blocked by payment processors.
The Gambling Commission, quite sensibly in CSGOBetting.com’s view, also stated that they see betting on esports matches as the same as betting on any other sport.