By Dominic Marius Markham
How will regulators approach new technologies and new business models in the future? This is the question on everyone’s lips, and it’s a question no one really has an answer for.
The Gambling Commission faced a unique problem when they encountered Football Index, which functioned more like a stock exchange than any type of traditional sports game.
When the company collapsed, its players were left out for thousands of pounds, leading many to criticize the Commission for a heavy response and a fundamental misunderstanding of how the website works.
But according to the watchdog’s new CEO, Andrew Rhodes, it’s the UK regulatory framework that has crippled the organization more than anything else.
Rhodes took to the watchdog’s blog to answer questions from the public about the case, addressing a range of issues.
In one of its responses, the executive argues that the Football Index’s most controversial feature, the speculative nature of its user-to-user betting transactions, was not covered by the Commission’s scope.
“The ability to sell bets / shares between users was something the company put in place immediately, but it did so without any authorization. This is a feature which does not fall under the regulation of games of chance and it is something that the Commission would be likely to refuse and had done before, ”noted Rhodes.
“The Commission is not in a position to continuously monitor gambling operators and that is not what the regulatory framework or the funding model was designed for.”
The Commission is not in a position to continuously monitor gambling operators and that is not what the regulatory framework or the funding model was designed for.Andrew Rhodes, CEO of the Gambling Commission
As the CEO sought to reassure the public that the regulator is reworking its ‘new product’ approach, it’s hard to imagine how well the watchdog will be able to respond to some of the new developments underway.
Although the Commission has given little indication of what its reworked approach might entail, a recent incident suggests that the regulator is looking to play a more proactive role.
In the wake of the Football Index drama, the Gambling Commission warned fantasy football site NFT Sorare.com when it warned customers against using the platform, while launching an investigation to determine whether or not the company’s digital collectible card game was a game.
Football Index was a different take on a proven financial model, but Sorare represents a whole new frontier for the industry, pioneering some of the latest breakthroughs in blockchain technology while the rest of the gaming industry still grapples with crypto. -cash. .
Obviously, the Commission has recognized this, but as long as Sorare’s services exist outside the working definition of the sports betting and gambling regulator, then it is virtually powerless to do anything other than issue warnings.
The watchdog’s social responsibility and anti-money laundering rules are built with more traditional forms of funding in mind and crumble very quickly in the face of crypto and other blockchain-derived technologies.
The Gambling Act, the legislation that first created the Commission, was enacted in 2005, four years before Bitcoin was even a thing, and despite attempts by the government and regulator to fix the problems posed by crypto currencies, there is no specific UK law referring to digital tendering.
However, according to Rhodes’ final blog summary, the Commission is looking to leverage the upcoming gaming law review to strengthen its ability to respond to an “ever-changing environment”.
“As an accountant, I take responsibility for the Commission and the actions we take as a result of what has happened and there are already a lot of things we are doing differently; and there are things that will be part of our advice in response to the review of the gambling law, ”he concluded.