Sorare offers what is called a fantasy football game. The player who is registered on Sorare dialsfrom player cards which are NFTs. However Sorare could be considered a platform that offers hidden sports betting according to the National Gaming Authority (ANJ).
According to information from BFM Business, the National Gaming Authority has issued an opinion against Sorare, which will have to prove that it is not a sports betting site.
To understand the allegations made against Sorare, it is essential to go back to how it works: customers can purchase virtual cards (owned by the form of NFT) with different levels of rarity, and tied to a football player to speculate on their growth according to the growth of the reputation of the latter.
Then they use those same cards to participate in virtual tournaments. These tournaments reward players based on map player stats in real matches. For example when they score goals or make an assist. It is this use that reveals the doubts of the ANJ.
“Gambling and gambling are considered and as such all operations offered to the public, under any denomination, are prohibited in order to give rise to the hope of a gain that would be due, even in part, to chance and for which a participants are required to make an economic sacrifice ”specifies article L320-1 of the Internal Security Code.
A definition that could correspond to Sorare’s way of operating, which, for example, recently hired Kylian Mbappé as ambassador and investor according to Frédéric Guerchoun, legal director of Anj.
“For there to be gambling, there must be an offer made to the public, a gain in kind or cash, as well as a financial sacrifice. In our opinion, the financial sacrifice intended by the jurisprudence is an expense. But in the case of Sorare, to participate it is a must to buy the cards”Says Frédéric Guerchoun, comments collected by BFM Business.
This idea of financial sacrifice is not thought of in the same way by Sorare who defends the functionality of his platform.
“As the current laws stand, our analysis is that Sorare falls outside the scope of gambling regulations. […] On Sorare there is no notion of stakes or financial sacrifice, depending on a sporting event. When a Sorare card is played in our fantasy game, it is never lost. This card can be played once or 500 times, in the first season as well as in the tenth, ”defends Sorare, to BFMTV.
For Sorare, this risk could be a significant threat. French law prohibits gambling, but there are some exceptions such as sports betting and casinos. If purchasing virtual cards for the purpose of winning money on sporting events is classified as sports betting, Sorare must apply for the approval of the ANJ to become an authorized online operator such as The Bet, Winamax and others.
In addition to having to deal with the burden of taxation, Sorare should determine the identity of each user, and block access to minors (which already happens according to its methods of use). This could have serious consequences on the number of active users of the site in France, but open the door to restrictions in other countries, particularly in Europe where gaming legislation is starting to be standardized.