Sorare will have to justify his activities to certain French regulators, despite the existence of a certain legal vagueness regarding crypto regulation.
A lack of diet for Sorare?
Regulatory hold on crypto could expand over the years. Although the MiCa law has not yet been introduced and France still manages the industry under its own regime, certain activities are of interest to the authorities. Since the beginning of October, the French start-up Sorare has been talking about it again with the Senate following a magistrate’s report.
Christine Lavarde, Member of the Senate and Vice-Chairman of the Finance Committee, has indeed questioned the place the fantasy football platform should have, both in France and within crypto. According to her, its activity could be linked to sports betting, which is currently subject to strict regulation. However, Sorare is not under the control of the latter or that of crypto.
Nevertheless, the criteria for sports betting as defined by Article L.320-1 of the Internal Security Code appears to be met: in any case, to raise hopes of a profit which, even in part, would be due to chance and which would require a financial sacrifice on the part of the participants”.
Excerpt from Christine Lavarde’s petition regarding Sorare in the Senate
The question had already been asked this summer since the National Gaming Authority asked the French unicorn to prove that it does not offer sports betting, otherwise it would have to submit to the regulations regulating this type of practice. Sorare then replied that it didn’t fall into this category as his platform didn’t have the idea of betting. When users buy cards, they do not speak about the outcome of matches and are content to fight among themselves through their teams. The money spent would then be on the side of the NFTs and it would therefore be the crypto regulation that would take precedence over the others.
Towards an evolution of crypto laws?
However, Sorare’s status remains unclear. If, in his opinion, the platform does not meet the criteria for sports betting, then it is far from having to comply with European crypto regulations. Indeed, the latter do not include NFTs or cryptocurrency-based games. A real headache for the French government, as Grégory Raymond points out in an intervention for BFM Crypto.
France could be the first country to reclassify Sorare and NFT as gambling.
Excerpt from Grégory Raymond’s intervention for BFM Crypto
As the framework of the crypto sector gets closer and closer and authorities around the world fury in the face of crypto casinos and gambling to win them, Sorare could push France to set up a new system for regulating NFTs. The government willing to invest in it may see new laws to regulate the market of non-perishable tokens and the activity of the French unicorn. So we can expect some specially written rules to frame fantasy football. As for the European Union, it could be forced to change its MiCa law sooner than expected in light of the authorities’ need to monitor NFTs.
All information on our website is published in good faith and for general information purposes only. Any action the reader takes based on information on our website is entirely at their own risk.