Britain’s betting regulator, the UK Gambling Commission (UKGC), has charged football-themed NFT platform Sorare.com with unlicensed gambling.
The UKGC has sought to prosecute Sorare for ‘providing facilities for gambling without holding an operating licence’, in breach of the Gambling Act 2005.
The hearing will take place on 4 October at Birmingham Magistrates Court at 10am. The UKGC has stated that it will not comment any further on the case until it concludes.
A Sorare spokesperson said: “We are aware of the claims made by the Gambling Commission and have instructed our UK counsel to challenge them. We firmly deny any claims that Sorare is a gambling product under UK laws.
“The Commission has misunderstood our business and wrongly determined that gambling laws apply to Sorare. We cannot comment further whilst legal proceedings are underway.”
Sorare’s core offering is essentially a fantasy football platform based around NFTs. The platform’s users collect and trade NFTs of football players to assemble a fantasy football team. The company has partnered with various prominent sports leagues and clubs, like the English Premier League and Italian Serie A, to facilitate creation of these player cards.
However, the fact that NFTs, which in Sorare’s case are built on the Ethereum blockchain, can fluctuate in value has caught the attention of some regulators. Due to this fluctuation in value, there have been discussions as to whether NFTs could be considered a form of gambling.
In November, the firm extended free-to-play access to its platforms in response to concerns by France’s gambling regulator, L’Autorité Nationale des Jeux (ANJ). A few months earlier, the firm’s then-Head of Design – who is no longer with the company – addressed regulatory concerns.
“Sorare is a new and unique product and so understandably regulators may be interested in how it fits into existing paradigms (or not). With that said, we firmly believe that Sorare isn’t a gambling platform,” he said.
“Much like the traditional trading card world I grew up with, we do have collectibles that fans can buy, trade and sell. However, there’s no requirement to pay anything to play the fantasy game and if users do choose to play, they are never at risk of losing their cards regardless of how well they do.
“It’s very important that Sorare is a compelling product for players of all levels. This includes those who just want to play for fun and those who want to own a piece for themselves.”
The Gambling Act 2005, which Sorare is charged with breaching, was placed under review for over two years between late 2020 and April 2023. Part of this review saw the UKGC and policymakers state that new and ‘novel’ products, such as NFTs and virtual reality (VR) could increasingly fall under the scope of gambling regulations. The UKGC now appears to have decided that NFT-backed trading products can indeed be considered a form of gambling.
