The UK Gambling Commission (UKGC) is taking enforcement action around NFTs, taking aim at a prominent fantasy football platform with a core offering built around the digital assets.
Sorare, which operates a fantasy sports game based on the Ethereum-blockchain backed NFTs, is being prosecuted by the UKGC. The regulator alleges that Sorare has breached the Gambling Act 2005 by offering an unlicensed gambling offering.
In response, Sorare has strongly denied any allegations. A spokesperson responded with this statement: “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 a fantasy sports platform based around NFTs. The company has signed partnerships with various leagues and clubs, like the English Premier League, to facilitate creation of NFT player trading cards.
Its users then build up fantasy football teams using these player NFTs, and can also trade the NFTs with other users in a similar manner to physical trading cards. The fact that NFTs, as digital assets, can fluctuate in value has caught the attention of some regulators, however.
France’s L’Autorité Nationale des Jeux (ANJ), for example, raised concerns in 2022. Meanwhile, the UKGC stated throughout the two-and-a-half-year review of the 2005 Gambling Act that it would have to consider the role new and novel products like NFTs were playing in betting.
Sorare addressed these concerns in an interview with sports business outlet Insider Sport in May 2022. The firm’s then VP Design, who left the company last year, asserted at the time that ‘we firmly believe that Sorare isn’t a gambling platform’.
“Much like the traditional trading card world I grew up with, we do have collectibles that fans can buy, trade and sell,” he said.
“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 UKGC appears to now be confident that Sorare fits the bill as a gambling platform, though Sorare is also clearly just as adamant that it is not. The hearing will take place on 4 October at Birmingham Magistrates Court at 10am, and the UKGC has stated that it will not comment any further on the case until it concludes.
