Sorare Faces Regulatory Scrutiny in the U.K. for Unlicensed Gambling

Sorare, a prominent player in the fantasy sports industry, has recently come under fire from the U.K. Gambling Commission. The regulatory body has charged the company with providing unlicensed gambling facilities, marking a significant move as it represents the first action taken against a blockchain-based platform in the U.K. This charge raises important questions about the status of blockchain gaming and how regulators view these innovative platforms.

Founded in Saint-Mande, France, Sorare operates fantasy sports games that encompass popular sports such as soccer, basketball, and baseball. Participants in these games can buy, sell, and trade collectible cards represented as non-fungible tokens (NFTs). These NFTs are unique digital assets that signify ownership of a specific item or piece of content, and they have gained immense popularity in the realms of art, music, and gaming.

Sorare has established partnerships with notable sports organizations, including the English Premier League and Germany’s Bundesliga, which has helped to elevate its status in the fantasy sports market. However, the U.K. Gambling Commission’s inquiry, which has lasted nearly three years, has led to the assertion that Sorare is operating without the necessary gambling license required under U.K. law.

According to the Gambling Commission, “Sorare is charged with providing facilities for gambling without holding an operating licence.” This statement underlines the regulatory body’s position that the activities offered by Sorare may fall under the definition of gambling, even if the company asserts otherwise. The case is set to be heard on October 4 at Birmingham Magistrates’ Court, where Sorare will have the opportunity to defend its business model.

The inquiry from the Gambling Commission began in 2021 when regulators sought to determine whether Sorare’s operations necessitated a gambling license. This ongoing scrutiny reflects a growing concern among regulators regarding the intersection of blockchain technology and gambling, particularly as the popularity of such platforms continues to rise.

The outcome of this case is particularly significant as it may set a precedent for how regulators approach other blockchain-based platforms in the future. As the gambling landscape evolves with the introduction of digital currencies and blockchain technology, regulatory bodies may need to adapt their frameworks to account for these innovations.

In response to the charges, a Sorare spokesperson firmly denied the claims, stating, “We firmly deny any claims that Sorare is a gambling product under U.K. laws. The Commission has misunderstood our business and wrongly determined that gambling laws apply to Sorare.” This statement highlights the company’s belief that their platform operates within legal boundaries and does not constitute gambling as defined by existing laws.

Furthermore, the case is emblematic of a broader trend in the U.K. where regulators are intensifying their enforcement actions against suspected illicit activities in the cryptocurrency and blockchain sectors. This follows recent operations targeting unregulated cryptocurrency ATMs, indicating a proactive approach to maintaining regulatory oversight in the rapidly evolving digital landscape.

As the hearing date approaches, the industry will be watching closely to see how the U.K. courts interpret the application of gambling laws to blockchain-based platforms like Sorare. The implications could be far-reaching, potentially influencing not only Sorare’s operations but also the future of blockchain gaming and NFTs in regulated markets.