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The “French Tech” star ended up catching the attention of the authorities. BFM Business revealed on July 29 that Sorare, a $4.3 billion company that offers speculative gambling based on the purchase of virtual football cards, has been the target of an alert from the National Gaming Authority (ANJ).
The gambling regulator must meet the managers of the start-up, whose model Mediapart questioned precisely a few days ago. At the center of the discussions: the status of the service offered by Sorare, which could be considered a disguised sports betting platform. These online bets are heavily regulated in France, and their operators must benefit from a specific license, while at the same time controlling the real identity of all their subscribers. They are also subject to heavier taxation and the obligation to implement measures to prevent gambling addiction.
France isn’t the first to wonder: in the UK, the gambling regulator is also wondering about Sorare’s status, and Switzerland has banned the game, awaiting the end of negotiations with the company.
“What Sorare and many players are proposing is a new model that doesn’t fit into any existing framework”, affirmed in response Nicolas Julia, the founder and CEO of Sorare, saying he has “strong legal arguments”while acknowledging understanding the issues and discussing “proactively” with the authorities.
In France, games of chance are defined as operations that can ” to give rise to the hope of a gain that would be due, even if partially, to chance.in exchange for a “financial sacrifice” of the participants.
However, Sorare proposes to buy, through NFTs, cards representing real players, which are then put into competition in virtual tournaments. And the rewards these cards provide scale based on the stats of the actual players they represent. And cards are a speculative asset.
To defend itself, Sorare remembers that it offers a free, no-win competition, accessible to almost 2 million subscribers. It also and above all challenges the notion of “financial sacrifice”since users always remain the owners of their cards, so the amounts invested to buy them are never completely lost.
The arguments of the company’s directors do not seem to move Frédéric Guerchoun, legal director of the ANJ: “We have already received a number of arguments from them, about which we still have serious doubts. We are waiting to see at the beginning of the school year what Sorare representatives will present to us. If this difficulty persisted, we would have to position ourselves”told the World.
We republish our investigation into Sorare, published on July 25, below:
How much are you willing to spend to have a digital image of your favorite football player? How much do you think you can sell in three hours, six months or ten years? These are the questions that have shaken the French Tech planet for a year now, with the financial success of start-up Sorare.
A game of speculation and football, Sorare puts its users in the shoes of a manager who composes teams buying 100% digital football cards at auction, but unique certified by the famous NFT (non-fungible tokens), these titles of ownership of digital objects.
Real-life player performance assigns a score to each card, which allows Sorare managers to earn cash or new cards in virtual competitions held twice a week. And cards can be resold at any time to other participants in an online exchange.
The financial enthusiasm for this novelty seems limitless: it was necessary to pay 619 thousand euros in January to acquire the image of Norwegian striker Erling Haaland, 425 thousand euros for Kylian Mbappé four months later and around 2,500 euros for the goalkeeper of the fifth team of the South Korean championship, Kim Dong-Heon.