The fantasy sports website Sorare.com has an identity crisis, according to the U.K. Gambling Commission. The UKGC wants to determine if playing on the site constitutes gambling. If it does, the company is operating without a license, according to iGaming Business.
Sorare.com is a fantasy football game based around blockchain, where users trade player cards to build teams. Players may enter tournaments and compete for prizes based on performances of the team’s roster. While the platform does not have any clear gambling functionalities, the price of player NFTs can be driven by a team’s performance. In that way, users can engage in speculation based on game performance. NFT venture maintains that although there is an exchange element to its platform, Sorare players can only participate in fantasy football games/leagues by purchasing fixed-price player cards.
The platform’s fantasy football games have no fixed odds outcome, with player prizes allocated by Sorare and not through a betting pool, said SBC News. “At Sorare, fans can celebrate their passion for football in a unique way,” the company said. “By collecting rare NFT cards and playing our global fantasy football game, our community has unlocked a new way to connect with the players and clubs that they love.
Pro footballers Antoine Griezmann, Gerard Piqué, André Schürrle, are investors in Sorare.com.
In response to the Commission’s concern, Sorare released a statement expressing confidence it did not constitute gambling. This has been confirmed by expert legal opinions at every stage since the company was founded, including during a number of fundraising rounds.
Sorare could fall into the category of pool betting or gaming regulated activity under the Gambling Act 2005, according to Richard Williams, gambling, and regulation partner at Keystone Law.
In comments to Gambling Insider, Williams offered his insight on the possible outcomes: “The Commission will no doubt carry out a thorough review of the product, but there is certainly a legal question mark over this. It is possible that the product could fall into the betting (pool betting) or gaming regulated activity under the Gambling Act 2005, depending on how it is structured.”
While everyone awaits the results of the regulator’s investigation into the Paris-based blockchain company, Williams contemplated the worst-case scenario for Sorare, as well as examining the Commission’s motives.
“If it is gambling, it is highly unlikely that the Gambling Commission would issue an operating license to a business which transacts with customers using cryptocurrency, as it is difficult to establish the source of funds of customers,” he continued.
In 2020, Sorare raised $4 million in seed money and this year acquired more than $685 million more, led by SoftBank, according to NFT News Insider.
“When a product with a nascent technology becomes successful, such as Sorare’s digital collectable cards and game, it is normal and expected for there to be regulatory questions,” the company said. “We will always engage and have an open dialogue with authorities who reach out to us to learn more about our game. We believe this is the responsible way to grow our game and community globally.”
The rise of Sorare.com in Britain follows the collapse of Football Index, a site that was based around gambling in the future success of football players. Football Index curtailed activity in March as a result of the collapse of its operator, BetIndex.
