Sorare Faces Legal Challenge in UK Over Alleged Unlicensed NFT Gambling

• Sorare charged with unlicensed gambling over its NFT-based fantasy sports platform.  
• UK Gambling Commission’s first legal action against a blockchain-based operator.  
• The case could set a precedent for future Web3 and NFT regulations.

Sorare, the fantasy sports platform known for using NFTs, has been charged by the UK Gambling Commission for offering unlicensed gambling services. This marks the first time the UK regulator has taken legal action against a blockchain-based company, potentially influencing future regulations in the Web3 and NFT space. 

Sorare’s platform allows users to buy and trade digital cards of athletes, which are represented as unique NFTs, in connection with major sports leagues such as the English Premier League and Germany’s Bundesliga.

The case comes after a three-year investigation initiated in 2021, during which the Gambling Commission examined whether Sorare’s operations required a gambling license under UK law. The platform’s involvement in fantasy sports leagues and NFT trading raised concerns about whether these activities constituted gambling. 

According to the commission, Sorare is charged with violating Section 33 and Section 36 of the UK’s Gambling Act 2005 by offering gambling facilities without an appropriate operating license.

Sorare has been ordered to appear before Birmingham Magistrates’ Court on October 4. This legal action could set a critical precedent in how Web3 and blockchain companies are regulated in the future.

The UK has ramped up enforcement against unregulated crypto activities, with recent actions targeting unlicensed crypto ATMs.

The company Sorare from Saint-Mandé, France, refutes all the allegations and claims that its offering is not a gambling platform under the definitions of the English and Welsh laws.

The company has suggested that the Gambling Commission failed to understand its operations mode and applied wrong legal measures to it. 

This is a typical action by UK authorities who have recently been tightening their measures against activities that are considered to be possibly illegal in the sphere of digital assets. The decision made in this case, may point to what is to be expected as regulators sit down to review future blockchain and NFT platforms.