Ethereum NFT Game Sorare Investigated by UK Gambling Commission
The U.K. Gambling Commission announced that it is investigating Ethereum NFT-driven fantasy soccer game, Sorare.
The investigation seeks to determine whether Sorare needs a gambling license to continue operating in the United Kingdom.
Sorare, an Ethereum-based fantasy soccer game built around NFT digital trading cards, has come under scrutiny by the United Kingdom’s Gambling Commission, which is investigating whether the game requires a gambling license—which it does not currently hold—to continue operating in the country.
The U.K. Gambling Commission posted a statement on Friday, writing, “The Gambling Commission is currently carrying out enquiries into the company to establish whether Sorare.com requires an operating licence or whether the services it provides do not constitute gambling.”
Sorare lets players buy and sell officially-licensed digital trading cards featuring players from more than 100 soccer teams from around the world, including clubs like Juventus FC and Paris Saint-Germain FC. Each card is sold as a verifiably scarce NFT, which acts like a receipt for any kind of rare digital item.
Unlike fellow licensed NFT project NBA Top Shot, however, Sorare also includes a fantasy sports element to it. Users can build weekly lineups using their cards and compete against other Sorare users, earning points based on the real-world performance of their respective players. The top players in each cycle can win free cards or even Ethereum cryptocurrency rewards.
The U.K. Gambling Commission’s statement suggests that Sorare’s approach may constitute gambling in some form, and it is exploring whether or not to require the company to obtain a license to continue operating in the country.
According to its statement, the commission will not comment further until its investigation is complete. Sorare, for its part, does not believe that its service requires a gambling license.
“When a product with a nascent technology becomes successful, such as Sorare’s digital collectable cards and game, it is normal and expected to be regulatory questions,” the firm wrote in a statement posted today. “We are very confident Sorare does not offer any forms of regulated gambling.”
“This has been confirmed by expert legal opinions at every stage since the company was founded, including during a number of fundraising rounds,” it continued. “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.”
Sorare recently raised a $680 million Series B funding round at a valuation of $4.3 billion, and the game counts notable investors such as social media influencer and NFT entrepreneur Gary Vaynerchuk, as well as Reddit co-founder and Seven Seven Six founder Alexis Ohanian.
Alongside last month’s funding, Sorare announced significant growth initiatives, including plans to open a United States office, add women’s soccer teams, and expand its NFT-based brand into additional sports.