Sometimes it’s hard to understand the business model of startups and unicorns. Take Sorare, a French nugget that sells virtual sports cards, all powered by NFT (Non Fungible Token) technology.
At first glance, Sorare’s work can be seen as a digitization of old Panini stickers.
But this is not the opinion of the National Gambling Authority, which wonders if its activities should be classified under the category of gambling and sports betting. This would greatly limit the freedom of action of a young company valued at $4.3 billion. The administration has already warned Sorara about this.
Bet or collectible game?
For its part, Sorare offers to buy through NFT cards representing real players. These cards then participate in free virtual tournaments offered to the service’s two million subscribers. The rewards for these tournaments scale based on the statistics of the real players they represent. And to add to the complexity, maps are a matter of speculation.
Online betting is highly regulated in France. Players in this market must use a certain license and control the identity of their customers and subscribers. The taxation applied to this sector is also heavier and these companies need to take steps to avoid gambling addiction.
Sorare’s defense is simple. “What Sorare offers (…) does not fit into any existing framework,” Nicolas Julia, founder and CEO of the company, explains to Mediapart.
Continuation at the beginning of the school year
Still, bad winds blow not only in France. In the United Kingdom, the gambling regulator is also questioning Sorare’s status. And the platform is banned in Switzerland until the end of negotiations between the authorities and representatives of the company.
Sorare leaders should return to the ANJ at the start of the school year to clarify their position and allow the authorities to rule.
Sorare, launched in 2019, raised the largest fundraiser in French Tech history — $680 million — at the end of 2021.