Sorare.com, a blockchain-based fantasy sports company, is due to appear in Birmingham Magistrates’ Court, facing charges of providing unlicensed gambling facilities to consumers in the U.K. This is the first prosecution of its kind involving a Web3 platform by the U.K. Gambling Commission.
Charges Under the Gambling Act 2005
Sorare faces accusations of violating sections 33(1), (4) and 36(3), (3A) of the Gambling Act 2005, which mandate that operators must hold a license to offer gambling services to U.K. consumers. The company’s blockchain-based platform allows users to buy, sell, and trade non-fungible tokens (NFTs) representing player cards, enabling participants to build fantasy sports teams for soccer, basketball, and baseball. With partnerships with major sports leagues such as the English Premier League and Germany’s Bundesliga, Sorare’s platform has gained significant traction among sports fans and collectors.
Sorare’s Denial of the Charges
The case follows nearly three years of investigation by the Gambling Commission, which began scrutinizing Sorare’s operations in 2021 to determine if they required a gambling license. Sorare maintains that its business model does not fall under the scope of U.K. gambling regulations.
In response to the charges, a Sorare spokesperson stated,
“We firmly deny any claims that Sorare is a gambling product under U.K. laws. The Commission has misunderstood our business and wrongly determined that gambling laws apply to Sorare.”
The company argues that its NFT-based fantasy sports game operates as a collectible and strategic entertainment experience rather than a gambling product.
Potential Implications for the Web3 Industry
The charges against Sorare could have broader implications for the regulation of blockchain-based platforms and the Web3 industry in the U.K. As the first regulatory action against a blockchain platform by the Gambling Commission, the outcome may signal how regulators plan to handle similar cases in the future.
The U.K. has already demonstrated a stricter stance towards the crypto sector, previously targeting unregulated crypto ATMs in enforcement actions earlier this year. This case against Sorare could further shape the landscape of digital assets and NFT-based gaming in the country, potentially leading to increased scrutiny for other platforms that incorporate elements of chance and value transfer in their offerings.
What Lies Ahead for Sorare?
The upcoming hearing will determine if Sorare’s operations will require compliance with gambling laws or if the company can continue to operate without a license in the U.K. If found guilty, Sorare may face substantial fines and restrictions on its activities in the country, potentially impacting its partnerships with high-profile sports leagues and its broader market operations.
The Gambling Commission has declined to comment further until the case’s conclusion, leaving many in the blockchain and gaming industries to speculate on the implications of this legal battle. As the hearing approaches, the outcome could reshape the understanding of fantasy sports and digital collectibles under U.K. law, influencing both Web3 businesses and the regulatory approach towards emerging technologies.