## Sorare: Navigating Regulatory Terrain – Technology & Advancement – iGB
Sorare has modified its operational framework in France, and the gambling oversight body ANJ is still evaluating if it aligns with their regulatory criteria, reports Jack Pollard. However, recent reports indicating the French government is crafting new regulations for Web3 trailblazers underscore the industry’s significance to French authorities.
**Homepage > Technology & Advancement > Sorare: Navigating Regulatory Terrain**
**Sorare: Navigating Regulatory Terrain**
Sorare has declared in a Medium publication that it has revised its product roadmap as a “temporary resolution.”
This choice was made “in accordance with directives from the French National Gambling Authority [l’Autorité National des Jeux (ANJ)] which established an alternative entry option for French users.”
In essence, Sorare has introduced free-to-play access for French participants in their fantasy sports leagues. Notably, the French version of the company’s announcement, unlike the English text, mentions that this new entry option will be available for players “without blockchain cards.”
**A Reflection of Regulatory Scrutiny**
In general, Sorare’s adjustment is a reflection of the regulatory scrutiny the organization has faced from the ANJ for over a year.
In December, iGB explained that the group functioned by issuing virtual player cards as NFTs, which players acquired on the Ethereum platform and utilized to construct their own fantasy teams.
The execution of athletes on the pitch influences the worth of the playing pieces, which can fluctuate. These pieces can also be exchanged on Sorare’s digital market.
The effect of real-world athlete performance on card value, mirroring the win-loss factors in sports wagering, has caught the attention of the ANJ.
As part of ongoing communication between the two entities, the ANJ has requested that Sorare provide players with a more readily available free-to-play option and give them an equal chance of winning, regardless of whether they pay to participate.
The group’s update deadline was March 31st, but was later extended to May 26th.
**New Game Mode**
Sorare’s new mode allows French players to participate in contests without having to purchase NFT/blockchain cards. ANJ President Isabelle Falque-Pierrotin told Le Echo that this option “eliminates the concept of financial sacrifice (wagering), which is one of the criteria considered for real money games.”
She added that if Sorare doesn’t adjust its model, it could be blocked by the ANJ.
However, further examination of the news raises more inquiries, such as:
“If French users opt to use this new method in any given game week, they cannot submit a different lineup in the same game week that includes NFT-backed cards they possess.” Sorare told iGB.
**Sorare Awaits ANJ Decision**
The second matter is significant;
As a French firm, France is likely one of Sorare’s largest markets. As a French firm, France is likely one of Sorare’s largest markets. According to its reply, existing account holders can decide to play with their NFT/blockchain cards or with a free mode. This indicates that Sorare can continue to profit in a nation that could be a major source of income for them.
This means that Sorare can continue to profit in a nation that could be a major source of income for them.
“This most recent update is a free-to-play option for all French users,” Sorare explained. “This includes existing Sorare account holders and new users, as long as they are in France and have registered a phone number and shared appropriate documentation to confirm their residency in the nation.”
“This most recent update is a free-to-play option for all French users,” Sorare explained. “This includes existing Sorare account holders and new users, as long as they are in France and have registered a phone number and shared appropriate documentation to confirm their residency in the nation.”
However, the group will have to wait and see if the ANJ is content with the new setup. The regulator told iGB that it has taken note of Sorare’s new measures, but “has not yet validated any operational solutions,” beyond the principle that the free-to-play option must offer the same chances of winning as the real-money products.
However, the group will have to wait and see if the ANJ is content with the new setup. The regulator told iGB that it has taken note of Sorare’s new measures, but “has not yet validated any operational solutions,” beyond the principle that the free-to-play option must offer the same chances of winning as the real-money products.
Now, it will take time to assess Sorare’s new solution, but it did not provide a timeframe for when it will release its opinion, stating whether it meets its regulatory standards.
Now, it will take time to assess Sorare’s new solution, but it did not provide a timeframe for when it will release its opinion, stating whether it meets its regulatory standards.
Web3 Legislation
It remains to be seen whether the ANJ will be satisfied with Sorare’s adjustment to its operating model in this key market. While the group continues to operate in this grey area and hopes its compromise will work for the ANJ, given recent tech news, it may be that the idea of buying time has taken on a new meaning.
Web3 Legislation
It remains to be seen whether the ANJ will be satisfied with Sorare’s adjustment to its operating model in this key market. While the group continues to operate in this grey area and hopes its compromise will work for the ANJ, given recent tech news, it may be that the idea of buying time has taken on a new meaning.
Indeed, the French administration is crafting a strategy to establish guidelines for Sorare and other Web3 enterprises that operate platforms known as “games of interchangeable digital assets,” as per a recent report in Les Echos.
This strategy will encompass companies like Sorare, Socios, or Binance, but it won’t place them under the same regulatory structure as conventional real-money gambling firms.
Under the proposed rules, these businesses won’t require a permit from the ANJ. They will be exempt from the gambling gross revenue tax imposed on real-money operators, but they will be subject to a 20% value-added tax on the sale of digital products.
There are disagreements regarding the regulation of the gambling sector.
According to media accounts, French gambling groups have mixed views on these proposals.
Lottery operator Française des Jeux desires Sorare and similar ventures to be treated as real-money operators for tax purposes. Land-based casino groups are primarily focused on online casino regulation (they submitted a draft law to the French Parliament last week). Sports betting firms are reportedly divided on these proposals.
Tax officials have submitted their analysis to the French Ministry of Finance, which will assess it and propose a draft law, according to Les Echos.
News of the new regulations isn’t unexpected. In recent years, France has been striving to become a leading hub for European technology and international startups.
As a leading Web3 company, Sorare exemplifies this trend and appears to have the backing of the French government’s top officials.
🇫🇷 Constructing the technological giants of tomorrow. Our president, our administration, modified the rules of the game to release a wave that will generate 100,000 jobs and significant value. Web3 and sports will be at the forefront. I had the opportunity to discuss this with @EmmanuelMacron. pic.twitter.com/PjUgatJ8xL [@EmmanuelMacron](https://twitter.com/EmmanuelMacron?ref_src=twsrc%5Etfw)
— Nicolas Julia (@ni2las) December 8, 2022 [December 8, 2022](https://twitter.com/ni2las/status/1600802524709392384?ref_src=twsrc%5Etfw)
Digital Games
Sorare does not categorize its players by nation, but it has 3 million registered users worldwide and has generated approximately $300 million in sales over the past year, according to its website.
Compare these figures to the broader French online sports betting industry, where ANJ-licensed operators reached a record high in 2022, with total betting revenue increasing 2.5% to nearly €1.4 billion, with €8.3 billion in wagers, largely due to the Qatar World Cup, which itself generated €597 million in wagers.
The ANJ noted in its annual report that the industry is stabilizing after the pandemic-driven surge in 2021.
However, it now largely depends on how the ANJ views Sorare’s new free-to-play setup in France and whether it will approve it.
It would be truly fascinating to discover the details of the conversation between ANJ and the leading French government figures.
It’s thrilling to contemplate the regulations the government will establish for businesses that provide “digital asset trading games.” Sorare must be delighted with these new guidelines.
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