Posted on: September 27, 2024, 11:41h.
Last updated on: September 27, 2024, 11:44h.
The UK Gambling Commission (UKGC) has charged multibillion dollar fantasy soccer outfit Sorare with illegal gambling in an extremely rare instance of the agency exercising its prosecutorial powers.
The charges are the culmination of a three-year UKGC investigation into the Paris-based company, which is promoted by the English Premier League (EPL) and licensed to sell digital sports cards of players from all 20 of the league’s teams. The deal is rumored to be worth US$40 million a year to the EPL.
Sorare enables its users to buy and sell soccer playing cards in the form of NFTs. Users are encouraged to compile fantasy teams, which can rise or fall in value depending on players’ real-world performances.
Teams that score high on the leaderboard can receive cash rewards and other prizes, such as tickets to games and signed jerseys.
NFT Frenzy
The regulator launched its probe in 2021 at the height of the now-subsided NFT frenzy. Sorare was the darling of the new space. The platform had just received a US$680 million cash injection led by SoftBank.
Today, Sorare is valued at US$4.3 billion, employing 160 people in New York and Paris. It claims to have 3 million users in 180 markets
Sorare told Casino.org in 2021 it had “received extensive legal advice from several leading law firms.” The company “strongly believes” its services or promotions to users “are not gambling in the UK or in any other jurisdiction in which we operate,” it added.
Sorare ‘Not a Gambling Product’
In the UK, fantasy sports and daily fantasy sports sites played for real money are required to apply to the UKGC for a pool-betting license. Sorare has no such license, and it reiterated its belief Friday that it does not need one.
“We are aware of the claims made by the Gambling Commission and have instructed our UK counsel to challenge them. We firmly deny any claims that Sorare is a gambling product under UK laws,” the company said in a statement.
The commission has misunderstood our business and wrongly determined that gambling laws apply to Sorare. We cannot comment further whilst legal proceedings are under way,” Sorare added.
An announcement posted Thursday on the UKGC website states that Sorare was “charged with providing facilities for gambling without holding an operating license,” contrary to the 2005 Gambling Act, without expanding.
An initial hearing will take place at 10 a.m. on 4 October at Birmingham Magistrates’ Court.
Sole Previous Prosecution
The UKGC has only used its prosecutorial powers once before. That was in 2015 when Wimbledon-based greyhound trainer Chris Mosdall was successfully prosecuted for race fixing.
Mosdall had been secretly recorded by undercover BBC journalists boasting that he regularly drugged greyhounds in order to fix matches and that he was “the biggest crook in Wimbledon.”
He was imprisoned for four and a half months.
