A fantasy football site promoted by the Premier League is set to appear in court over allegations that it provides ‘unlicensed gambling’ to its members.
Sorare, which is an official partner of the English Premier League, allows users to create their own football team using NFT cards.
However, the Gambling Commission contests that their business model, which sees customers buy cards with real money in a bid to win cash prizes and VIP experiences, is akin to gambling. The value of each player card can rise or fall based upon their performances on the pitch.
And so the regulator will tell a hearing at Birmingham Magistrates’ Court on October 4 that Sorare are ‘providing facilities for gambling without holding an operating licence.’
Legal Battle
Although the regulator has refused to comment in more detail on the case, they have confirmed the outcome of an investigation that began as long ago as 2021.
The Gambling Commission will cite section 33(1), (4), 36(3) and (3A) of the 2005 Gambling Act in their planned prosecution of Sorare. Those statutes make it illegal for anyone to offer a ‘gambling service’ without the requisite UK operating licence, which Sorare nor any of its subsidiaries have.
Section 36 of the Gambling Act confirms that a company doesn’t even have to be based in the UK to fall foul of the law, just as long as their services are ‘knowingly’ used on UK soil – Sorare, a French firm operating in Britain, would satisfy such requirements.
Sorare, which is said to be worth more than £3 billion, has an official four-year licensee agreement with the Premier League to offer its games using the EPL’s branding and image rights through to 2027. They also have a presence in European football and with other brands like the NBA and Major League Baseball.
A spokesperson for Sorare commented:
“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 commission has misunderstood our business and wrongly determined that gambling laws apply to Sorare.”
Interestingly, France’s gambling regulator the ANJ also began an investigation into Sorare’s platform back in 2021. The company, fearing legal action, voluntarily agreed to amend its rules in order to ward off the threat of court action.
Under the terms of section 33(4) of the Gambling Act, anyone found to be offering an unlicensed gambling provision to UK based customers can be fined, imprisoned or both – meaning that any guilty verdict would likely be the most significant outcomes of any case brought by the regulator.
Indeed, it’s thought that they have only used their prosecutorial powers once before to challenge an accused party in court. That case, involving corruption in greyhound racing, saw Christopher Mosdall imprisoned for four months for ‘drugging’ two of his dogs in order to manipulate the outcome of races.
Social Casino Ads Banned Over ‘Misleading’ Content
The definition of what is, or isn’t, gambling could yet land Sorare in hot water.
So-called social casinos have also experienced a similar kickback from regulators, with five different sites banned from using advertisements that suggest players can win real money prizes.
The Advertising Standards Authority (ASA) has pulled the plug on ads published by Dataverse Co, Huuuge Global Ltd, Mobee Co, SpinX Games and Zeroo Gravity Games over the ‘misleading’ claims made.
The adverts, which appeared on TikTok, were canned after giving a ‘misleading impression that people could win real-world money or tangible prizes through gameplay when this wasn’t the case.’
In each case, the casino was forced to admit that players could not win real-world money, or prizes with monetary value, as a result of playing via their app.
The challenge facing the definition of social casinos is that some allow their players to buy virtual currency with real money, which then becomes a grey area as to whether this should be defined as gambling or not. Some of the games they offer take place on a slot machine, with a backdrop that mimics that of a casino.
The ASA believed that each casino app did not do enough to reiterate that such gaming is ‘social’ in nature, and that no cash prizes are available.
Like Sorare, you wonder how long it will be before the Gambling Commission cracks down on such a grey area of gaming/gambling.