- The French National Assembly approved the “Sorare Law” under the Digital Space Regulation Law.
- The decision received a majority vote, with 437 members in favor, but faced opposition from 77 members.
- Karima Lachgar, CEO of Olky Wallet, recognizes the law’s potential to bring credibility to the crypto gaming sector.
The French National Assembly endorsed the “Sorare Law” as part of the broader Digital Space Regulation Law (SREN). The landmark decision, which witnessed a favorable vote from 437 of the 561 members, introduces a pioneering regulatory landscape for video games utilizing Non-Fungible Tokens (NFTs) and crypto-monetization avenues. The decision, however, hasn’t resonated well with everyone, as 77 members opposed its adoption.
The legislation, coined as the “Jonum regime” for games with monetizable digital objects, delicately balances the scales between stimulating French startup innovation and fortifying user safety. With this enactment, a clear legal distinction is drawn for Jonum, distinguishing it from conventional video games and gambling.
Karima Lachgar, the CEO of Olky Wallet, noted the potential of SREN to lend credibility to a rapidly evolving sector, which has, in the past, been marred by scams. But the journey isn’t over. The legislation awaits scrutiny from the Constitutional Council, which possesses the power to either endorse or dismiss it. This is a turn of events some assembly members eagerly anticipate.
Interestingly, critics argue the law may inadvertently favor crypto games over online casinos. Karima Lachgar, reflecting on the implications, hinted at the likelihood of betting platforms transitioning to the play-to-earn and Web3 domain, much like the state-run Pari Mutuel Urbain. The latter has already made inroads into the crypto realm with its fantasy horse racing game, Stables.
Historically, French regulators believed that assets in crypto games fulfilled most criteria defining gambling. This put popular games, like Sorare and Stables, in jeopardy of being categorized as gambling ventures. Such classification brings with it hefty tax implications. Under the new law, however, the onus of ensuring compliance falls on the Autorité Nationale des Jeux (ANJ), the French National Gambling authority. Consequently, crypto game platforms will mandate age declaration during account creation and ascertain player identity upon in-game earnings withdrawals. Notably, initial registration won’t demand identity verification.
Moreover, the Jonum regime offers clarity on promotional strategies involving Web3 games and influencers. The directive explicitly bans the engagement of influencers for campaigns on platforms accessible to minors. This implies that popular platforms like YouTube might still be in the clear for promotional activities.