Posted on: February 18, 2022, 07:32h.
Last updated on: February 18, 2022, 10:42h.
Blockchain-based fantasy soccer platform Sorare is among the companies shortlisted by the English Premier League for its first NFT (non-fungible token) partnership.
But a deal would raise eyebrows, because the UK Gambling Commission is currently “carrying out enquiries” into the French company’s business model. While it has not launched an official investigation, the regulator is trying to determine whether Sorare’s services require a pool betting license, as is the case with traditional fantasy sports models.
The EPL is eager to cash in on the red hot NFT market. NFTs are digital tokens that can represent ownership of a virtual item, such as sports trading cards or a work of art. Each NFT is unique and cannot be duplicated, because ownership is tracked on the blockchain, the digital ledger of transactions that underpins cryptocurrencies like bitcoin.
What is Sorare?
Sorare is the darling of this fast-evolving new space, recently receiving a $680 million cash injection led by SoftBank. That will have caught the attention of EPL chiefs, as will a deal signed in September between Sorare and Spain’s La Liga.
The terms of the La Liga deal were not disclosed, but it is reportedly long-term and exclusive, with the league receiving royalties on the sale of NFTs tied to its players.
Sorare currently has more than 500,000 registered users and expects to generate at least US$200 million in transactions by the end of the year.
The company earns revenue by issuing and selling new trading cards. Users can simply collect cards, or they can add them to a “team” of players to earn points based on real-world performances. These teams complete in leagues and tournaments to win non-cash prizes.
It’s this fantasy sports aspect that interests the gambling commission. The regulator is treading carefully, as it has in the past been accused of being slow to react to new technological trends.
Pending its findings, the UKGC has warned UK consumers to “proceed with caution,” because Sorare does not have a gambling license.
Sorare says it does not need one because its games are free to play and don’t pay out in cash. But of course, players must first buy a team before they can enter a competition.
Deal Could Be Worth $590M
A spokersperson for Sorare told Casino.org Friday 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,” the spokesperson added.
The DM reports that the bids for the EPL NFT partnership range from £220 million (US$299 million) to £434 million (US$590 million) over four years. This dwarfs deals recently signed by the NBA and the NFL with Dapper Labs, which are estimated to be worth US$20 million a year each.
Dapper Labs is also in the running for the EPL deal, as is Candy digital, which has already partnered with MLB. New York-based ConsenSys is also in the mix.