Gambling Commission Mocked Over Sorare Warning
Last updated: October 12, 2021 by Leon Marshal
The UK gambling regulator has faced a backlash over its warning over a new NFT start-up Sorare. The Gambling Commission warned potential customers that the new venture is unlicenced to offer gambling products in the UK.
Football Index Customers Attack Regulator Over NFT Warning
Customers who lost out due to the collapse of Football Index have acted with hostility towards the Gambling Commission after the regulator urged caution to consumers thinking of using a heavily-backed fantasy football NFT platform.
The regulator issued a warning about the French tech outfit Sorare, which has hired igaming executives from BetMGM and DraftKings to their platform, allowing users to trade digital collectables based on global football players. The UKGC issued a ‘consumer information notice’. The regulator, based in Birmingham, said it would be investigating whether Sorare’s product equates to gambling and whether the company would need a licence to offer services to UK consumers.
The notice, posted on the regulator’s website, reads: “It has come to our attention the football-themed website, Sorare.com, is available to consumers in Great Britain. Sorare.com is not licensed by the Gambling Commission. “This means that any activity completed on the site by consumers in Great Britain is outside of the gambling regulations that a licensed operator should comply with.”
The UKGC statement continued: “Consumers are being advised to consider this information when deciding whether or not to interact with the site.
“The Gambling Commission is currently carrying out enquiries into the company to establish whether Sorare.com requires an operating licence or whether the services it provides do not constitute gambling.”
Twitter Users Highlight Regulator Failings
However, when the regulator used its Twitter account to urge concern about the service, it received a barrage of negative comments, many of which referenced the UKGC’s failures with the collapsed Football Index company.
One Twitter user asked, “are you going to regulate another business you don’t understand?” while another asked, has the “Gambling Commission been told to look busy.”.
Several of the comments on the platform mocked the UKGC’s wording of “come to our attention” in their notice, with many pointing out the fact that the Sorare platform has been available to UK consumers since 2019. The regulator has been put in a difficult situation after being highly criticised due to their involvement in the now-defunct Football Index.
Football Index, started by BetIndex, was granted a licence by the Gambling Commission in 2015 to pay dividends on football players “buzz” on the internet. The more attention a player attracted, such as newspaper articles or increased social media followers, the higher the commission rate.
The government ordered an independent review of the company’s collapse and found that Football Index changed the whole model of their business, which the regulator failed to notice. The company moved to a share dealing scheme in which customers bought and sold shares for three years and received dividends from these shares.
The regulator only discovered the business change when BetIndex tried to obtain an additional licence for a company called BetExchange. This company would have acted as an intermediary between Football Index and the customer.