NFT Games Are Not to Be Considered Gambling, Votes French National Assembly

On Tuesday, the French National Assembly passed the so-called Sorare law, introducing the first dedicated regulatory framework for video games tapping NFTs and crypto-powered monetization schemes.

It was voted as part of the broader Digital Space Regulation Law–or SREN–in the French National Assembly, involving 561 members who cast their votes.

Among them, 437 members voted for its adoption, while 77 members voted against it.

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Referred to as the “Jonum regime,” which stands for games with monetizable digital objects, the text seeks to balance fostering innovation among French startups and ensuring user protection.

For the first time in legal terms, this legislation defines Jonum, paving the way for a potential new regulatory framework specifically tailored to crypto games, distinct from gambling and traditional video games.

“SREN may contribute to legitimize the sector which is fast-growing and had suffered from scams the last few years,” Karima Lachgar, CEO and head of group legal and regulatory strategy at Olky Wallet, told Decrypt.

Now, the text must undergo examination by the Constitutional Council, which has the authority to review and potentially reject it–something several deputies are still hoping for.

Per reports from Les Echos, opponents have pointed out that the law would give preferential treatment to crypto games rather than online casinos.

If that plays out, Lachgar even suggested that under the new law, gambling platforms may move “to enter into the play-to-earn and Web3 sector like PMU.”

Pari Mutuel Urbain is the state-controlled betting system. It has already entered the crypto space via its fantasy horse racing game Stables.

A relief for the French Web3 gaming sector

Though it’s far from final, the Jonum regime would be a positive development for the local crypto-gaming industry.

French regulators had previously said that the assets used in crypto games meet “three of the four criteria for defining a game of chance and gambling: public offering, financial stake, and the presence of a mechanism involving chance.”

As a result, popular crypto games like Sorare, and others like Stables, were at risk of being classified as a form of gambling. The latter forms of business face much heavier tax burdens.

However, the text states that it is the Autorité Nationale des Jeux (ANJ), the French National Gambling authority, that will oversee compliance.

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That means users will need to report their age when creating an account for a crypto game and verify a player’s identity when they withdraw in-game earnings. Importantly, no identity verification at registration will be required.

The Jonum regime also includes measures that impact the promotion of Web3 games using influencers. Specifically, it prohibits the use of influencers for promotional activities on online platforms that cannot exclude minors.

This suggests that promotional efforts on many social media platforms, including YouTube, may remain unaffected.