The French National Assembly has passed a law to regulate NFT games, distinguishing them from gambling and traditional gaming.
The French National Assembly has recently given the green light to a unique regulatory framework for video games involving Non-Fungible Tokens (NFTs) and crypto-based monetization. Commonly known as the Sorare law, the legislation aims to separate NFT games from the sphere of gambling and traditional video games. The vote took place as a segment of the larger Digital Space Regulation Law or SREN.
Also read: The Controversial Evolution of Crypto Gaming
Out of 561 members of the French National Assembly, 437 voted in favor of the Sorare law, and 77 were against it. This move has introduced the term “Jonum” into legal parlance, which stands for games that feature monetizable digital objects. The Sorare law and the concept of Jonum could act as a cornerstone for an entirely new set of regulations designed exclusively for crypto games.
Karima Lachgar, the CEO of Olky Wallet, argues that the introduction of SREN could bolster the legitimacy of a sector that’s expanding rapidly but has faced its share of scams. However, the legislation is not yet set in stone. It still has to pass through the Constitutional Council, which could either approve or reject the text. Notably, some members of the Assembly are still hoping for the latter.
Concerns and Implications
Critics argue that the new law could favor crypto games over online casinos. Karima Lachgar even suggested that, if this law is enacted, traditional gambling platforms may adapt and venture into the lucrative play-to-earn and Web3 sectors. State-controlled betting system Pari Mutuel Urbain, for instance, has already stepped into the crypto arena with its fantasy horse racing game, Stables.
For the French Web3 & NFT gaming sector, the Jonum regime appears as a sigh of relief. Prior to this, French authorities noted that crypto games like Sorare met most of the criteria to qualify as gambling activities. This classification could have placed a heavy tax burden on such businesses. Now, under the new law, the French National Gambling Authority, known as Autorité Nationale des Jeux (ANJ), will be responsible for overseeing compliance.
The Jonum framework will require users to disclose their age when setting up an account and confirm their identity during withdrawals. Interestingly, there won’t be a need for identity verification during the initial registration process. Additionally, the legislation puts some restrictions on promotional activities. Specifically, it bans the use of influencers for promotions on platforms that cannot effectively exclude minors.