In a landmark decision on Tuesday, the French National Assembly approved the so-called Sorare law, pioneering a dedicated regulatory framework for video games leveraging NFTs and cryptocurrencies.
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The provision was sanctioned under the wider Digital Space Regulation Law (SREN) umbrella in the French National Assembly. Of the 561 voting members, a significant majority, 437, endorsed the measure, while 77 members opposed it.
Dubbed the “Jonum regime” – an acronym for games encompassing monetizable digital assets – the proposal aims to strike a balance: it champions innovation within French startups while prioritizing user safeguarding.
The legislative text delineates Jonum as a path for regulatory framework exclusively for crypto games. This classification sets crypto games apart from both gambling and orthodox video games.
Karima Lachgar, CEO and head of legal and regulatory strategy at Olky Wallet, remarked in an interview:
“SREN may contribute to legitimize the sector which is fast-growing and had suffered from scams the last few years.”
But the journey isn’t over yet. The legislation awaits scrutiny from the Constitutional Council, which possesses the power to either affirm or veto it. Several deputies continue to hold out hope for its dismissal.
According to insights from Les Echos, critics argue that this legislation bestows a biased advantage on crypto games over online casinos. Expanding on this, Lachgar speculated that, in light of this law, gambling platforms might venture into the play-to-earn and Web3 arena, mirroring the likes of PMU.
Pari Mutuel Urbain (PMU), the government-regulated betting platform, isn’t a newcomer to crypto. It has dipped its toes with its fantasy horse racing game named Stables.
Web3 games to escape French tax liabilities
For France’s Web3 gaming community, this potential Jonum regime emerges as a beacon of optimism. French regulatory bodies had previously indicated that crypto game assets satisfied most criteria to be categorized as gambling. Such categorization would have imposed exorbitant tax liabilities on games like Sorare and Stables.
Yet, the legislation emphasizes that the Autorité Nationale des Jeux (ANJ), France’s National Gambling Authority, will be in charge of ensuring adherence. Consequently, players will declare their age upon game account creation and confirm their identity when cashing out in-game profits. Notably, registration won’t mandate identity validation.
Furthermore, the Jonum directive affects how Web3 games employ influencers. It expressly forbids influencer-led promotions on platforms that cannot filter out minors. Hence, several popular promotional channels, such as YouTube, could remain untouched.