France exploring regulation for Web3 Gambling and NFTs
Committed to address the evolving landscape of digital gaming, French legislators are engaged in discussions concerning the formulation of a comprehensive legal framework designed specifically for games utilizing Web3 technology. The “SREN” bill, which the French senators approved in the month of July this year, has specifically been designed to define a new framework for Web 3 games, which are based on digital assets like non-fungible tokens (NFTs) that take advantage of the Web3’s decentralized nature to create new gaming experiences and digital economies.
Within the broader framework of aforementioned SREN, the newest initiative singles out NFT provider Sorare and similar platforms facilitating digital trading card exchanges. This new regulatory framework intends to exert control over such platforms’ operations by introducing specific constraints.
Some market experts perceive this as a potential avenue for legitimate Web3 gambling in the country. By incorporating NFT winnings, operators will likely be able to circumvent the country’s existing laws on online casinos.
SREN is actually a comprehensive regulatory initiative by the government to govern the digital sphere. It has faced numerous revisions as multiple political parties kept on contributing their perspectives. It sparked substantial debate, mainly regarding the regulation of so-called NFTs. In its current form, the legislation is expected to formally recognize "games with monetizable digital objects," which are known as Jonum in France.
However, some are of the view that Jonum's introduction could unintentionally create a loophole theoretically enabling online casinos to employ NFTs as payouts. As NFTs share the decentralized technology of controversial cryptocurrencies, many critics have raised concerns. Some land-based casino operators, who interpret the language of the legislation as an endorsement of crypto-based casinos, have also raised concerns.
One bulging point of contention within the legislation is regarding the protection of minors and combating the fast-growing problem of money laundering. Thus, lawmakers have plans to introduce updated language within SREN to enforce more efficient gambling controls, with oversight power vested in the National Gaming Authority.
Presently, French laws permit only land-based licensed casinos to operate digitally. However, most of the land-based casinos refrain from doing so due to fear that it could have a potential impact on revenue streams of their physical businesses.
When discussions on SREN restarted recently, associations like Casinos de France and the Association of French Independent Casinos were quick to voice their concerns. Some casino operators even criticised the government for not including them in the dialogue.