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The UK House of Commons Culture, Media, and Sport Committee has released a report warning soccer clubs against the use of fan tokens.
In a 30-page report, the committee explored the intricacies and challenges presented by non-fungible tokens (NFTs) in both the arts and sports sectors.
Fan tokens are cryptocurrencies designed to provide benefits to fans of sports teams or music groups, such as the ability to allow token holders to vote on an athlete’s entrance music or select a team’s jersey.
However, the report highlighted criticisms of fan tokens, stating that they have not fulfilled promises of fan engagement.
The committee expresses concern that clubs may continue to promote fan tokens as a suitable form of fan engagement despite their price volatility and reservations among fan groups.
“We are (…) concerned that clubs may present fan tokens as an appropriate form of fan engagement in the future, despite their price volatility and reservations among fan groups,” the report said.
As a result, the committee recommended that any measurement of fan engagement in sports, including the upcoming regulation of football, explicitly exclude the use of fan tokens.
The report also raised concerns about NFTs linked to sports clubs, highlighting similarities to gambling.
The committee had previously suggested that retail trading of unbacked cryptoassets should be considered akin to gambling.
The UK has been working on regulations surrounding NFTs as of late.
Earlier this week, a cross-party committee in the country called on the government to collaborate with NFT marketplaces in order to combat copyright infringement.
The committee outlined its recommendations, which also included suggestions to establish a code of conduct that safeguards creators.
Countries Are Implementing Regulations for Sports Platforms
Internationally, many countries are implementing regulations for Web3 sports platforms.
France, for instance, is introducing the SREN bill, aimed at enhancing digital security and demonstrating the nation’s proactive stance on emerging technologies like NFTs and cryptocurrencies.
The bill, often referred to as the “Sorare law,” is currently under review by the National Assembly.
French firm Sorare, known for its fantasy sports game utilizing free cards or NFTs, reached an agreement with the Autorité nationale des jeux (National Gaming Authority) last year to avoid classification as gambling.
The bill includes provisions specifically for games based on NFT and cryptocurrency technologies.
It differentiates Web3 games from traditional gambling based on three key factors: financial commitment, the element of luck, and potential financial gains.
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