Op-ed : JONUM - game over or game on ?
Claire Pinson-Bessonnet analyses the key points linked to France's regulation of web3-JONUM operators
Hello, the public debates on France’s regulation of Web3-JONUM companies restart today and Gaming & Co is delighted to feature an expert article analysing the project:
Support for France’s web3 industry, real money gaming criteria, lighter taxation and regulation - Claire Pinson-Bessonnet, lawyer at the Paris Bar and Regulatory Affairs Director at Cabinet Samman, analyses the impact the regulation of JONUM could have on the French gambling ecosystem.
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JONUM: game over or game on?
Games with Monetisable Digital Objects (JONUM) might finally see the light of day this week with the passage of France’s bill to secure and regulate the digital space (SREN) in the National Assembly. If so, this will shake up the country’s gambling and video game sectors.
Support for the French web3 ecosystem
Making France the European epicenter of web3 is no easy task. The government wants to create a new category of games in its bill to secure and regulate the digital space (SREN) currently being debated in the National Assembly.
JONUMs are intended to fit somewhere between gambling and video games, making France the first country in the world to regulate this ecosystem.
Web3 gaming is a fast-growing vertical: the ‘play-to-earn’ segment now boasts 2,000 games targeted notably at a French audience.
While the bill’s intention of bolstering the French ecosystem, which includes several heavyweights such as the unicorn SORARE and Pari Mutuel Urbain (PMU), is laudable, the devil is in the detail.
A definition that blurs the lines
In fact, the definition of JONUM includes all the legal criteria for gambling: an offer to the public, a financial sacrifice, an element of chance and the expectation of a monetisable gain.
Do the motivations of JONUM players differ from those of gamblers? Perhaps. Is the JONUM business model different from the gambling model? Possibly.
The fact remains that these winnings have value, especially since they can involve cryptocurrencies, and that no distinction can be drawn where the law does not.
While JONUMs are struggling not to be assimilated to gambling, the same is true of video games, whose business model has been based on in-game purchases for over a decade.
Two amendments, to be debated by lawmakers, aim precisely at bringing videogame loot-boxes within the scope of JONUMs.
Protection of minors and cryptocurrencies
The debate is not only theoretical. Given their characteristics, JONUMs will generate new costs that need to be offset to prevent underage gambling and treat addiction, as well as to combat fraud, money laundering and the financing of terrorism.
According to MP Denis Masséglia, who is the parliamentary rapporteur on the JONUMs project: “In the future, there could be NFTs (to be won) in Mario Kart. Then you’ll have to tell your kids they can’t play because they could win one.”
Indeed, minors should be banned from playing JONUM games, in the same way they are banned from gambling.
JONUMs would also allow players to be paid their winnings in cryptocurrency, something that is prohibited for real money gambling firms in France. However, there will be no assessment of the potential money-laundering risks they pose until the conclusion of the initial three-year experiment.
A lighter regulatory framework, with no specific tax system
JONUMs will be supervised by gambling regulator ANJ, whose powers will be extended under this bill. But powers and the means to enforce them don’t always go hand in hand, especially when no specific tax measures are being considered for JONUMs.
Under these conditions, JONUMs could be a particularly attractive alternative under which to carry out activities similar to gambling, but within a lighter framework.
The risk is that of creating direct, unfair competition for all gambling segments and drying up the associated tax revenues, to the detriment of both the State and local authorities.
So, what does the future hold for JONUMs? The imminent examination of more than 200 amendments filed on this subject will provide the beginnings of an answer.
Claire Pinson-Bessonnet is licensed at the Paris Bar and is Regulatory affairs director at Cabinet Samman.
Further reading: No online casino in France in 2023
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