According to a report from The Times, the Premier League is investigating links between clubs and cryptocurrency firms. The concern stems from the lack of regulation in the crypto industry. However, the League is also exploring its own deals.
The presence of cryptocurrency in sports has been around for a couple of years now. In 2018, investment platform eToro used Bitcoin to pay for a sponsorship deal with seven League teams, and Arsenal signed a cryptocurrency sponsorship deal with CashBet. However, over the course of the past year or so, deals are going beyond sponsorships and launching crypto-based products for fans.
Some fan clubs are worried about the misinformation around these products and the traps that consumers might fall for. One particular concern is that crypto-based products are associated with massive increases in value in a short time. In reality, this volatility in prices is unpredictable and prices can also crash.
While individuals can make their own investment decisions and deal with the consequences, when the encouragement to the investment is coming from a sports club using a rhetoric of loyalty and engagement with the team, there’s a question about the club’s responsibility for what it’s promoting.
While collectible non-fungible tokens (NFT) can also have volatile prices, some view them as just collectibles, and sometimes the prices are reasonable. In contrast, fan tokens which are not unique, are more like a club cryptocurrency.
The Premier League investigation is not good news for Socios.com, a fan token platform that has deals with multiple teams, including reigning champion Manchester City, Everton, and Arsenal.
The platform has been investing in penetrating the American market, where fan tokens are viewed as similar to securities and hence teams have been wary about adopting them. Hence Socios’ U.S. deals are more about fan engagement and NFTs rather than fan tokens.
Socios previously had issues in the League when West Ham went back on their decision to launch tokens after a backlash from fans who complained that the benefits were previously accessible at no cost.
Meanwhile, the UK’s gambling commission is investigating non-fungible token (NFT) platform Sorare that operates a fantasy football game, which may in part be motivated by the recent bankruptcy of a UK fantasy game. A couple of months ago, Sorare landed $680 million in funding. The startup has deals with almost every team in the League. It also has partnerships with the Bundesliga and LaLiga.
Another reason why Sorare has less to worry about is it’s been reported that the Premier League itself is in talks with an NFT platform to launch its own digital asset initiative. While there are no confirmations, it is likely that the deal in the works for the Premier League is with NBA Top Shot creator Dapper Labs , Sorare, or even both.