JONUM: game over or game on?
Games with Monetizable Digital Objects (JONUM) might finally see the light of day this week with the passage of the bill to secure and regulate the digital space (SREN) in the National Assembly. If so, this will shake up the 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 in 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 the Pari Mutuel Urbain (PMU), is laudable, the devil is in the details.
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 monetizable 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, rapporteur on JONUMs: “In the future, there could be NFTs in Mario Kart. Then you’ll have to tell your kids they can’t play because they could win one.” In effect, minors should be banned from playing JONUM games, in the same way they are banned from gambling.
JONUMs allow players to earn crypto, something that is prohibited in gambling in France. However, there will be no assessment of the potential money laundering risks they pose until the conclusion of the 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 means don’t necessarily go hand in hand, especially when no specific tax measures are contemplated 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 in public session of the more than 200 amendments filed on this subject will provide the beginnings of an answer.