Video games: French law redefines digital items

The SREN Act introduces an experimental framework specifically dedicated to digital items in video games.

On 21 May 2024, France took a decisive step in regulating the video game sector with the adoption of the SREN Act (Securing and Regulating the Digital Space). This groundbreaking legislation introduces, for the first time, an experimental framework specifically dedicated to monetisable digital items in video games.

This legislative initiative, which reflects the growing recognition of the economic and cultural significance of gaming, profoundly reshapes the legal landscape of the sector and creates new obligations for developers and publishers.

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The French experiment: an unprecedented and regulated approach

The SREN Act introduces a three-year experimental period during which games offering monetisable digital items through chance-based mechanisms benefit from a tailored legal framework. This pragmatic approach aims to reconcile economic innovation with player protection, while providing legal certainty to industry players.

Articles 40 and 41: the cornerstone of the new scheme

Article 40 of the Act establishes the principle of experimental authorisation for games allowing adult players to obtain monetisable digital items by chance. This provision marks a significant advance, as it lifts certain gameplay mechanisms out of a legal grey area that potentially exposed them to reclassification as gambling.

However, this authorisation comes with significant restrictions:

• Digital items may not be directly converted into real money
• The developer or its partners may not buy back these items
• Transactions between players are permitted but strictly regulated

The combined technical and legal expertise of a lawyer for online gaming proves essential in determining whether your business model falls within the scope of this experiment. Through an in-depth analysis of your game mechanics and economic ecosystem, the lawyer helps you identify the adjustments needed to benefit from this secure framework while preserving the appeal of your offering.

Article 41, for its part, sets out the operational obligations imposed on companies wishing to offer these games. These particularly stringent obligations aim to guarantee the integrity of operations and the protection of players.

The new reporting obligations: an essential prerequisite

The SREN Act establishes a declaratory regime with the French National Gaming Authority (ANJ), which thereby becomes the reference regulator for this sector of activity.

The prior declaration: a crucial step

Any company wishing to operate a game offering monetisable digital items by chance must file a prior declaration with the ANJ. This administrative formality, far from being a mere bureaucratic procedure, constitutes the gateway to the experimental scheme.

The regulatory strategy developed by a legal adviser specialising in digital law turns this obligation into an opportunity for structuring. A lawyer assists you in preparing this declaration, ensuring the completeness of the file and the optimal presentation of your business model. This careful preparation maximises your chances of smoothly joining the experimental scheme.

The information to be provided: transparency and traceability

Although the exact content of the declaration will be specified by decree, several elements will likely be required:

• A detailed description of the game mechanisms involving monetisable digital items
• The probabilities of obtaining the various items
• Player protection measures and measures to prevent excessive gambling
• Anti-money laundering and anti-fraud mechanisms
• Procedures for verifying players' age and identity

The structured support of a legal expert enables you to anticipate these requirements and prepare comprehensive documentation. By methodically structuring your declaratory approach, a lawyer helps you demonstrate your commitment to compliance and player protection, both essential in the eyes of the regulator.

Structural and organisational requirements

Beyond the reporting obligations, the Act imposes several structural conditions on companies wishing to offer games with monetisable digital items.

Territorial establishment and representation

One of the fundamental criteria concerns the company's establishment. To be eligible for the experimental scheme, the company must:

• Have its registered office in the European Union or the European Economic Area
• Have an establishment in France if its registered office is located outside the EU/EEA
• Appoint representatives in France ensuring compliance with legal obligations

The legal architecture designed by a lawyer helps you determine the optimal corporate structure for your activity. Whether it involves creating a French subsidiary, restructuring your existing organisation, or establishing representation mandates, their expertise enables you to meet these territorial requirements effectively while optimising your operational functioning.

Integrity and reliability of operations

The Act enshrines a general principle of integrity, reliability, and transparency of gaming operations. This cross-cutting requirement translates into concrete obligations:

• Implementing technical systems guaranteeing the fairness of results
• Traceability of operations and retention of data
• Auditability of algorithms and random number generators
• Comprehensive information for players on game mechanisms

The in-depth compliance analysis carried out by a lawyer in online gaming law enables you to identify the technical adaptations needed to guarantee this integrity. Working with your technical teams, the lawyer develops a robust procedural framework, precisely documenting your implementation choices and ensuring their compliance with the regulator's expectations.

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Player protection: an absolute priority

Player protection is one of the fundamental pillars of the new scheme. To this end, the Act imposes several specific measures that profoundly transform the relationship between operators and their community.

Age and identity verification: a reinforced obligation

Participation in games offering monetisable digital items is strictly reserved for adult players. This restriction is accompanied by an obligation to rigorously verify participants' age and identity.

The legal and operational methodology developed by an expert lawyer guides you in implementing technical solutions compliant with the dual imperative of protecting minors and respecting personal data. Their GDPR expertise enables you to design verification processes that are both effective and respectful of users' privacy, in coordination with a lawyer specialising in CNIL matters.

Preventing excessive gambling and informing players

Operators must implement concrete measures to prevent excessive and pathological gambling:

• Warning messages defined by ministerial order
• Mechanisms allowing players to limit their spending
• Tools for detecting problematic behaviour
• A prohibition on loans between players for the purchase of digital items

The preventive approach developed by a legal adviser specialising in digital law enables you to design user interfaces and customer journeys that naturally incorporate these protection requirements. By adopting a proactive approach, you turn these regulatory constraints into opportunities to strengthen your community's trust and the sustainability of your business model.

Specific features relating to sporting competitions

The SREN Act pays particular attention to games based on real sporting competitions, notably horse races, imposing specific rules for this segment.

The specific framework for horse races

For games with monetisable digital items based on horse races, several additional conditions apply:

• An obligation to use only races appearing on the official calendar
• The need to conclude a contract with the race-organising company
• A prohibition on exclusivity clauses in such contracts
• Compliance with the values of the public horse-racing service

The sector-specific expertise of a lawyer proves particularly valuable in this specialised field. Their knowledge of the horse-racing sector's players and the associated regulatory issues enables you to establish compliant partnerships while maximising the value of your gaming offering.

Restrictions imposed on actual participants

The Act also introduces significant restrictions for participants in real sporting competitions (jockeys, trainers, athletes):

• A prohibition on participating in games based on the competitions in which they take part
• A prohibition on transferring monetisable digital items linked to these competitions
• A prohibition on disclosing inside information to third parties

The compliance framework developed by an expert legal practitioner helps you put in place effective control systems to ensure compliance with these restrictions. By developing tailored verification processes and specific contractual clauses, the practitioner safeguards your activity against the risk of inside information entering your gaming ecosystem.

The regulation of commercial communications

Commercial communications relating to games offering monetisable digital items are subject to strict regulation, reflecting the legislator's intention to prevent the exposure of minors and to limit incentives to gamble excessively.

Protecting minors in communications

Operators must ensure that their commercial communications do not target minors and are not disseminated in spaces mainly frequented by this audience. This obligation extends to partnerships with influencers and content creators.

The legally secured marketing strategy that an internet law lawyer develops with you allows you to optimise the effectiveness of your campaigns while scrupulously complying with these restrictions. Their expertise guides you in selecting appropriate communication channels and in crafting messages compliant with legal requirements.

Mandatory statements and prevention messages

All commercial communications must include mandatory statements, in particular a message warning against the risks associated with excessive gambling. The technical arrangements for displaying these statements will be set by the ANJ.

The personalised editorial support of a lawyer enables you to incorporate these formal constraints without compromising the impact of your communications. Through a creative and legally robust approach, the lawyer helps you reconcile regulatory compliance with marketing effectiveness.

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Penalties and regulatory oversight

While the SREN Act creates an experimental framework favourable to the development of games with monetisable digital items, it also establishes a system of oversight and penalties intended to ensure compliance with the rules laid down.

The central role of the French National Gaming Authority

The ANJ is granted extensive powers to monitor compliance with the obligations imposed on operators. This independent authority has, in particular:

• A power of investigation and oversight, both documentary and on-site
• The authority to require the disclosure of any necessary information
• The power to issue formal notices and administrative penalties
• A mandate to evaluate the experiment

The structured institutional relationship that a lawyer helps you establish with the ANJ is a major asset for navigating this new regulatory framework with confidence. Their expertise in administrative procedures and their knowledge of the regulator's expectations enable you to adopt a stance of constructive dialogue and to resolve any interpretation difficulties at an early stage.

The risk of penalties and their prevention

Failure to comply with the obligations set out in the Act exposes operators to various penalties, which may go as far as a prohibition on offering their games on French territory. For the most serious breaches, criminal penalties may also be incurred.

The comprehensive preventive approach orchestrated by a lawyer specialising in online gaming law is your best protection against these risks. By implementing a comprehensive compliance programme covering all legal and regulatory requirements, the lawyer considerably minimises the risk of penalties while providing you with the evidence needed to demonstrate your good faith in the event of an inspection.

A strategic opportunity for gaming players

By creating an experimental framework for games with monetisable digital items, the SREN Act opens up new prospects for the French video game industry. This legislative initiative, by lifting certain business models out of a legal grey area, offers developers and publishers the opportunity to deploy promising innovations in a secure environment.

However, the complexity of the obligations imposed and the particular attention paid to player protection call for a methodical and legally robust approach. By incorporating regulatory constraints from the design stage of your games and adopting a proactive compliance approach, you will be able to take full advantage of this legislative advance while contributing to the emergence of a responsible and sustainable ecosystem.

Our firm supports gaming players in adapting to this new legal framework, offering tailor-made solutions combining technical expertise, strategic vision, and legal rigour. In a constantly evolving sector, our in-depth knowledge of the specific challenges of gaming is a decisive asset in turning regulatory constraints into competitive advantages.