Texas and Alabama Order iGaming Operator to Stop selling NFTs
Non-fungible tokens (NFTs) and the Metaverse continue to pique a lot of interest across several different sectors. Much like in the case of blockchain and digital currencies, they are both considered to be full of potential and lots of people are looking to leverage that. Many of them are already trying to work out how to infuse their brands into NFTs and the Metaverse to attract the growing market of interested customers.
Unsurprisingly, the online gambling sector has not been left behind. The Metaverse and NFTs provide online gaming platforms with a new concept to explore and enhance the gambling experiences that they offer.
Among the companies that have been exploring the development is Cyprus-based Sand Vegas Casino Club. Through a new initiative spearheaded by Martin Schwarzberger and Finn Ruben Warnke, its cofounders, the iGaming operator has recently started purchasing land in Decentraland and The Sandbox with some of the revenues from the 11,100 “Gambler” NFTs.
This was meant to allow NFT holders to share in the profits from the operator’s activities. It was estimated that the “Gambler” NFTs may bring in up to $24,480 per year, while the higher-end “Golden Gambler” NFTs might bring in up to $81,000 per year. However, these plans have just hit an obstacle.
This week, Sand Vegas Casino Club and its creators were issued a cease-and-desist order by Texas and Alabama regulators. According to the state regulators, they were providing unregistered NFT-based securities to citizens.
In the modern digital era, high-tech scams are quite common. That is likely where all the speculation is coming from. Moreover, the mainstream market is only now beginning to fully comprehend the concepts of the Metaverse and NFTs. The fact that the initiative has also kept some things under wraps also does not help.
“The advice regarding regulation is simply not true and the offering of NFTs is a high-tech scam. The parties are concealing their locations, hiding the identities of managers, misleading potential purchasers about their experience, and obscuring the significant risks associated with investing in their NFTs.”The Texas State Securities Board (TSSB)
The injunction is the first of its sort in relation to the Metaverse. Still, it represents a new area for US authorities attempting to regulate NFTs. This Sands Vegas Casino case is minor. But if history is anything to go by, more such moves are probably on the way. State measures such as this one usually pique the curiosity of federal authorities. Perhaps it will also get the attention of the Securities and Exchange Commission (SEC) as interest in NFTs increases.