Commons Sense

House of Commons · Westminster Hall

Cryptoasset Promotions in Sport

08 November 2022 · 3 other contributors · 9,843 words

Opened by Aaron Bell Con Newcastle-under-Lyme

Responding minister: Stuart Andrew

Culture, Media & Sport

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Aaron Bell raised concerns about cryptoasset promotions in sport in Westminster Hall. A government minister responded.

Key points

  • Mr Aaron Bell raised concerns about misleading promotion of cryptoassets by sports teams and players.
  • Mr Bell asked the Government to work with sectors to ensure statutory and self-regulation for cryptoassets in sport.
  • The Minister acknowledged the importance of protecting sports integrity and fan interests.

Key requests to Government

Mr Bell asks the Government to work with relevant actors across sectors to ensure both statutory regulation and self-regulation in sport for cryptoassets, urging the Premier League to reconsider deals like the proposed £30 million arrangement with Sorare. He also requests that issues of cryptoasset promotion fall under the remit of a new independent regulator for English football.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Aaron Bell Con Newcastle-under-Lyme

Mr Aaron Bell is concerned about the misleading promotion of cryptoassets by sports teams and players, the lack of consumer protection for fans investing in these assets, inadequate due diligence by clubs before entering into deals with crypto companies, and the monetisation of fan engagement through speculative investments. He highlights that nearly every Premier League club now has a crypto partner, and many have entered deals without proper regulation or acknowledgment of risks. Instances such as NFT schemes losing significant value and failing to deliver promised benefits are cited.

Other contributors (3)
  • Jeff Smith Lab Manchester Withington

    Concerned about the exploitation of football fans through cryptoasset promotions, Jeff Smith highlighted that over 2.3 million UK citizens own cryptocurrency or cryptoassets. He criticised clubs for not engaging with fans genuinely and instead exploiting their loyalty by requiring them to purchase cryptoassets. The Labour party supports genuine fan engagement without financial barriers and is concerned about the environmental impact of cryptocurrencies.

  • Jim Shannon DUP Strangford

    Jim Shannon expressed concerns about the risks of cryptoassets in sports and highlighted an incident where Football Index collapsed, potentially leading to losses of up to £90 million. He argued that the Financial Conduct Authority should ensure proper regulation and called for a review of the Gambling Act 2005 to address new regulatory challenges posed by cryptocurrencies.

  • Martin Docherty Lab West Dunbartonshire

    Discussed the growing trend of cryptoasset promotions in sports, citing examples from the Super Bowl and English Premier League. Highlighted that $600 million was spent by crypto firms on sports sponsorship last year, up from $25 million the previous year. Emphasised the risks of unregulated financial products and due diligence issues with sporting brands.

Government Response

Stuart Andrew

It is a pleasure to serve under your chairmanship, Mrs Cummins. I thank my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) for securing the debate. We both understand how important it is to protect the integrity of our sports as well as the fans, who are their lifeblood. In my first few weeks in this job I have been learning an awful lot, but I would say that in the last hour I have learned even more. Any innovations should be implemented responsibly, in line with any relevant regulation, and with transparency in how they are advertised and promoted. The Government's ongoing work on football regulation is committed to breaking the cycle of inappropriate ownership, financial instability and poor governance practices. Engaging with fans' groups goes wider than that, and the growing interest in, and promotion of, cryptoassets issued by sports clubs should clearly keep fans at the forefront. Cryptoassets can come in many forms, ranging from cryptocurrencies to non-fungible tokens. The Government are taking action on the regulation of cryptoassets and their promotion, including setting out our vision for the future of the financial services sector. In July, the Government set out our firm ambition to make the UK a global hub for cryptoasset technology and investment. We want to ensure that firms can invest, innovate and scale up in this country, and we have announced a number of reforms that will see the regulation of cryptoassets and aspects of tax treatment evolve. The Government's proposed measure to expand the scope of the financial promotion order to capture qualifying cryptoassets will bring most of these unregulated cryptoassets into financial promotions regulation. That forms part of our staged and proportionate approach to such regulation, which is sensitive to the risks posed and responsive to new developments in the market. We are actively monitoring the cryptoasset market and stand ready to regulate where necessary. The same is true for cryptoassets in sport. There is potential for cryptoassets to enhance fans' experience of sport and make them feel more a part of the clubs they love, but their use by clubs must be responsible and transparent about any risks involved.

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