Trading card game (TCG) services: what are the legal risks for your project?

The collectible card market (Pokémon, sports cards, Magic: The Gathering) has changed beyond recognition. Once the preserve of schoolyard traders and hobbyists, these cards are increasingly treated as alternative assets: rare pieces fetch record prices, grading has become standard practice, and an ecosystem of marketplaces, vaults, repacks and live openings has emerged around them. This financialisation attracts entrepreneurs, but it also shifts the boundary between selling a product and providing a regulated service.

Once a card stops being a collector’s item and starts functioning as a return-generating asset or the stake of a chance-based mechanism, several regulations may come into play, often without the operator realising it. This article maps the main legal, regulatory and tax risks in the TCG space, and explains how to address them early.

A growing sector, underestimated legal risks

What do TCG services actually cover?

TCG services encompass several business models whose legal treatment differs significantly. The main categories are: marketplaces connecting buyers and sellers; grading and authentication services; custodial storage (vaults) holding cards on behalf of clients; random bundle offerings such as repacks and mystery boxes; and live openings of sealed products. A single platform often combines several of these features, which increases its regulatory exposure. The risk analysis must therefore be conducted function by function, rather than at project level.

From collecting to speculative investment: where does the risk arise?

The legal risk does not stem from selling cards, which falls under ordinary sales law, but from the narrative and features surrounding the sale. An operator that simply sells cards to collectors remains an ordinary trader. But as soon as it highlights financial returns, offers to manage or hold cards on the buyer’s behalf, guarantees a buyback, fractions ownership of a rare piece or publishes performance indices, it may step into regulated territory. The boundary is a fine one, assessed against a set of indicators; the sections below explore where it falls.

Repacks, mystery boxes, live openings: have your mechanisms reviewed before going live.

Regulatory issues in TCG services

The risk of reclassification as intermediation in non-standard investment products

The first risk, and the most specific to the sector, stems from the rules on intermediaries in non-standard investment products (“biens divers”). Article L. 550-1 of the French Monetary and Financial Code subjects to a demanding regime, supervised by the AMF, any person who habitually offers the acquisition of rights over assets by highlighting the possibility of a direct or indirect financial return, as well as any person who offers such acquisitions where the acquirer does not manage the assets, or where the contract includes a buyback or exchange option with capital appreciation. This framework was designed to capture atypical investment schemes, the Aristophil manuscript affair being its best-known example, but it applies just as well to a collectible card presented as an investment.

Several configurations common in TCG projects may trigger this classification: selling cards alongside a suggestion of capital gain; fractioning ownership of a high-value card among several investors; retaining the card on behalf of the buyer with a view to resale; or granting a buyback or exchange option with capital appreciation. A marketplace that simply connects collectors, without any return narrative or third-party management, should in principle remain outside this regime.

The consequences of reclassification are serious. The operator must submit its information document and all promotional materials to the AMF for prior review before any marketing, and obtain the corresponding registration. Without it, the operator is carrying on an unlicensed activity, exposing itself to criminal sanctions, injunctions, AMF blacklisting, and civil claims, including the nullity of contracts.

Risks relating to payment services and anti-money laundering

The second risk concerns the handling of financial flows. A marketplace that collects payment from the buyer before passing it on to the seller is, in principle, providing a payment service within the meaning of Article L. 314-1 of the French Monetary and Financial Code. This activity is reserved for authorised payment service providers. An operator carrying it out without an authorisation from the ACPR, without acting as agent of an authorised provider and without engaging one, is exposed to the criminal offence of unlicensed activity.

In practice, this risk is neutralised through appropriate structuring of the flows. The most common approach is to engage an authorised payment service provider specialising in marketplaces. The operator may also become the agent of an authorised provider, or rely on the commercial agent exemption, whose conditions are narrow: the agent must be authorised by contract to negotiate or conclude the sale on behalf of the payer only or the payee only, and must have real room to negotiate. A marketplace acting for both parties will generally not qualify. The payment architecture must therefore be settled at the design stage.

The third risk concerns anti-money laundering and counter-terrorist financing. Where an operator provides payment services or acts as an agent, it becomes an obliged entity under Article L. 561-2 of the French Monetary and Financial Code and is subject to customer due diligence, client identification and suspicious transaction reporting to TRACFIN, the French financial intelligence unit. High-value cards also show the classic features of money laundering vehicles: high unit value, a liquid secondary market and ease of cross-border transfer.

The risk of classification as gambling

The fourth risk, arguably the most underestimated, concerns gambling regulation. Under Article L. 320-1 of the French Internal Security Code, gambling combines four elements: an operation offered to the public, a financial contribution by the participant, the prospect of a gain and the intervention, even partial, of chance. Such activities are in principle prohibited in France, save for those authorised and supervised by the French gambling authority (ANJ). Several mechanics common in the TCG sector potentially meet these criteria.

Random bundle sales are the clearest example. Where an operator sells repacks or mystery boxes whose contents are drawn at random, the customer pays a fixed price for a lot of uncertain value that may exceed what they paid. The financial contribution and the element of chance are present; the prospect of gain, long debated for simple collectible cards, is revived by the existence of a liquid secondary market. Live openings and gamification mechanics tied to sales call for the same analysis, which we detail on our page Booster packs, loot boxes and gambling law in France.

Two points should be noted. First, the promotional prize draw exemption allows promotional operations, provided participation requires no financial consideration. Second, the experimental regime for games with monetisable digital objects (JONUM) (page in French), introduced by the Act of 21 May 2024, does not apply here: it targets exclusively digital items, not physical cards. A chance-based mechanism involving physical cards must therefore be assessed under the classic gambling regime, which is stricter. The consequences of classification as unlicensed gambling are among the most severe in the sector: criminal sanctions, ANJ intervention, blocking and delisting of the service.

To secure your TCG project, get in touch with our lawyers.

Tax issues in TCG services

VAT considerations for the operator

Disclosed vs. undisclosed agency model. The first decision, with significant consequences, concerns the intermediation model. Under a disclosed agency model, the operator acts solely as an intermediary: the sale is concluded directly between seller and buyer, and the operator’s taxable base is limited to its commission. Under an undisclosed agency model, the operator is deemed to purchase the item from the seller and resell it in its own name; it becomes liable for VAT on the full sale price, not just its margin. Slipping into an undisclosed model, often unintentionally where the operator collects payment, sets the price, handles after-sales queries or appears to the customer as the seller, exposes the platform to VAT on total transaction volumes, which radically changes its financial exposure. The deemed supplier rules applicable to certain facilitated sales (sellers based outside the EU, low-value imports) follow the same logic and must be anticipated at the design stage.

Territorial scope. The place of supply for VAT purposes is not governed by a single rule. It varies depending on where the seller and buyer are established, whether the cards are digital or physical and, for physical cards, whether they are delivered to the buyer or held by the operator on their behalf. These parameters interact: a single transaction may be subject to different territorial rules depending on the status of the parties and the nature of the service, potentially requiring the operator to collect VAT in several jurisdictions.

Rates and collector’s items. Certain cards may, subject to conditions, qualify as collector’s items, attracting specific arrangements such as a reduced import rate or the margin scheme. However, this classification is far from guaranteed: the French tax authorities tend to refuse it for Pokémon-type cards, treating them as ordinary game articles rather than collector’s items in the tax sense. Operators cannot assume which rate or regime applies without a detailed analysis of the products sold.

The seller’s tax position

Professional or private seller. For the seller, the key question is when they cross the line from a private collector disposing of personal assets to a VAT-liable trader. This happens when the activity is carried on independently and habitually: buying with a view to resale, recurring and significant volumes, organised sales activity, systematic pursuit of a margin. The assessment relies on a set of indicators, but crossing that line carries significant tax consequences.

VAT rules. Once a taxable person, the seller must determine their VAT regime. Below the statutory turnover thresholds, they may benefit from the small business exemption, which relieves them of charging VAT, at the cost of losing the right to deduct input tax. Above those thresholds, they must account for VAT and face the same questions of rates and classification as the operator.

Joint and several liability of the operator. Seller compliance is a significant concern for marketplace operators. On VAT, where a platform knew, or should have known, that a seller was not meeting its VAT obligations, the tax authorities may, after a formal notice procedure inviting the platform to take measures (including excluding the seller), hold the operator jointly and severally liable for the unpaid VAT. Platforms therefore have every interest in putting in place procedures to detect and exclude non-compliant sellers. On social security contributions, platforms must carry out due diligence on their professional sellers (registration and regulatory standing). Failing that, the operator may be held jointly and severally liable for sums owed by a seller in an irregular position.

Reporting obligations specific to marketplaces

Beyond its own VAT position, a marketplace operator is subject to specific reporting obligations. Article 242 bis of the French General Tax Code requires it to inform users of their tax and social security obligations and to send them an annual summary of their transactions. The DAC7 directive, transposed in Articles 1649 ter A et seq. of the same Code, goes further: since income earned in 2023, operators must report annually to the tax authorities the identity of their sellers and the income derived through the platform, subject to an exemption for occasional sellers of goods. A register-keeping obligation and a joint and several liability mechanism for VAT owed by certain non-EU sellers may also apply.

How ORWL Avocats supports TCG projects

TCG services are developing at the intersection of several regulatory frameworks that were not designed with them in mind, and whose application depends closely on product design choices. Experience shows that most risks can be neutralised at the outset, provided the right team is engaged: one that understands both the sector and the full range of legal disciplines it involves.

ORWL Avocats knows the business models of this sector, its practices and its regulatory fault lines. This knowledge rests on multidisciplinary expertise brought together in-house: financial and gambling regulation, tax, contract law, data law and litigation risk are handled in a coordinated manner.

The analysis starts from the actual flows and business model of each operator to identify the regulatory tipping points specific to its service, from initial scoping through to deployment. Deliverables are designed to be immediately usable: flow and risk mapping, feasibility analysis, working sessions with client teams, a retainer for recurring needs, and representation before regulators where the project requires it.