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 entire ecosystem of marketplaces, vaults, repacks and live openings has emerged around them. This financialisation is attracting entrepreneurs, but it is also shifting 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 a chance-based mechanism, several financial 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 multiple 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 frequently combines several of these features, increasing its regulatory exposure. The risk analysis must therefore be conducted function by function, rather than at the project level.

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

The legal risk does not stem from selling cards — that is 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 potentially steps into regulated territory. The boundary is a fine one, assessed against a set of indicators. The sections below explore where that line falls.

Repacks, mystery boxes, live openings: have your mechanisms validated before going live (contact ORWL).

Regulatory issues in TCG services

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

The first risk, and the most specific, stems from the regulation of intermediaries in non-standard investment products. The French Monetary and Financial Code subjects to a demanding regime, supervised by the AMF, any person who habitually proposes the acquisition of rights over assets by highlighting the possibility of a financial return (Art. L. 550-1, 2°), as well as any person who proposes such acquisitions where the acquirer does not manage the assets directly, or where the contract includes a buyback or exchange option with capital appreciation (Art. L. 550-1, 1°). This framework was originally designed to capture atypical investment schemes — the Aristophil manuscript affair being its most notorious example — but it applies equally to a collectible card presented as an investment vehicle.

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 multiple investors; retaining the card on behalf of the buyer with a view to future resale; or granting a buyback option with capital appreciation. A marketplace that simply connects collectors, without any return narrative or third-party management, should in principle remain outside the scope of 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 takes place, and obtain the corresponding registration. Without it, the operator is conducting an unlicensed activity, exposing itself to criminal sanctions, injunctions, AMF blacklisting, and civil liability claims from dissatisfied clients.

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 (Art. 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 issued by the ACPR — and without acting as an agent of an authorised provider or engaging one — is exposed to the criminal offence of unlicensed provision of regulated services.

In practice, this risk is neutralised through appropriate structuring of financial flows. The most common approach is to engage an authorised payment service provider specialising in marketplaces. The operator may also apply for agent status, or rely on the commercial agent exemption (Art. L. 521-3-1) — though the conditions are narrow and frequently misunderstood. The payment architecture must therefore be settled at the design stage.

The third risk concerns AML/CTF. Where an operator provides payment services or acts as an agent, it becomes a reporting entity (Art. L. 561-2) and is subject to customer due diligence, client identification and suspicious transaction reporting obligations to TRACFIN (the French Financial Intelligence Unit). High-value cards also exhibit classic money laundering characteristics: 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 French law (Art. L. 320-1 of the Internal Security Code), gambling is defined as any operation combining three cumulative elements: a financial contribution by the participant, the intervention of chance, and the prospect of a gain. Such activities are in principle prohibited in France, except for those specifically authorised by the ANJ. Several mechanics common in the TCG sector potentially satisfy all three 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 element of chance are clearly present; the prospect of gain — long debated for simple collectible cards — is reinforced by the existence of a liquid secondary market. Live openings and gamification mechanics tied to sales call for the same analysis.

Two points should be noted. First, the promotional prize draw exemption allows free promotional operations, provided participation requires no financial consideration. Second, the experimental regime for monetisable digital item games (JONUM), introduced by the law of 21 May 2024, does not apply here: it targets exclusively digital items, not physical cards. → What is the JONUM regulatory framework? (ORWL article). A chance-based mechanism involving physical cards must therefore be assessed under the classical gambling regime, which is considerably more stringent. The consequences of being classified as unlicensed gambling are among the most severe in this area: criminal sanctions, ANJ intervention, blacklisting, and blocking and delisting of the service.

To ensure the legal security and compliance of your TCG project, contact our lawyers (contact ORWL).

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 multiple 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 fiscal sense. Operators cannot assume which rate or regime applies without a detailed analysis of the products being 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 shift occurs when the activity is conducted independently and habitually — buying with a view to resale, high transaction volumes, organised sales activity, systematic pursuit of a margin. The assessment relies on a set of indicators, but crossing that threshold carries significant tax consequences.

VAT rules. Once classified as a taxable person, the seller must determine their VAT regime. Below the statutory turnover thresholds, they may benefit from the VAT exemption threshold, which relieves them of the obligation to charge VAT — at the cost of losing the right to deduct input tax. Beyond those thresholds, they become a full VAT registrant and face the same questions of rates and classification as those described above for 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 prior notice procedure, 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 are subject to due diligence obligations regarding their professional sellers — verifying their registration and regulatory standing. Failure to carry out the required checks exposes the operator to joint and several liability 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 under Articles 1649 ter A et seq. of the same Code, goes further: since revenues 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 in respect of VAT owed by certain non-EU sellers may also apply.

To ensure the legal security and compliance of your TCG project, contact our lawyers (contact ORWL).

How ORWL 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 engages.

ORWL Avocats knows the business models of this sector, its practices and its regulatory fault lines, enabling us to go straight to the point. This knowledge is underpinned by multidisciplinary expertise brought together in-house: financial and gambling regulation, tax, contract law, data law and litigation risk management are handled in a coordinated manner, not in silos.

Our approach is fundamentally operational. The analysis begins with the actual flows and business model of each operator to identify the regulatory tipping points specific to its service. The firm’s agile structure allows it to adapt to the pace of projects, from initial scoping through to deployment. Deliverables are designed to be immediately actionable: flow and risk mapping, feasibility analysis, working sessions with client teams, a retainer format for recurring needs, and regulatory representation where the project requires it.

Are you developing a TCG service? Secure your project with a specialist team → Book an appointment with ORWL