NFL Players Union Takes DraftKings to Court Over NFT Deal
The National Football League Players Association (NFLPA) has sued DraftKings, alleging that the sports gambling company failed to meet its financial commitments related to a now-discontinued non-fungible token (NFT) project.
According to the August 26 lawsuit, DraftKings breached the license agreement that allowed the company to use NFL players’ images in Reignmakers, a fantasy sports game where users could buy and trade player NFTs.
DraftKings shut down the game last month after a court denied the company’s attempt to dismiss a class-action lawsuit alleging it had sold NFTs as unregistered securities.
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The NFLPA argues that DraftKings owes around $65 million due to the game’s closure. The lawsuit also highlights that DraftKings executives have collectively received $261 million since 2021, four times the amount the NFLPA says is owed.
When DraftKings ended Reignmakers, it described the decision as difficult and offered NFT holders a buyout option. However, the NFLPA maintains that DraftKings attempted to back out of the agreement simply because the NFT market has declined, arguing that “buyers’ remorse” is not a valid reason to end the deal.
DraftKings may defend itself by arguing that it has the right to terminate the contract if regulators classify its NFTs as securities. However, legal experts doubt this defense will succeed, pointing out that while the court allowed the class-action lawsuit to proceed, it did not definitively rule that DraftKings’ NFTs are unregistered securities.
The lawsuit remarks:
At the end of the day, despite DraftKings’ best efforts to muddy the waters, this case is extraordinarily simple. DraftKings’ inability to profitably commercialize the intellectual property it licensed does not excuse performance, and DraftKings must pay what is due.
The case has been assigned to US District Judge Analisa Torres, who has previously handled the US Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs.
As the legal battle progresses, the outcome could have implications for both DraftKings and the broader intersection of sports and digital assets.
In other news, Dapper Labs has recently settled a class-action lawsuit for $4 million. The lawsuit accused the video game developer of selling unregistered securities through its NBA Top Shot Moments NFTs.
Gode is a Web3 Market Analyst who researches the most important industry events and interprets how they affect the wider Web3 space. Her formal education in media culture & digital rhetoric allows her to employ a methodical approach to evaluating critical Web3 news data, including large-scale events and the wider social sentiment within the ecosystem.
Gode is a mutilingual professional, having studied in multiple universities all across Europe. This allows her to have a one-of-a-kind opportunity to analyze Web3 social sentiments spanning different cultures and languages and, in turn, develop a much deeper understanding of how the Web3 space is growing within different communities. With the rest of her team, Gode works to identify crucial crypto news patterns and provide unbiased and data-driven information.
Gode’s passions include working and communicating with people, and when she’s not researching Web3 news, she spends her time traveling and watching true crime documentaries.
