The Nationwide Soccer League Gamers Affiliation (NFLPA) has filed a lawsuit in opposition to DraftKings Inc. in search of roughly $65 million in damages after the sports activities betting firm abruptly shut down its NFT-based fantasy sports activities platform Reignmakers.
The lawsuit, filed within the U.S. District Court docket for the Southern District of New York, alleges that DraftKings breached its licensing settlement with the NFLPA by ceasing funds owed beneath the settlement.
The deal allowed DraftKings to make use of likenesses of NFL gamers in Reignmakers, permitting customers to purchase, commerce and use non-fungible tokens (NFTs) related to skilled athletes in fantasy sports activities competitions.
DraftKings shut down Reignmakers in July, citing “latest authorized developments” as the explanation for its choice. The motion follows a Massachusetts federal courtroom ruling that denied DraftKings' movement to dismiss a class-action lawsuit alleging that NFTs bought on the platform constituted unregistered securities.
The NFLPA claims the $65 million owed is predicated on minimal ensures within the contract that DraftKings allegedly failed to satisfy.
Based on the criticism, the corporate has not made any funds since August 1, 2024, regardless of earlier commitments. The NFLPA says DraftKings' choice to cease funds is pushed by the decline within the NFT market, which has cooled considerably because the peaks of its reputation.
DraftKings justified its choice by citing a clause within the contract that permits for termination if “a governmental, regulatory or judicial authority” determines that the NFTs are securities. Nonetheless, the NFLPA argues that the Massachusetts courtroom choice didn’t definitively categorize NFTs as securities, and subsequently the contract stays in impact.
The lawsuit additionally highlights the substantial compensation DraftKings executives have obtained — greater than $261 million mixed by way of 2021 — arguing that determine is roughly 4x what the corporate owes the NFLPA beneath the licensing settlement.
The case was assigned to U.S. District Choose Analisa Torres, who has expertise in circumstances involving digital property. Its ruling may have wider implications for the authorized remedy of NFTs and different digital collectibles, an space nonetheless fraught with authorized ambiguity.
