PANews reported on August 29 that according to Decrypt, the union representing the players of the National Football League (NFL) sued DraftKings on Monday, accusing the sports entertainment giant of refusing to pay relevant payments after its failure in the NFT field. The lawsuit was filed by the National Football League Players Association (NFLPA) in the New York federal court, accusing DraftKings of violating the terms of the licensing agreement that authorized DraftKings to use the images of NFL players in its Reignmakers NFT products.
DraftKings canceled its NFT-driven gaming experience last month, citing “recent legal developments.” The move came after a federal court in Massachusetts denied DraftKings’ motion to dismiss a class-action lawsuit that claimed DraftKings sold NFTs as unregistered securities. While the NFLPA’s lawsuit doesn’t specify the specific amount DraftKings allegedly owes, it suggests the figure is closer to $65 million. Referring to the $261 million in total compensation received by five DraftKings executives since 2021, the union argued that figure is “approximately four times the amount DraftKings owes NFLPA licensors.”
DraftKings' foray into the NFT space follows a 2021 deal to build on Ethereum extension network Polygon. Using the Ethereum network, DraftKings' Reignmakers enabled users to participate in fantasy sports contests based on NFTs, which could be bought and sold on a dedicated marketplace. When DraftKings abruptly shut down its NFT experience in July, the company said "this decision was not made lightly." At the same time, it offered owners of Reignmakers NFTs the opportunity to "surrender" their digital assets in exchange for cash. In its complaint, the NFLPA accused DraftKings of trying to walk away from the deal because the "once-hot NFT market has cooled," adding that "buyer's remorse" was not a sufficient reason for DraftKings to terminate the deal.
