NFL Players Union Sues DraftKings Over NFT Dispute

According to PANews, the union representing NFL players has filed a lawsuit against DraftKings, accusing the sports entertainment giant of failing to make payments related to its NFT ventures. The lawsuit, initiated by the NFL Players Association (NFLPA) in a New York federal court, alleges that DraftKings breached the terms of a licensing agreement that allowed the company to use NFL players' likenesses in its Reignmakers NFT product. Last month, DraftKings discontinued its NFT-driven gaming experience, citing 'recent legal developments.' This decision followed a Massachusetts federal court's dismissal of DraftKings' motion to dismiss a class-action lawsuit, which claimed that the company sold NFTs as unregistered securities. While the NFLPA's lawsuit does not specify the exact amount DraftKings allegedly owes, it suggests the figure is close to $65 million. The union also highlighted that since 2021, five DraftKings executives have collectively received $261 million in total compensation, arguing that this amount is roughly four times what DraftKings owes the NFLPA in licensing fees. DraftKings had entered the NFT space in 2021, agreeing to build on the Ethereum scaling network Polygon. Through the Ethereum network, DraftKings' Reignmakers allowed users to participate in NFT-based fantasy sports competitions, with these NFTs being tradable on a dedicated marketplace. When DraftKings abruptly shut down its NFT experience in July, the company stated that the decision was not made lightly. At the same time, it offered Reignmakers NFT owners the opportunity to 'surrender' their digital assets in exchange for cash. The NFLPA's lawsuit accuses DraftKings of attempting to back out of the deal because the once-booming NFT market has cooled, adding that 'buyer's remorse' is not a sufficient reason for DraftKings to terminate the agreement.