DraftKings Faces Lawsuit Over Termination of NFLPA NFT Marketplace Deal
DraftKings is embroiled in a legal dispute with the NFL Players Association (NFLPA) over the sudden closure of its NFT Marketplace and Reignmaker products. The NFLPA filed a lawsuit against DraftKings, alleging the gaming company terminated the contract prematurely and without fulfilling its financial obligations.
DraftKings Terminates Agreement with NFLPA
According to the complaint, DraftKings informed the NFLPA on July 30 of its intention to shut down the NFT Marketplace and Reignmakers, stating it had no plans to honor the remaining terms of the contract.
The NFLPA argued that DraftKings’ reason for termination—citing a class action lawsuit regarding the NFT products—was unfounded.
DraftKings claimed that a judge’s decision to allow the lawsuit to proceed met the contract’s termination clause, which allowed for cancellation if the NFTs were ruled to be securities.
However, the court’s decision only denied DraftKings’ motion to dismiss the class action suit, and no ruling has yet determined whether the NFTs are unregulated securities.
The NFLPA contends that DraftKings cannot rely on “buyers’ remorse” to justify terminating the agreement, and it must continue to honor the deal.
Financial Stakes in the Dispute
While many financial details are redacted, the lawsuit implies that DraftKings owes the NFLPA more than $60 million.
According to the complaint, the combined compensation of several high-ranking DraftKings executives—totaling approximately $260 million since 2021—amounts to about four times what the company allegedly owes the NFLPA under the agreement.
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