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DraftKings Faces $65M Lawsuit from NFL Players Association
DraftKings shut down its Reignmakers NFT product, but its high-profile partner wants to get paid.
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The NFL Players Association is suing DraftKings, claiming the company owes nearly $65M for unpaid obligations related to its defunct NFT fantasy game.
What's the scoop?
- Licensing Dispute: The dispute involves a licensing agreement allowing DraftKings to use NFL players' likenesses in its Reignmakers NFT product. DraftKings ended the agreement after closing the Reignmakers platform last month.
- Legal Background: The shutdown followed a legal setback for DraftKings, as a Massachusetts federal court denied the company’s motion to dismiss a class-action lawsuit claiming the NFTs were unregistered securities.
- Termination Clause: DraftKings claims a clause lets them exit if regulators deem NFTs as securities. The NFLPA disagrees, saying market conditions and regret don’t excuse DraftKings from their obligations.
- Financial Context: The NFLPA’s lawsuit points out that DraftKings executives received $261M in compensation since 2021, roughly four times the amount the union claims it’s owed.
Bankless Take:
Legal pressures continue to plague NFTs. While this particular case involves specific agreements and commitments between companies, it showcases a dicey road ahead and casts NFTs in a negative light, portraying them — as many were during 2021 — as a corporate, cash-grab tactic rather than a new method for producing and distributing media.