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In the New York Southern District Court, DraftKings has moved to have a lawsuit filed by the National Football League Players Association (NFLPA) dismissed. Alleging that DraftKings violated their agreement to license NFL players’ names, photos, and likenesses, the NFLPA is requesting more than $60 million. According to a Bloomberg Law report, the bookmaker contends the lawsuit lacks basis for deliberate wrongdoing.
The conflict began after DraftKings shut down its Non-Fungible Token (NFT) business in July 2024, a move that led to the termination of its licensing deal with the NFLPA. The lawsuit claims DraftKings’ actions were financially motivated.
“The impetus for DraftKings’ decision to repudiate its license agreement with Plaintiffs is simple: the once white-hot market for NFTs has cooled down,” stated the NFLPA in its complaint. “Buyers’ remorse, however, is not a basis to terminate a contract.”
DraftKings maintains that it acted within its rights, emphasizing it did not act maliciously. The company stated, “As New York courts have repeatedly held, acting out of self-interest alone precludes a finding of bad faith or intentional wrongdoing.”
DraftKings also cited growing legal ambiguities surrounding NFTs, including their classification as securities, as a key factor in the dispute. This issue ties into another ongoing case, Dufoe v. DraftKings.
In this case, plaintiff Justin Dufoe accused the company of operating an unregistered securities exchange after losing over $14,000 on NFTs. A judge denied DraftKings’ motion to dismiss the lawsuit in July 2024, heightening regulatory scrutiny.
DraftKings argued that recent rulings and regulatory developments made continuing its NFT Marketplace unsustainable. “This dramatic change in legal and regulatory risk…made it materially impracticable for DraftKings to benefit from the rights granted under the Agreement,” the company stated in its motion.
DraftKings originally launched its NFT platform, Reignmakers, in 2021, partnering with Autograph to offer exclusive digital collectibles. By 2024, however, legal challenges and market declines forced the company to close the platform.
“After careful consideration, DraftKings has decided to discontinue Reignmakers and our NFT Marketplace, effective immediately, due to recent legal developments,” a spokesperson confirmed in July.