Last updated: January 30, 2025
DraftKings and the NFL Players Association (NFLPA) have agreed to settle their NFT licensing dispute, requesting a 60-day stay to finalize the agreement. The lawsuit, filed last August, sought compensation for an alleged breach of contract related to Reignmakers, DraftKings’ now-defunct NFT-based fantasy sports platform.
DraftKings (NASDAQ: DKNG) and the NFL Players Association (NFLPA) settled a suit filed by the players union that was about the gaming firm’s now closed nonfungible tokens (NFTs) marketplace.
In a letter to Judge Analisa Tores of the US District Court for the Southern District of New York, the two sides requested a 60-day stay of action running through March 28, adding they’ve reached an agreement to end the litigation.
The parties have negotiated their dispute and agreed to a non-binding settlement in principle, pending mutual execution of a final settlement agreement,” the letter says. “The parties respectfully request a 60-day stay of this action (including a stay on a ruling on Defendants’ pending motion to dismiss) to allow the parties to sign a final settlement agreement.”
The financial conditions of the agreement were not stated in the letter, although a court filing last August suggested that DraftKings might owe the NFL players’ labor group up to $65 million. That wasn’t directly expressed in the document, but attorneys for the NFLPA made an analogy between the five DraftKings executives such as co-founders Jason Robins (who is now chief executive officer), Matt Kalish, and Paul Liberman, and the amount they owed the union and that wages were around $65 million.
The online sportsbook operator rolled out DraftKings Marketplace in July 2021. In December of that year, the gaming company signed an agreement with OneTeam Partners, the group licensing partner of the NFLPA, that granted the gaming company “licensing rights for active NFL players” to be used on the Reignmakers fantasy sports platform.
Reignmakers, which was also shuttered with the marketplace, was the fantasy game in which participants used purchased NFTs to build mythical sports rosters. DraftKings was to pay the NFLPA for the use of players’ names, images, and likenesses in the fantasy game.
In August, the NFL players’ union sued DraftKings for monetary damages based on what it called an “anticipated breach of contract.” The gaming firm asserted that it would have a reason to modify the NFLPA contract if NFTs were determined to be securities.
In another NFT case against DraftKings, a judge concluded that the tokens are potentially unregistered securities, but the NFLPA contended that case didn’t resolve whether or not NFTs constitute investable securities under the language of its contract with the gaming firm. Lawyers for the plaintiffs would later maintain that DraftKings’ “buyer’s remorse” wasn’t sufficient cause to terminate the contract.
DraftKings Marketplace went live in July 2021 with some fanfare, such as NFT partnerships with a roster of famous athletes. The timing seemed right because NFTs were selling at dizzying heights when it went live, but then they cratered shortly after.
Those price drops prompted lawsuits, such as the one above in which a Massachusetts judge held NFTs could be unregistered securities. NFT prices have not yet rebounded in earnest and market liquidity is still thin.
Amidst the legal woes, DraftKings pulled the plug on Marketplace and Reignmakers in July and the settlement with the NFLPA may be one of the company’s last acts in the NFT business.
