DraftKings and NFL Players Association seek to settle NFT lawsuit
DraftKings and the NFL Players Association have reached a non-binding agreement to settle a legal dispute over DraftKings’ unilateral termination of a contract between the parties in 2023.
On Monday, both parties filed a motion with the New York Southern District Courts to halt proceedings for 60 days, allowing both sides to execute a mutual settlement agreement in the pending lawsuit brought against DraftKings by the NFL Players Association in August 2024.
The lawsuit was filed following the sportsbook’s July announcement that it was closing the DraftKings Marketplace which sold NFTs resembling player images for use in its Rightmakers fantasy sports game, which has also since been discontinued.
DraftKings terminated the contract on the premise that NFTs can be considered securities, citing a ruling in another case brought against the company, where a Federal judge in Boston determined that NFTs may be considered unregistered securities.
However, the NFL Players Association argued that the Massachusetts judge’s decision in the previous class-action lawsuit brought against DraftKings did not constitute a precedent to determine that NFTs are not an investable security.
The lawsuit stated that “the impetus for DraftKings’ decision to repudiate its license agreement with Plaintiffs is simple: the once white-hot market for NFTs has cooled down. Buyers’ remorse, however, is not a basis to terminate a contract.”
In response, DraftKings said the termination was “expressly permitted by several provisions in the agreement.”
In November, DraftKings filed a motion to dismiss the case, claiming that “acting out of self-interest alone precludes a finding of bad faith or wrongdoing.” However, the motion was denied.
While no financial terms of the settlement were disclosed in the recent motion, previous legal documents stated that the sum owed by DraftKings could be as high as US$60 million.
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