The collective claims DraftKings owes them roughly $65 million.
The labor union representing athletes from the Nationwide Soccer League (NFLPA) sued sports activities playing platform Draftkings on Aug. 26, alleging the betting behemoth is breaching their contract with its NFT platform.
Within the lawsuit filed within the New York Southern District Court docket, the NFLPA is accusing DraftKings of violating the phrases of a licensing settlement, which allowed the betting platform to make use of NFL gamers’ NIL (title, picture, and likeness) in its NFT market dubbed Reignmakers.
“The impetus for DraftKings’ decision to repudiate its license agreement with Plaintiffs is simple: the once white-hot market for NFTs has cooled down,” the swimsuit reads. “DraftKings is also facing a civil lawsuit and regulatory inquiries into its product. Buyers’ remorse, however, is not a basis to terminate a contract.”
The NFLPA mentioned DraftKings ended the settlement on July 29, however nonetheless owes the collective roughly $65 million.
In line with the lawsuit, DraftKings mentioned a July ruling from a Massachusetts choose claimed the agency’s digital buying and selling playing cards have been securities. The ruling would set off a clause in its contract with the NFLPA to finish the deal if a authorities or regulatory physique decided the NFTs are securities.
The NFLPA, nevertheless, claims the ruling doesn’t make a definitive determination for both occasion, which means funds shouldn’t be stopped.
Although the NFLPA’s lawsuit doesn’t state an actual determine in its lawsuit it references a $261 million whole compensation paid to 5 DraftKings executives since 2021, which the union claims is roughly 4 instances what they’re owed.
Different Sports activities NFTs Lawsuits
This within the intersection of NFTs and sports activities lawsuit will not be new.
In June 2024, Dapper Labs, the agency behind NBA High Shot settled a multi-year class motion lawsuit with clients who argued that the NFTs constituted illegally supplied securities. The agency was compelled to pay $4 million.
A number of years earlier, in 2022, Nike filed a lawsuit towards StockX, alleging the web market was reselling counterfeits of their sneakers as NFTs. The corporate claimed the NFTs, which featured pictures of Nike-branded sneakers infringed on their trademark.
