The NFL Players Association (NFLPA) has launched a lawsuit against betting partner DraftKings for alleged breach of contract. The suit claims the sportsbook giant owes around $65 million from a licensing agreement. The product allows consumers to buy NFTs for use in fantasy sports contests.
ESPN reports that the case was filed last week in federal court in the Southern District of New York. It claims that the operator planned to end a 2021 agreement with the NFLPA granting rights to use player likenesses for its now-closed NFT marketplace, avoiding further guaranteed payments. The bookmaker then unexpectedly shut its NFT operation on July 30, citing legal issues.
Why did DraftKings close its NFT marketplace?
The company said in a statement at the time: “After careful consideration, DraftKings has decided to discontinue Reignmakers and our NFT Marketplace, effective immediately, due to recent legal developments. This decision was not made lightly and we believe it is the right course of action.”
Most documents in the civil case are sealed, with no specified date for unsealing. While NFLPA lawyers didn’t reveal the lawsuit’s exact sum, they referenced the $261.1 million earned by five DraftKings executives since 2021. They stated that “the total compensation of just these five aforementioned officers since 2021 is approximately quadruple of what DraftKings owes the NFLPA Licensors.”
“The impetus for DraftKings’ decision to repudiate its license agreement with Plaintiffs is simple: the once white-hot market for NFTs has cooled down,” NFLPA legal representatives wrote in the complaint. “DraftKings is also facing a civil lawsuit and regulatory inquiries into its product. Buyers’ remorse, however, is not a basis to terminate a contract.”
DraftKings faces another lawsuit in Massachusetts, accused of breaching securities laws through its NFT marketplace. The company cited a recent Massachusetts case decision as the reason for closing its NFT marketplace and ending its NFLPA contract.
ReadWrite has reached out to the NFL Players Association and DraftKings for comment.
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