DraftKings and the NFL are gearing up for a $65 million battle.
The NFL Players Association is suing DraftKings after the sports betting giant announced that it was ceasing operations on its NFT project, “Reignmakers” and no longer wanted “to abide by its payment obligations.”
The NFLPA’s lawsuit claims DraftKings, an official sports betting partner of the NFL, still owes the league roughly $65 million in guaranteed payments. It also cites that the income of a group of DraftKings executives totaled $261.1 million since 2021, four times more than the NFL says it is owed.
The NFLPA says DraftKings’ termination of a 2021 contract is a result of “buyers’ remorse” as the NFT market has dramatically cooled down.
“DraftKings’ inability to profitably commercialize the intellectual property it licensed does not excuse performance, and DraftKings must pay what is due,” the NFLPA’s complaint concluded.
DraftKings notified its customers that the company was putting an end to their NFT business due to “recent legal developments,” but there appears to be some disagreement over these details.
Many criticized the non-fungible token business while the industry was hot, turning investors into millionaires overnight, similar to cryptocurrency.
Proponents of the industry claimed that this was just a newer form of art, while others argued it held legitimate utility online.
Detractors called this a bubble that was ready to burst.
An explosion occurred in 2022, just a year after DraftKings signed a name, image, and likeness deal with the NFL.
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Trading volumes had fallen 97 percent by Sept. 2022 according to Frontline, a shocking $2 trillion loss in value.
With the pond having dried up on NFTs, DraftKings now attempts to exit the market and avoid paying a hefty bill to the NFL.
