NFL Players Union Sues DraftKings For NFT Deal

The labor union representing athletes from the National Football League (NFLPA) sued sports gambling platform Draftkings on Aug. 26, alleging the betting behemoth is breaching their contract with its NFT platform.

In the lawsuit filed in the New York Southern District Court, the NFLPA is accusing DraftKings of violating the terms of a licensing agreement, which allowed the betting platform to use NFL players’ NIL (name, image, and likeness) in its NFT marketplace 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 suit 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 said DraftKings ended the agreement on July 29, but still owes the collective approximately $65 million.

According to the lawsuit, DraftKings said a July ruling from a Massachusetts judge claimed the firm’s digital trading cards were securities. The ruling would trigger a clause in its contract with the NFLPA to end the deal if a government or regulatory body determined the NFTs are securities.

The NFLPA, however, claims the ruling doesn’t make a definitive decision for either party, meaning payments shouldn’t be stopped.

Though the NFLPA’s lawsuit doesn’t state an exact figure in its lawsuit it references a $261 million total compensation paid to five DraftKings executives since 2021, which the union claims is roughly four times what they are owed.

Other Sports NFTs Lawsuits

This in the intersection of NFTs and sports lawsuit is not new.

In June 2024, Dapper Labs, the firm behind NBA Top Shot settled a multi-year class action lawsuit with customers who argued that the NFTs constituted illegally offered securities. The firm was forced to pay $4 million.

A few years earlier, in 2022, Nike filed a lawsuit against StockX, alleging the online marketplace was reselling counterfeits of their sneakers as NFTs. The company claimed the NFTs, which featured images of Nike-branded sneakers infringed on their trademark.