The NFL Players Association has sued DraftKings for roughly $65 million after the operator closed its NFT business in July.
The lawsuit filed last week alleges the sportsbook intends to terminate a deal signed in 2021 with the NFLPA for its since-closed Reignmakers NFT business and not pay the remainder of the agreement.
The deal permitted DraftKings to use players' name, image and likeness for digital, non-fungible tokens (NFTs) that could be used to compete against other players in contests similar to traditional and daily fantasy football contests.
Users could also speculate on the value of those NFTs.
DraftKings closed its NFT operation in July after a federal judge permitted a class action lawsuit to march forward that alleged Reignmakers were unregistered securities.
"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 lawsuit said. "DraftKings is also facing a civil lawsuit and regulatory inquiries into its product. Buyers' remorse, however, is not a basis to terminate a contract."
Several companies of the ilk — like Commonwealth and NBA Top Shot — have faced similar regulatory pushback on allegations that the companies were selling unregistered securities.
Dapper Labs, which owns NBA Top Shot, was forced to pay $4 million as part of a class action lawsuit from disgruntled customers that alleged the company was illegally offering securities.
And Commonwealth (which takes investments from users for future winnings on horses and golfers) was forced to restructure its processes and refund investments as a result of comparable regulatory crackdowns.
A DraftKings spokesperson said a comment was not available at this time.
The lawsuits come during a period of change for DraftKings. The company attempted earlier this month to impose a tax surcharge on all bettors in high-tax states such as New York, Illinois and Pennsylvania. The sportsbook eventually walked back that provision a few weeks later amid widespread backlash.
