The National Football League Players Association (NFLPA) has filed a lawsuit against DraftKings, one of the NFL’s official betting partners, for breach of contract.
The legal dispute stems from DraftKings’ recent decision to shut down its non-fungible token (NFT) marketplace, a move that the NFLPA claims violates an agreement between the two parties.
The lawsuit was filed on August 26 in federal court in the Southern District of New York. The NFLPA argues that DraftKings is attempting to terminate a 2021 contract that granted the company the rights to use players’ names, images, and likenesses for its now-closed NFT marketplace.
According to the NFLPA, DraftKings still owes the association around $65 million in guaranteed payments and is attempting to avoid these payments by shutting down the marketplace.
DraftKings officially announced the shutdown of its Reignmakers NFT game and marketplace at the end of July, following a market downturn and a legal setback in which the company is being sued by NFT buyers for allegedly selling unregistered securities.
The lawsuit notes that the once “white-hot” NFT market has cooled significantly, but argues that financial losses do not justify breaking a contract.
It also emphasizes that “buyers’ remorse is not a basis to terminate a contract,” and that DraftKings is still obligated to meet its financial commitments under the agreement.
The lawsuit also points out that while DraftKings is claiming financial difficulties in the NFT space, top executives at the company have received substantial income since the contract was signed. The suit claims that since 2021, DraftKings executives have earned a total of $261.1 million, which is over four times the amount the NFLPA says it is owed.
