7 months ago
The National Football League Players Association (NFLPA) has filed a suit against DraftKings Inc., seeking astir $65 cardinal successful damages aft the sports betting institution abruptly unopen down its NFT-based phantasy sports platform, Reignmakers.
The lawsuit, filed successful the US District Court for the Southern District of New York, alleges that DraftKings breached its licensing statement with the NFLPA by terminating payments owed nether the contract.
The statement allowed DraftKings to usage the likenesses of NFL players successful Reignmakers, which enabled users to purchase, trade, and usage non-fungible tokens (NFTs) linked to nonrecreational athletes successful phantasy sports contests.
DraftKings closed Reignmakers successful July, citing “recent ineligible developments” arsenic the crushed for its decision. This enactment followed a ruling successful Massachusetts national tribunal that denied DraftKings’ question to disregard a class-action suit alleging that the NFTs sold connected the level constituted unregistered securities.
The NFLPA argues that the $65 cardinal owed is based connected minimum guarantees specified successful the contract, which DraftKings allegedly failed to meet.
According to the complaint, the institution has not made immoderate payments since August 1, 2024, contempt erstwhile obligations. The NFLPA claims that DraftKings’ determination to halt payments is driven by the downturn successful the NFT market, which has importantly cooled since the heights of its popularity.
DraftKings justified its determination by referencing a clause successful the declaration that allows termination if a “government, regulatory, oregon adjudicatory body” determines that the NFTs are securities. However, the NFLPA contends that the tribunal ruling successful Massachusetts did not definitively categorize the NFTs arsenic securities, and therefore, the declaration remains valid.
The suit besides highlights the important compensation received by DraftKings executives — implicit $261 cardinal collectively since 2021 — arguing that this fig is astir 4x what the institution owes the NFLPA nether the licensing agreement.
The lawsuit has been assigned to US District Judge Analisa Torres, who has acquisition with cases involving integer assets. Her rulings could person broader implications for the ineligible attraction of NFTs and different integer collectibles, an country inactive fraught with ineligible ambiguity.
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