DraftKings Avoids NFLPA Lawsuit Over Unpaid NFT Royalties on NFT.EU

U.S. sports betting platform DraftKings has reached a settlement with the National Football League Players Association (NFLPA), which accused the company of non-payment for using player likenesses in an NFT collection linked to the Reignmakers fantasy game.

Preliminary Settlement

Both parties have notified a federal court in New York of a preliminary agreement, requesting a 60-day postponement of proceedings — until March 28 — to finalize the deal. Details of the settlement remain undisclosed. The final decision will rest with Judge Analisa Torres, well known to the crypto community for presiding over the SEC vs. Ripple case.

NFTs, Contracts, and Disputes

DraftKings partnered with the NFLPA in 2021 to create collectible NFTs featuring NFL players, which owners could use in the Reignmakers fantasy game. In July 2023, however, DraftKings shut down its NFT marketplace and ceased payments to the association.

DraftKings claimed the contract allowed it to terminate the agreement after a court reportedly deemed these NFTs to be securities under U.S. securities law. In response, the NFLPA filed a lawsuit in August 2023, allegedly seeking $65 million in damages (though exact figures were redacted from court filings). The association also claimed DraftKings threatened to end its NFT offerings altogether in 2023, but both parties later agreed to review the contract terms.

Super Bowl and NFT Slowdown

The settlement emerges just two weeks before the Super Bowl on February 9 in New Orleans. In 2022, the biggest sporting event in the U.S. featured major ad campaigns from crypto exchanges Coinbase, Crypto.com, and the now-bankrupt FTX — but crypto ads vanished by 2023.

Despite legal woes and an evolving market, the NFT sector is showing moderate growth. According to CryptoSlam, $8.9 billion worth of NFTs were sold in 2024 — 2,3% more than the previous year, yet still far short of the $23.7 billion record in 2022.

Shaquille O’Neal’s Case

A similar situation previously ensnared former NBA star and sports commentator Shaquille O’Neal, who agreed to pay $11 million to settle a class-action lawsuit over his endorsement of Astrals NFT collection. Created by artist Damien Guimoneau, Astrals offered users a “virtual world” experience, with O’Neal as a major ambassador. However, token values crashed, fueling investors’ grievances.