DraftKings, a major US sports betting platform, has reached a settlement with the National Football League Players Association (NFLPA) over a lawsuit alleging the company failed to pay for using NFL player likenesses in non-fungible tokens (NFTs).
Settlement Details
In a joint letter dated January 27, DraftKings and the NFLPA informed New York federal Judge Analisa Torres that they had mediated the dispute and reached a tentative settlement. The agreement is pending a finalized settlement document. Both parties requested a 60-day stay of the case, giving them until March 28 to finalize the deal.
The specific terms of the settlement were not disclosed, but Judge Torres must approve the agreement before it becomes official. Judge Torres is well-known in the crypto community for overseeing the high-profile Ripple case involving the Securities and Exchange Commission (SEC).
Background on the Dispute
DraftKings partnered with the NFLPA in 2021 to create collectible NFTs featuring NFL players, which could be traded as part of its fantasy sports game, Reignmakers.
In July 2023, DraftKings shut down its NFT marketplace and ceased payments to the NFLPA under their contract. The company claimed it had the right to terminate the agreement after a federal court ruled that NFTs could fall under securities regulations based on the Securities Act and the Exchange Act.
In response, the NFLPA filed a lawsuit in August, reportedly seeking damages of approximately $65 million. While the exact amount was redacted from the court filings, the lawsuit also alleged that DraftKings had threatened to stop offering NFTs altogether in 2023. The two parties later agreed to restructure their contract before moving toward settlement.
Settlement Timing and Broader Context
The settlement comes just weeks before the NFL’s Super Bowl, scheduled for February 9 in New Orleans, Louisiana.
The Super Bowl was once a hotspot for crypto-related advertisements, with companies like Coinbase, Crypto.com, and FTX running ads during the event. However, following FTX’s collapse in late 2022, crypto ads were absent from last year’s Super Bowl.
While NFT sales grew by 2.3% in 2024, reaching $8.9 billion, the market remains far below its 2022 peak of $23.7 billion, according to CryptoSlam data.
