NFL Players Association Suing DraftKings

The NFL Players Association is taking legal action against one of the nation's biggest sports betting sites.

On Tuesday, the Association filed a lawsuit in the Southern District of New York against the Fantasy, sports betting, and online casino behemoth DraftKings for what is being called “anticipatory breach of contract.”

While short on specifics, the civil suit is rumored to surround DraftKings’ decision to close its Non-fungible tokens (NFT) last month amid legal troubles surrounding the practice. There has yet to be any clarification of the rumor as court documents surrounding the case are under seal.

The two entities had previously teamed up to offer such NFTs. One was in 2021 in partnership with OneTeam Partners, in which the sportsbook's marketplace offered “licensing rights for active NFL players” for gamified NFT collections. Another was in 2022 in partnership with Pixel Vault, in which limited-edition NFL player cards were offered.

The NFT/DraftKings relationship that raised a few eyebrows was the one with Reignmakers. A recent DraftKings statement on the closure of that market read, “After careful consideration, DraftKings has decided to discontinue Reignmakers and our NFT Marketplace, effective immediately, due to recent legal developments. This decision was not made lightly, and we believe it is the right course of action.”

Closing the DraftKings’ NFT market?

DraftKings has run into some problems with its NFT offerings in Massachusetts. A 2023 lawsuit filed by Justin Dufoe has the company rethinking its presence in the NFT market.

The suit alleges that DraftKings NFTs, available through the company’s marketplace, amounted to unregistered securities, which DraftKings obviously did not consider.

DraftKings's attempt to dismiss the charges in the state was recently dismissed by a Massachusetts District Court judge, allowing the suit to proceed. Perhaps not coincidentally, DraftKings announced the closure of its NFT market shortly after.

Damages

It is difficult to identify just what the NFLPA may be seeking in the civil suit, but there are some tea leaves to be read. The NFLPA’s 2023 annual report identified $32.4 million owed to them by OneTeam Partners, the company that facilitated the original NFT deal between the Players Association and DraftKings.

One Team Partners was also instrumental in bringing the NFLPA and Pixel Vault together for another NFT offering.

Protecting its players

The NFLPA’s job is largely to protect its membership. NFT revenue from its membership had been earmarked for retirement benefits for its members and their families. Revenue from the selling of players’ images and likenesses has bolstered health and life insurance and pension programs.

The $32.4 million would go a long way in assisting in the necessary programs and is likely designed to show that the NFLPA is not playing around regarding the exploitation of its players.

Following last week's filing, the NFLPA’s relationship with OneTeam Partners seems to be intact. OneTeam was instrumental in negotiating recent favorable player terms for the Madden video game and still offered NFL trading cards to its clientele.

Where the suit goes is anyone’s guess, but there is an established sentiment that more such suits could follow.