Prominent sports betting operator DraftKings has agreed in principle to settle a lawsuit filed last year by the National Football League Players Association (NFLPA).
According to a Reuters report, Monday’s joint filing in a New York court said that the two parties asked a federal judge to pause the lawsuit while they work out a final agreement.
The football union filed a lawsuit against the sportsbook in November 2024 for more than $60 million for breaking the agreement to use NFL players’ names, images, and likenesses on Non-Fungible Tokens (NFT).
DraftKings partnered with the NFLPA in 2021 but decided to end its NFT business, leading the NFLPA to pursue a restructured deal.
The lawsuit claims that DraftKings ended the amended contract after a federal judge, in a different lawsuit against the sportsbook, ruled that tokens could be unregistered securities.
NFTs under fire
The NFLPA argued in its lawsuit that the Boston judge’s ruling did not allow for the termination of the deal.
"The impetus for DraftKings' decision to repudiate its license agreement with Plaintiffs is simple: the once white-hot market for NFTs has cooled down," the NFLPA said in the lawsuit. "Buyers' remorse, however, is not a basis to terminate a contract."
DraftKings refused to pay the licensing fee, leading the NFLPA to file the lawsuit. The sportsbook argued that numerous provisions “expressly” allowed DraftKings to terminate the contract and asked the court to dismiss the lawsuit.
DraftKings shut down its NFT market, which opened in 2021, after that Boston judge denied the sportsbook’s request in July 2024 to dismiss the other lawsuit, Dufoe vs. DraftKings.
Customers claim in that lawsuit that DraftKings promised “hundreds of millions of dollars in profits” for reselling digital fantasy playing cards. The judge said that the fungible tokens were unregistered securities and that DraftKings was operating a securities exchange, making them liable in the plaintiffs’ pursuit of repayment.
Other legal issues
DraftKings is also in a legal battle with the Major League Baseball Players Association. The union’s MLB Players Inc. filed two lawsuits against several sportsbooks for using players' names, images, and likenesses without permission to promote gaming products on social media and apps.
DraftKings has filed a motion to dismiss that case, arguing that the fair use doctrine allows the company to utilize the copyrighted material without permission.
Last month, another lawsuit was filed against the sports betting operator for data-sharing practices. A customer claims that DraftKings violated the Video Privacy Protection Act by sharing viewing habits without permission.
