The NFL Players Association is firing back at DraftKings after the betting operator filed a motion to dismiss damage claims in a $65 million NFT lawsuit.
The players’ union said in a filing Monday the official NFL partner was wrong in saying its actions were not “willful misconduct” in its November motion to dismiss certain claims.
“DraftKings spills a great deal of ink advocating for a definition of ‘willful misconduct’ so demanding it wouldn’t include what DraftKings admits was an intentional ‘failure to make payments,’” the union says in its opposition. “Per DraftKings, so long as not paying Plaintiffs is in DraftKings’ financial self-interest—as it always would be—then the failure to pay can never amount to willful misconduct.”
The NFLPA filed a complaint against DraftKings in August saying the sports betting operator fell through on a deal to use NFL players’ names, images, and likenesses in its NFT marketplace, which it shuttered in July. DraftKings said a ruling by a Massachusetts judge triggered a clause in the contract that determined it wouldn’t have to pay the NFLPA if a regulator found that non-fungible tokens (NFTs) are securities. (The NFLPA argued the judge’s ruling didn’t make a definitive stance.)
DraftKings argued in a November filing that “this type of reasonable business decision is the opposite of bad faith.” On Monday, the NFLPA said “this assessment is logically incoherent as well as factually wrong.” The union says the betting company still owes it about $65 million for breaching its contract.
The Massachusetts ruling is related to a separate case alleging the NFT marketplace violated securities law. In July, the judge denied DraftKings’ motion to dismiss the suit. Later that month, DraftKings closed down the marketplace, citing “recent legal developments.” DraftKings’ move was preemptive, because that case still hasn’t reached a conclusion. A week later, the company sold back VSiN, a sports betting radio and television channel it bought in 2021 for about $70 million.
NFTs are unique assets that exist on the blockchain and cannot be replicated; they can represent individual identities, works of art, or property rights. NFTs became popular a few years ago, prompting DraftKings to launch its marketplace in 2021, but they have significantly declined since reaching peak trading volume in 2022.
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