Plaintiffs in the non-fungible token (NFT) class action lawsuit against the sports betting giant filed for preliminary approval of a $10 million settlement.
Plaintiffs in the non-fungible token (NFT) class action lawsuit against DraftKings filed for preliminary approval of a $10 million settlement. The plaintiffs, who purchased DraftKings’ Reignmakers digital game pieces, told the court the settlement was “fair, reasonable, and adequate.”
The motion, filed in the U.S. District Court of Massachusetts Wednesday, said the parties reached the settlement after lengthy negotiations. It stated,
“After a year and a half of vigorous litigation, the Parties have negotiated, at arm’s length, a proposed Settlement of all claims in the above captioned litigation (the “Action”) for $10 million in cash. This outstanding result was reached only after a thorough investigation of the claims, fully briefing.”
The initial lawsuit, filed in Mar. 2023, alleged DraftKings’ sale of NFTs violated both state and federal securities laws. Although it had “home court advantage,” the Boston-based sports betting company failed to quash the suit. In July 2024, Judge Denise J. Casper denied a DraftKings’ motion to dismiss the case, allowing it to proceed.
Soon after the failed dismissal, DraftKings discontinued offering NFTs and closed its marketplace. “After careful consideration, DraftKings has decided to discontinue Reignmakers and our NFT Marketplace, effective immediately, due to recent legal developments,” the company said in a statement. “This decision was not made lightly, and we believe it is the right course of action.”
If approved, the settlement will benefit anyone who bought DraftKings’ NFTs between Aug. 11, 2021, and the final judgment date. The funds will be used to pay all members of the class action, along with the suit’s legal and administrative costs. DraftKings won’t be eligible to retain any unclaimed funds.
This is the second legal settlement stemming from DraftKings’ ill-fated NFT business. After DK abruptly closed its NFT Marketplace, the NFL Players Association sued the sports betting company for allegedly breaking an agreement to use NFL players’ names, images, and likenesses on NFTs. In January, DraftKings and the NFL players’ union reached a settlement in that case.
Amy Calistri got her high school letter in golf and hasn’t golfed since. She has a collegiate letter in wrestling, but never wrestled. She was arguably the worst catcher in IBM’s coed softball league. But she is a hardcore sports fan, having spent her formative years yelling from Boston Garden’s second balcony and Fenway’s cheap seats. Amy loves when she can combine her love of sports with her business acumen. She has covered the sports and gambling industries for more than 20 years, writing for outlets including Bluff Magazine, PokerNews, and OnlineGambling.com. Amy co-hosted the popular radio show Keep Flopping Aces and co-wrote Mike “The Mouth” Matusow’s memoir, Check-Raising the Devil. Amy is also published in the areas of economics, investing, and statistics.
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