DraftKings Waves Goodbye to Its NFT Marketplace Amid Looming Lawsuit

In a major blow to its ambitions in the Web3 space, American sports betting giant DraftKings has decided to pull the plug on its non-fungible token (NFT) marketplace. The company will also cease operations of Reignmakers – its fantasy sports game where users could collect valuable NFTs to win real money.

The decision comes as DraftKings faces a lawsuit alleging it misguided investors on the long-term value of its NFT offerings. An Illinois-based NFT investor named Justin Dufoe filed the suit in March, claiming he lost $14,000 after prices of DraftKings’ NFTs rapidly tanked.

A federal judge recently denied DraftKings’ dismissal request, allowing the case to proceed. This seems to have prompted the operator giant to cut its losses and bid adieu to its NFT experiments.

Let’s rewind a bit here. DraftKings launched its NFT marketplace in 2021 when the hype around these digital collectibles peaked. It struck a deal with Autograph to boost its NFT credibility and even started Reignmakers – a fantasy game where you could collect NFTs and win sweet cash.

But the NFT prices started crashing soon after. Dufoe alleges DraftKings illegally sold these as unregistered securities without giving buyers the full picture. Now he wants the fantasy sports bigwig to pay.

While shutting down its NFT ops was surely a tough call, DraftKings seemingly felt it was best to avoid further legal scrutiny. Can’t blame them – lawsuits are bad for business.

As a peace offering, DraftKings has promised Reignmakers users cash compensation based on their NFT collections. But for NFT enthusiasts out there, this marks the end of DraftKings’ ambitious Web3 dreams – at least for now.