DraftKings Deals with NFT Buyers’ Lawsuit

It looks like DraftKings really stepped in it with their NFT marketplace. They sold these non-fungible tokens to investors without properly registering them as securities or providing the right disclosures.

When the crypto market crashed, so did the value of those NFTs, leaving the buyers high and dry. I can’t blame them for suing DraftKings. A $10 million settlement fund seems fair to help make up for those losses.

You’d think a big gambling company would know better, but I guess they got caught up in the NFT hype like everyone else. They shut the marketplace down pretty quickly once those lawsuits started piling up. Smart move legally speaking, but too little too late for those investors.

This settlement follows another confidential one DraftKings reached over using player images without permission. Two strikes in one year – they really need to tighten up their legal review process before jumping on the next hot trend. But at least they’re compensating the harmed parties.

We’ll be interested to see if the court gives final approval to the settlement after the hearing. $10 million seems a reasonable outcome given the complex securities law issues. But the plaintiffs’ attorneys sure think it’s an “excellent recovery.”