DraftKings shuts down NFT business

Move comes after class action lawsuit involving NFTs was allowed to proceed

In the summer of 2021, DraftKings opened up an NFT Marketplace, beginning a partnership with Tom Brady's autograph company to sell Brady and Wayne Gretzky NFTs.

On Tuesday, the company, which also used NFTs for its Reignmakers game, announced it would no longer be in the NFT business. The move comes after a federal judge earlier this month allowed a class action lawsuit, in which customers questioned whether the sports gambling company marketed NFTs as securities, to proceed.

On July 2, Massachusetts judge Denise Casper ruled that attorneys for Justin Dufoe had adequately asserted DraftKings NFT contracts could have been securities.

"It has always been in DraftKings DNA to innovate and disrupt in order to provide the best possible gameplay experiences for our customers," the company said in a statement. "Reignmakers and our NFT Marketplace saw immediate success upon launch and we are proud of what we accomplished in such a short time."

Last month, Dapper Labs, owners of NBA Top Shot, paid $4 million to settle a class action lawsuit on the same matter.

DraftKings said those who bought NFTs from the company would receive a cash payment over the next week. It is not known how much is in the disbursement fund.

Darren Rovell is the founder of cllct.com and one of the country's leading reporters on the collectibles market. He previously worked for ESPN, CNBC and The Action Network.