- Casino
- By State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Georgia
- Florida
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Massachusetts
- Maryland
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
- By State
- Slots
- Poker
- Sports
- Esports
- Home
- Blockchain
- DraftKings Faces Legal Woes as the NFT Market Tanks
DraftKings Faces Legal Woes as the NFT Market Tanks
The US gaming operator is currently engaged in a potential lawsuit with a disgruntled customer over NFT losses

DraftKings’ substantial investments into the NFT space have drawn their share of controversy as prices plummet and user interest wanes. The operator also faces a class action lawsuit for allegedly marketing its NFTs as securities without proper registration. DraftKings continues to press on with NFT-based promotions and partnerships and will likely continue to do so as long as its marketplace remains active.
The Plaintiff Mistakenly Believed Profits Were Guaranteed
The leading US operator entered the NFT space in 2021, hoping to capitalize on the latest trend and bolster player engagement. DraftKings has since steadily developed its ecosystem, partnering with various leagues and expanding its offerings. However, the sharp drop in interest and plummeting NFT prices have dampened the operator’s ambitions in the sector and even led to potential legal issues.
A new class action lawsuit alleges that DraftKings sold its NFTs as unregistered securities, misguiding buyers about their investments’ long-term value. Illinois resident Justin Dufoe claims to have lost over $14,000 as his purchased NFTs drastically declined in value. The plaintiff allegedly expected surefire profits when trading his NFTs due to their marketing as securities.
Defendants had actual knowledge of facts indicating that the NFTs they promoted and sold were ‘securities’ under federal and state securities laws and… failed to register their NFTs as securities.
Justin Dufoe v. DraftKings, Inc.
Dufoe argued that the value of his purchases depended on DraftKings’ management efforts at the moment of the purchase and regarding their closed secondary market. The proposed lawsuit includes all investors who purchased DraftKings NFTs after 11 August 2021. Regardless of the court’s final verdict, such cases erode trust in NFTs, threatening to depreciate their value even more.
DraftKings’ NFT Marketplace Is Here to Stay
FTX’s dramatic implosion did not leave NFTs unscathed, sending their price nosediving. The waning hype regarding the technology and several high-profile scandals where hackers stole celebrity-owned NFTs did not improve the situation. Despite such negative pressures, the market appears to have reached an equilibrium, with the number of transactions steadily rising in the first months of 2023.
NFTs’ status as novelty items and a platform for speculation mean that the average user is unlikely to make any real profits. However, their accessibility helps onboard new crypto users and keep them engaged for as long as possible. The real winners are companies like DraftKings with established secondary markets, reaping the benefits of resale fees and commissions.
Related Topics:
Deyan is an experienced writer, analyst, and seeker of forbidden lore. He has approximate knowledge about many things, which he is always willing to apply when researching and preparing his articles. With a degree in Copy-editing and Proofreading, Deyan is able to ensure that his work writing for Gambling News is always up to scratch.
Must Read
Blockchain
January 30, 2025
BKEX Staff Sentenced over Illegal Crypto Contracts Gambling
Blockchain
January 8, 2025
Crypto.com Launches More NFL Prediction Markets
More Articles
Business
February 13, 2025
FanDuel Hits 23M App Downloads, DraftKings Is Close Behind
Legal
February 12, 2025
WinView Files New Patent Lawsuit Against FanDuel and DraftKings
Sports
February 5, 2025
NYX Teams Up with DraftKings in Historic Super Bowl Campaign

Legal
January 28, 2025
DraftKings Reaches Agreement with NFLPA, Pauses Lawsuit
Legal
January 24, 2025
DraftKings Faces Legal Challenge over Alleged Player Exploitation
Business
January 16, 2025
Maryland Tax Rate Increase May Impact DraftKings, FanDuel
Sports
January 10, 2025
Delta Air Lines and DraftKings Announce Collaboration at CES 2025
Legal
January 9, 2025
DraftKings Takes Heat Over “Free Bet” Promotional Language
Business
January 2, 2025
DraftKings Shares Underperform amid Insider Selling

Legal
December 27, 2024
DraftKings Settles Dispute with Ex-Executive Over Fanatics Move