$10M DraftKings Settlement Wraps Up NFT Class Action Lawsuit

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DraftKings has agreed to pay a $10 million settlement to resolve a class action lawsuit that alleged the sports betting giant unlawfully sold non-fungible tokens (NFTs) that were, in truth, unregistered securities, and operated its DK Marketplace as an unregistered securities exchange. 

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The proposed DraftKings settlement, if preliminarily approved by the court, would cover all individuals and entities who bought, acquired, sold, disposed of, owned, held, used or otherwise transacted in NFTs, including Marketplace NFTs, in a DraftKings account at any time from August 11, 2021 through the date judgment is entered in the case. 

The official DraftKings settlement website can be found at DraftKingsNFTSettlement.com. To receive a DraftKings settlement payout, you must file a timely, valid claim form online or by mail with adequate supporting documentation.

ClassAction.org will update this page if and when the DraftKings NFT settlement receives preliminary approval from the court, and when the official settlement website goes live. 

According to court documents, DraftKings settlement payouts will be allocated based on the claims administrator’s calculation of each class member’s losses during the class period, i.e., the timeframe mentioned above. The allocation plan is yet to be approved by the court, and at this time, settlement documents state, it is impossible to determine the exact amount any class member might receive from the deal. 

A class member’s individual recognized loss shall be tallied by adding the amount they paid for all purchases of NFTs from DraftKings in the primary market or NFT “drops,” and the amount they paid for all purchases of NFTs in the secondary market or the “Marketplace.” 

Related Reading: DraftKings Class Action Lawsuit Says Promises of Risk-Free Betting, Cash Bonus Promotions Are Bogus 

The class action settlement administrator will then subtract any amounts received by the claimant for sales of NFTs on the secondary market, amounts received from DraftKings in connection with its Marketplace shutdown offer, and any amounts the class member received from DraftKings in prize contests. 

From this amount, the claims admin will calculate the class member’s pro-rated share of the settlement by dividing their individual recognized loss by the recognized losses of all class members combined and multiplying the resulting percentage by the balance remaining in the class action settlement fund after the payment of notice and administration costs, taxes, fee and expense awards, service awards, and any other expenses approved by the court. 

To receive DraftKings settlement benefits, a claimant must be entitled to a distribution payment of at least $5, court documents state. 

Should any funds remain in the DraftKings class action settlement fund after the initial round of distributions to eligible class members, the remaining balance of the fund shall be used within six months to pay “any amounts mistakenly omitted from the initial distribution,” and then to pay any additional notice and administration costs incurred for the deal. After this, a second distribution of at least $5 each would be sent out to authorized claimants, settlement documents state. 

Plaintiffs’ attorneys told the court that the proposed $10 million settlement amounts to an “excellent recovery under the circumstances.” The dollar amount marks 26% of the midpoint of potentially recoverable damages, which are estimated to range from $18 million to $58 million, court documents state. 

According to the initial DraftKings class action lawsuit, the platform pocketed all revenue from its initial NFT offerings, while also pulling in a commission of at least five percent on secondary market transactions that occurred in the DK Marketplace. DraftKings NFT investors could also use “gamified NFTs” to earn cash prizes as part of a promotional effort to generate more investor interest in DraftKings NFTs, court documents state.

The plaintiff submitted an unopposed motion for preliminary class action settlement approval to the court on February 26, 2025. DraftKings shut down its NFT marketplace in July 2024 amid then-unspecified “legal developments,” rendering NFTs bought through the program effectively worthless. 

Did you know that some class action settlements require no proof to submit a claim? Check out the latest current class action settlements.