The DraftKings NFT settlement is a $10 million class action resolution in Dufoe v. DraftKings, Inc., approved on July 30, 2025 by Judge Denise J. Casper of the U.S. District Court for the District of Massachusetts. It resolves claims that NFTs sold on the DraftKings Marketplace were unregistered securities. The claim deadline has passed, and as of mid-2026, payments have not yet gone out.
Who Is Covered
The settlement class includes anyone who purchased, acquired, sold, held, or otherwise transacted in NFTs through a DraftKings account between August 11, 2021 and the date of the judgment. That window covers the full life of the DraftKings NFT Marketplace, which launched in August 2021 and shut down on July 30, 2024 alongside the Reignmakers fantasy game.
How Individual Payouts Are Calculated
Payments are based on each claimant’s “recognized loss.” You start with the total paid for NFT purchases, on both the primary market (drops) and the secondary market. From that figure, three things are subtracted:
- Proceeds from any secondary market resales.
- Payments received from DraftKings during the marketplace shutdown buyout.
- Any prize contest winnings from Reignmakers.
Each claimant’s share of the net settlement fund is then pro-rata: your recognized loss divided by the total recognized losses of all valid claims, multiplied by the fund balance left after fees and expenses. A claimant must be entitled to at least $5 to receive any payment. If money remains after the first distribution, a second round of payments may follow.
The $10 million fund is reduced before distribution by taxes, notice and administration costs (capped at $300,000), court-awarded attorneys’ fees, litigation expenses, and the lead plaintiff’s service award. Kirby McInerney LLP served as lead counsel and Berman Tabacco as local counsel. The court awarded $3.33 million in attorneys’ fees, one-third of the fund, plus roughly $53,000 in litigation expenses. Lead plaintiff Justin Dufoe received a $50,000 service award.
When Will Payments Go Out
Claim status letters were mailed on October 7, 2025, with a response deadline of October 28, 2025. Actual payments have not been distributed. The settlement website states that the net fund will not be paid out until the settlement and plan of allocation are fully approved and any appeal period has expired. No payment date has been announced. Because distribution is pro-rata and the total number of valid claims is not yet public, individual amounts cannot be calculated in advance.
Key Deadlines
- Claim deadline: July 21, 2025 (passed).
- Exclusion and objection deadline: July 9, 2025 (passed).
- Final approval hearing and final approval: July 30, 2025.
- Claim status letter response deadline: October 28, 2025 (passed).
If you missed the July 21, 2025 claim deadline, you are not eligible for a payment from this settlement.
What the Lawsuit Alleged
Justin Dufoe filed suit on March 9, 2023, alleging that DraftKings had sold unregistered securities and operated an unregistered securities exchange. He reported personal losses over $14,000 on $72,263 in total NFT purchases. The complaint named DraftKings and three officers: CEO Jason D. Robins, CFO Jason K. Park, and President of North America Matthew Kalish.
The central question was whether DraftKings NFTs qualified as “investment contracts” under the Supreme Court’s Howey test. Dufoe argued that buyers paid real money, that DraftKings pooled sales revenue back into promoting the marketplace, that the company’s marketing highlighted “risers and fallers” and that executives discussed profit potential publicly, and that NFT values depended on DraftKings continuing to run the platform. Owners were required to trade through the DraftKings Marketplace, and the company allegedly retained sole control over whether users could move NFTs to personal wallets.
DraftKings moved to dismiss in September 2023, arguing that its NFTs were not securities because buyers did not share in company profits or business risks. On July 2, 2024, Judge Casper denied the motion, ruling that Dufoe had plausibly alleged that DraftKings NFTs were securities under Howey. The court was explicit that the ruling was narrow and limited to the pleading stage. DraftKings shut down the NFT Marketplace and Reignmakers on July 30, 2024, citing “legal developments,” and offered buyouts to Reignmakers players. DraftKings agreed to the $10 million settlement on February 26, 2025.
Objections That Were Overruled
At least three class members objected before the deadline. The most detailed objection came from Brad Wyatt, a Massachusetts resident and former top-ten holder of NFL Reignmaker NFTs, who filed on July 14, 2025. Wyatt challenged the subtraction of “Prize Receipts” from the recognized loss formula, arguing that fantasy contest winnings were earnings from gameplay rather than returns on NFT investments, and that counting them shrank payouts for active players. He cited his own numbers: roughly $462,000 in acquisition costs, $245,000 in resale and shutdown proceeds, and $252,000 in prize value attributed by DraftKings. Judge Casper granted final approval despite the objections. The court’s detailed reasoning has not been publicly reported.
What This Settlement Does Not Decide
Because the case settled, no court has ruled on the merits of whether DraftKings NFTs, or NFTs generally, are securities. Judge Casper’s July 2024 ruling accepted the plaintiff’s allegations as true only for purposes of the motion to dismiss and identified several fact questions that could shift the analysis at trial, including whether funds were actually pooled, whether NFT prices moved independently, whether users could trade off-platform, and whether buyers were motivated by gameplay rather than investment. If you are looking to this settlement for a legal answer on NFTs and securities law, there is not one here.