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DraftKings Shut Down NFT Fantasy Game & Marketplace Reignmakers
DraftKings have shut down Reignmakers, their popular NFT game and marketplace. Why, and why now?
Pet Berisha
August 05, 2024
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DraftKings Shut Down NFT Fantasy Game & Marketplace Reignmakers
Sporting Crypto Newsletter is supported by The HBAR Foundation.
Discussed in this edition of Sporting Crypto:
DraftKings Shutter Reignmakers š²
a) Overview
b) Legal ChallengesReignmakers Explored š®
a) Overview
b) StatisticsAnalysis & Concluding Thoughts š§
a) Lack of Legal Battle
b) DraftKings Context
c) What does it Mean for the Industry?
DraftKings Shutter Reignmakers š²
DraftKings, the North American gambling giant, have abruptly shut down their NFT fantasy game Reignmakers.
Announced on the 1st of August 2024, in a community update DraftKings wrote:
After careful consideration, DraftKings has decided to discontinue Reignmakers and our NFT Marketplace, effective immediately, due to recent legal developments. This decision was not made lightly, and we believe it is the right course of action.
Due to this update, we have decided to offer all holders of Reignmakers digital game pieces the opportunity to relinquish those game pieces to DraftKings in exchange for a cash payment (subject to certain conditions). The payment amount will be based on factors that include, but are not limited to, the relative size and quality of your digital game piece collection. For more information and to help answer your questions during this transition, please view below.
At DraftKings, our mission is to serve our customers with excellence. We are committed to meeting the needs of todayās sports fans by providing exciting and engaging gameplay experiences. In line with our innovative spirit, we ventured into the NFT-based sports world with Reignmakers and accomplished so much in such a short period of time. We are incredibly grateful for the passionate community that has supported us over the past two seasons.
While Reignmakers and our NFT Marketplace will be discontinued effective immediately, our customers are currently able to access their Reignmakers digital game pieces and other NFTs via the My Portfolio page.
We extend our heartfelt thanks to all of you who made Reignmakers special. Your enthusiasm and support have meant everything to us.
DraftKings have also allowed users to withdraw their NFTs to self-custodial wallets, should they choose to do so.
Thus far, the reaction to the cash amounts offered to customers has been mixed.
To quickly summarise:
DraftKings Reignmakers are discontinuing their NFT fantasy game and marketplace Reignmakers
They state that it is due to ārecent legal developmentsā
They will offer payouts to users on their collections
Users can also withdraw their NFT collectibles to their wallets should they choose to do so
Letās dig into the legal developments that DraftKings cite as the reason for shuttering Reignmakers.
In March 2023, Justin Dufoe, a buyer of Reignmakers NFTs, filed suit against DraftKings on behalf of other owners alleging that these NFTs are securities. The claimantās losses were $14,000 as per their suit.
In July 2024, a U.S. judge in Massachusetts denied a motion to dismiss the class action lawsuit against DraftKings, setting the stage for a future trial. And seemingly, the judge denying a motion to dismiss has created a domino effect that has led to Reignmakers shutting down.
Reignmakers Explored š®
DraftKings Reignmakers allowed players to build a collection of NFT player cards through pack drops, auctions, and a secondary marketplace, that were used in fantasy lineups.
The player cards were on the Polygon blockchain, and players could collect athletes across their three verticals, RM Football, PGA Tour and UFC respectively.
Each player card NFT represents an athlete and scored points based on the playerās statistical performance in a given event or game. They were also accompanied by a card rarity ranging from five tiers: core, rare, elite, legendary and Reignmaker.
The rarity determined the scarcity of the card and which contests you could enter with that card. For example, 4 rare cards are required to enter a rare-tier contest. The contests themselves reward players with cash and player card prizes.
[Psst. we cover Reignmakers in greater depth with an interview with Matt Kalish, CEO of DraftKings here]
This time last year, between July and September 2023, Reignmakers was the third-largest digital collectible project across all blockchains. In that timeframe, it outperformed the total digital collectibles volume of every other blockchain, not inclusive of Ethereum and Polygon. This growth and dominance was seen in a period where the macro NFT market was at historic lows, some 95% down from April 2022 peaks. This makes these numbers either a) more impressive or b) shows that Reignmakers didnāt attract crypto native users.
Throughout 2024, the Reignmaker numbers were steady.
The Reignmakers product has seen 9000-13,000 monthly unique buyers in 2024, with monthly total transactions ranging from ~250,000 to 320,000. The total sales in USD terms ranged from ~$2.6m to $7.5m, with historic fluctuations usually due to sports seasons beginning and ending.
So why exactly has a seemingly successful digital collectible game been shut down so abruptly?