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DraftKings (DKNG) part of surge in sportsbetting NFTs

By Monte Stewart


Updated

DraftKings screen on cell phone
DraftKings has launched a series of sportsbetting-related NFTs. - Photo: Shutterstock

This week, US-based DraftKings (DKNG) launched its Primetime NFT Series through the release of the 2022 College Hoops Collection tied to the National Collegiate Athletic Association (NCAA) men’s basketball tournament, known as March Madness.

The company plans to launch similar NFT collections in other sports as part of the PrimeTime Series.

DraftKings filed a trademark application with the USPTO in January, but it is not clear whether that application was related to the College Hoops Collection or a different group of collectibles.

The Tuesday launch is part of a trend towards sports betting-related non-fungible token development.

Other companies involved

Other companies from various countries – including the US, Canada and Ireland – have filed sportsbetting-related NFT trademark applications with the US Patent and Trademark Office (USPTO) in recent months, pointing to future business activity.

The companies include Fanatics, and American Sports Exchange, an Irish company operated by Paddy Power, a descendent of an Ireland-based bookmaking company of the same name. Paddy Power is owned by Flutter, which also owns FanDuel.

US trademark lawyer Josh Gerben and other cryptocurrency experts told Capital.com that the links between sportsbetting companies and NFTs are part of a broader expansion of NFT use in commercial ventures.

“There’s been a lot of trademark activity around the idea of NFTs, and a lot of people have questions about what can be protected as a trademark,” said Gerben, founding partner of Gerben Intellectual Property in Washington, DC.

Many companies have acknowledged that they are going to get into NFTs and are now studying the best way to do so, he added.

“I think the biggest headwind they have right now is that there's a certain level of consumer who understands NFTs and understands how to use them and acquire them and even having the (digital) wallet to hold them and things of that nature,” he said.

“But there's also a large portion of folks out there who don't. So companies have to thread the needle between being on the cutting edge and engaging consumers that haven't quite come around, and got their head around, what these things are and how they work.”

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Eight editions to drop

During month-long March Madness, DraftKings will release, or drop, eight editions of the collection. Following the championship game, holders of all eight editions will receive a ninth NFT as a reward for collecting the full set and gain priority access to the next PrimeTime Series drop.

The first edition of College Hoops NFTs – 6,484 units priced at $10 apiece and entitled "Going Dancin" – went on sale on Wednesday. Prices through all editions will range from $10 to $200 per NFT.

One-of-one, or unique, editions of all eight collectibles, will be auctioned off concurrently on the DraftKings auction platform.

With each College Hoops drop, NFT collectors will be eligible to receive DK Dollars, which the company describes as site credits that can be used to play games across all parts of DraftKings’ digital sports entertainment and gaming ecosystem, such as sportsbook and daily fantasy.

Eligible NFT holders can use DK dollars to place bets and enter pools, brackets, or fantasy games.

Major sporting events offer DraftKings key moments in which the company engages fans, and NFTs represent a new opportunity to gamify the spectator experience, Parker Winslow, a spokesperson for DraftKings, told Fortune.

Several league partners

DraftKings has partnerships with the National Hockey League (NHL) and Major League Baseball (MLB), which is an investor in the company that could lend themselves to sports betting-related NFT projects with those organisations.

DraftKings also has numerous agreements in place with other sports leagues and individual franchises across the NBA, NFL, NHL, major European soccer circuits and, uniquely, a content-streaming deal with EuroLeague basketball.

And, DraftKings has aligned with TV networks, such as ESPN and Turner Sports, which are increasing their involvement with sportsbetting endeavours as governments worldwide permit more betting on sports.

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“I think we're going to see this kind of model where firms use blockchain items to give to customers in some form or another a lot going forward,” Andreas Park, a University of Toronto finance professor, told Capital.com.

Park said he foresees every company in the world that does anything in any digital field getting more involved with NFTs.

“Sportsbetting, for sure, would be one,” he said.

Enough critical mass

Gerben said DraftKings is making the move now because cryptocurrency has gained enough of a critical mass with consumers.

“I don’t think 12 months ago there was probably people understanding how these things work and could actually participate in a promotion on NFTs,” he said.

DraftKings and other companies do not want to be “too late to the party,” he added.

Gerben predicted that, in addition to serving promotional purposes, NFTs will be used as part of the sports betting process.

“Your betting slip could be an NFT in the future,” he said. “Because it’s on the blockchain, it’s a lot easier to verify. It’s going to make those transactions much smoother and probably drive a large secondary market.”

Bettors could also track the bets of sports betting experts that they follow to see whether they are having success because their bets would be public and viewable on the blockchain, he added. Accordingly, bettors’s bets would also be protected in the event of illicit activity.

Betano offers soccer collection

The DraftKings PrimeTime launch comes after Betano, one of the world’s leading sportsbook operators and a fast-growing tech company, unveiled an NFT collection in collaboration with Brazilian soccer team Atlético Mineiro in December 2021.

Purchasers of the series will acquire digital media featuring players and access to athletes and team facilities, depending on which of three tiers are reached.

The first tier of Atlético Mineiro NFTs will make 50 available at $200, apiece, while the second tier will contain just four tiers priced at $5,000 each. The final tier will contain just one unpriced NFT, which will be a reward for completing unspecified Betano challenges.

Atlético views NFTs as passes that unlock fan experiences in the physical world, Felipe Ribbe, Atlético’s head of innovation, told Gamblingnews.com.

Beyond betting

Gene Hoffman, president of blockchain company Chia Network, told Capital.com that anything sports-related will be involved in NFTs in the future.

“It’s beyond betting,” he said of the demand.

Hoffman expects most NFTs to be used to promote sports betting rather than as part of the wagering process.

“I am quite confident the number of bets placed in US dollars will be significantly higher than the number of bets placed using NFTs,” he said.

DraftKings indicated that it might comment for this story but did not reply to emailed questions this week.

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