Posted on: July 21, 2021, 09:26h.
Last updated on: July 21, 2021, 01:49h.
DraftKings (NASDAQ:DKNG) is getting into the non-fungible token (NFT) space, announcing plans for DraftKings Marketplace.
The Boston-based gaming company said DraftKings Marketplace will provide mainstream access to NFTs.
The NFT is an emerging digital asset class that’s generating considerable buzz, and one that many interested investors don’t know how to participate in. The platform will also feature “curated NFT drops and supports secondary-market transactions.” The operator said more details on the marketplace will be released in August.
In an effort to make a splash, DraftKings Marketplace is partnering with Autograph, an NFT collecting platform co-founded by Tampa Bay Buccaneers quarterback and seven-time Super Bowl champion Tom Brady. Separate from the accord with DraftKings, Autograph revealed a content arrangement with movie studio Lionsgate, as well as NFT deals with Tiger Woods, Wayne Gretzky, Derek Jeter, Naomi Osaka, and Tony Hawk.
Autograph’s partnership with Lionsgate could lead to the creation of NFTs based on popular film franchises, including The Hunger Games, The Expendables, John Wick, The Twilight Saga, and more. DraftKings Marketplace will serve as the exclusive distributor of Autograph’s NFT content. Financial terms of that arrangement weren’t revealed.
DraftKings Joining NFT Boom
A non-fungible token (NFT) is a unit of data stored on the blockchain. NFTs can be applied to a variety of digitized items, such as audio and video files, as well as pictures.
In some cases, NFTs are viewed as digital forms of rare art, with some commanding lofty price tags. For example, one produced by the artist known as Beeple sold for more than $69.3 million at a Christie’s auction. Last month, DraftKings board member Shalom Meckenzie spent $11.8 million on the NFT known as “CryptoPunk #7523” at a Sotheby’s auction.
Several other CryptoPunks have sold for well over $1 million, and other Beeple works have commanded multi-million price tags. Sotheby’s sold a piece of digitized art by the artist “Pak” in April for $16.8 million.
Unlike traditional artworks, NFTs cannot be held or displayed in homes or museums. Still, some art experts view the nascent asset class disruptive.
“You look at what’s happening in NFTs, and you can kind of see the galleries disappearing before you see the NFTs disappearing,” said renowned British contemporary artist Damien Hirst in an interview with CNBC today.
‘Call Option’ for DraftKings
Investors like the idea of DraftKings entering the NFT arena, as highlighted by a gain of more than five percent today for the stock.
Needham analyst Bernie McTernan says DraftKings Marketplace is “an interesting call option” for DraftKings, particularly if the $10 billion sports memorabilia moves online. He says DraftKings Marketplace could generate one percent to three percent in revenue on each item it sells, meaning $10 million to $30 million on $1 billion in sales.
Craig-Hallum analyst Ryan Sigdahl said NFTs is a logical expansion for DraftKings. He added it jibes with the company’s efforts to become a digital sports and entertainment monolith, not just a betting company.