DraftKings Reignmakers, a daily fantasy football game using NFT player cards, just learned it must shut down in Pennsylvania.
That is the message that DraftKings Reignmakers relayed to players in a Discord channel before Colts vs. Broncos on Thursday Night Football. The game had been operating since the summer.
Regular daily fantasy sports contests by approved operators remain fully legal in PA, so why is Reignmakers getting the axe? Most likely, it has to do with the aspects of the contests that make them so unique.
What is DraftKings Reignmakers
DraftKings first announced its foray into the digital collectibles and NFT ecosystem with details about DraftKings Marketplace in July 2021. DraftKings Reignmakers is an offshoot of Marketplace and allows players to use a daily fantasy football lineup made up of a collection of NFT player cards.
Players can start acquiring cards through free starter packs, joining pack drops, bidding on cards at auction, winning them via Reignmakers contests or purchasing cards on DraftKings’ secondary marketplace.
The difference between these and regular DraftKings fantasy contests is that Reignmakers does not have a salary cap.
Beyond that, the point system and rules are similar to standard daily fantasy contests once a roster has been assembled. There are no entry fees provided players have enough cards to field a team.
Reignmaker cards have a series of properties that determines the value of cards and impacts the contests players can enter. There are five tiers for cards: Core, Rare, Elite, Legendary, and Reignmaker.
Lengendary and Reignmaker cards are the most scarce and give players access to more exclusive contests.
DFS contests remain fully legal in Pennsylvania
Daily fantasy sports became explicitly legal and regulated in Pennsylvania with the passage of a gambling expansion law in 2017. There are currently nine DFS operators in PA, though most of them bring in minimal revenue.
DraftKings (and FanDuel) make up the majority of DFS action in the state.
In FY 2021/22, DraftKings’ DFS app brought in $15.0 million in adjusted gross revenue (AGR), compared to FanDuel’s reported $11.6 million in AGR.
Why did DraftKings Reignmakers contests get banned in PA?
In the Discord message, DraftKings explained that it had consulted with the PGCB before having to shut Reignmakers down in PA “until further notice.”
However, the company can still offer regular fantasy contests. This implies that the Reignmakers/NFT variation of DFS contests is different enough as to require separate approval by the PGCB.
In their “Final Rulemaking” regulations for DFS, the PGCB defines fantasy contests as:
An online fantasy or simulated game or contest with an entry fee and a prize or award in which all of the following apply:
(A) The value of all prizes or awards offered to winning participants is established and made known to participants in advance of the contest and the value is not determined by the number of participants or the amount of any fees paid by those participants.
(B) All winning outcomes reflect the relative knowledge and skill of participants and are determined by accumulated statistical results of the performance of individuals, including athletes in the case of sports events.
(C) The winning outcome is not based on the score, point spread or performance of a single actual team or combination of teams, or solely on a single performance of an individual athlete or player in a single actual event. [Emphasis added by PlayPennsylvania.]
From this description, one could see a potential conflict with Reignmakers contests because of the requirement of an “entry fee.”
No entry fee, no dice in PA?
In DraftKings’ own explanation of Reignmakers contests:
Question: Is there an entry fee for Reignmakers fantasy football contests?
Answer: No. Initially, all contests will be free to join provided you own enough eligible cards to complete a lineup. Each contest has entry rules tied to the rarity level and other properties of the Reignmakers cards you own.
The NFT variation may also not fit the traditional/approved contest definition because of the requirement that “winning outcomes reflect the relative knowledge and skill of participants.” Reignmakers contests in some part depend on what NFT player cards a person owns.
While the innovative type of fantasy contest that DraftKings offers is likely popular among sports fans who are also into digital collectibles, the game will be off the board in Pennsylvania for now.
Per PA gaming law, any new kind of gambling contest or game would need to go through the approval process with the PGCB before going live to the public. That process can take some time, but it’s possible Reignmakers could eventually return to PA.
Valerie Cross contributed to this article.