DraftKings faces a trial following a Massachusetts federal judge's decision to reject their motion to dismiss a class action lawsuit alleging the sale of unregistered securities through their NFT marketplace.

Filed in March 2023, the lawsuit contends that DraftKings' NFTs qualify as investment contracts under federal law.

The judge, Denise Casper, ruled that the plaintiffs' claims under the Howey test were plausible, citing allegations of investment of money in a common enterprise with profit expectations primarily from DraftKings' efforts.

Despite DraftKings' arguments, including the launch of a gaming component, the court found sufficient grounds for the case to proceed, potentially setting a significant precedent for NFT regulation under securities law.