Kraft, who is Jewish, confirmed on Monday that he had made the decision to bar Macklemore from the Gillette Stadium because his venue would not “provide a platform for hate speech”.
The tycoon accused the Grammy-winning rapper of having “a broader history of antisemitic rhetoric”, which Macklemore denies.
He also said the pro-Palestinian artist was “only sharing selective information and ignoring the actions of Hamas”.
All the other support acts from Sheeran’s US tour have since quit in solidarity with Macklemore.
They are Finneas, the brother of pop star Billie Eilish, Irish singer-songwriter Aaron Rowe and Danish band Lukas Graham, as well as Irish folk band Beoga, who perform with Sheeran on stage every night.
The artists argued that Macklemore’s removal represented a chilling effect on free speech.
Macklemore said on Wednesday he would donate the entire $1m of his net earnings from Sheeran’s Loop Tour to six Palestinian organisations “to bring the conversation back to where it belongs: to the Palestinian people”.
“This is a manmade injustice, and I believe it requires immediate political change,” he wrote on social media.