Sportradar Shares Slump as Reports Allege It Profits from Illegal Operators

Sportradar, a leading sports technology company, has experienced a dip in its share price due to its alleged provision of products to unlicensed operators. This followed reports suggesting that a significant portion of Sportradar’s revenue comes from unlicensed markets – claims that Sportradar rejected.

Muddy Waters and Callisto Research Allege Sportradar Supplies Illegal Companies

Financial analysts Muddy Waters and Callisto Research just published reports in which they claimed that Sportradar has been supplying unlicensed gaming companies, in violation of the rules in the regulated markets in which it operates.

To top it all off, the reports, which were published within a few hours of one another, said that a significant portion of the B2B company’s revenue came from agreements with unregulated sportsbooks, including illegal operators with suspected ties to organized crime.

These allegations immediately made headlines due to the fact that Sportradar is one of the top sports betting solution suppliers in the gaming space, and sent shockwaves across the sector. This resulted in a significant blow to the company’s share price.

As of the time of this writing, the company’s shares are valued at $13.04 apiece, representing a drop of over 23% from the pre-report period.

The Reports Say Sportradar’s Image as Integrity Leader Is False

In Muddy Waters’ report, analysts emphasized that Sportradar’s provision of content and solutions to unlicensed companies seems to contradict the supplier’s claims that it is the “FBI of gambling.” For context, Sportradar has previously emphasized its unwavering commitment to integrity, which has been reflected in its robust know-your-customer processes.

Muddy Waters slammed Sportradar’s commitment to integrity as a “lie,” citing the results of its internal investigation, Sportradar’s code, the testimonies of multiple former and current employees, and the supplier’s offshore-reliant business model.

Muddy Waters estimated that between 20% and 40% of the company’s revenue came from illegal gambling companies.

Callisto, on the other hand, said that it understood that 270 of Sportradar’s 800 clients were illegal operators. Callisto analysts therefore concluded that they believe that Sportradar’s “curated image” as a leader in integrity was misleading.

Sportradar Says Short Sellers Seek to Profit from Stock Disruption

Sportradar responded to the reports, slamming them as inaccurate and insisting that Muddy Waters and Callisto Research demonstrated a misunderstanding of its business.

In its response, Sportradar said that the reports were authored by short sellers who sought to “erode shareholder value and profit from stock disruption.”  

Sportradar reiterated its commitment to compliance and the highest integrity standards and rejected the severe allegations.

In any case, this isn’t the first time a company has come under fire due to its alleged provision of content to unlicensed companies. Similar claims triggered the ongoing lawsuit between Evolution and Playtech.