Sportradar faces securities fraud suit after 22% stock drop on gambling allegations

Sportradar Group AG lost 22.6% of its market value after reports alleged it derived as much as 40% of revenue from illegal gambling operators.

"The company has actively aided and abetted illegal gambling across the world's black and grey markets — not as an accident or an oversight, but as a business strategy," Muddy Waters Research said in its April 22 report.

The stock fell $3.80 to close at $13.04 on April 22, wiping out roughly $700 million in market capitalization. Callisto Research separately identified more than 270 gambling platforms — over a third of the 800 Sportradar claims to serve — using the company's products while operating illegally in regulated or prohibited markets. Three US gambling regulators have opened reviews into the company, according to Callisto.

Investors who purchased Sportradar Class A ordinary shares between Nov. 7, 2024, and April 21, 2026, have until July 17 to seek lead plaintiff status in the securities fraud class action filed in the US District Court for the Southern District of New York. The lawsuit alleges Sportradar misrepresented its compliance processes and Know-Your-Customer protocols while knowingly partnering with black-market operators to boost revenue.

The complaint, captioned Smale v. Sportradar Group AG, names the company and senior executives including CEO Carsten Koerl as defendants. It asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

Sportradar, which collects and distributes real-time sports data to betting operators and media companies, has partnerships with the NBA, MLB, NHL and PGA Tour. The company had touted a "four-level process" to confirm it works only with licensed operators and described ethics and integrity as "crucial" to its operations.

Muddy Waters estimated that illegal operators contributed 20% to 40% of Sportradar's total revenue. The research firm said it documented nearly 50 clients operating illegally, including seven Russian sportsbooks and four Southeast Asian sportsbooks with links to Cambodian human trafficking operations.

The allegations threaten Sportradar's partnerships with major sports leagues and its ability to operate in regulated markets. Investors will watch for any regulatory enforcement actions or league contract reviews as the July 17 lead plaintiff deadline approaches.

This article is for informational purposes only and does not constitute investment advice.