Shares of Sportradar Group fell on April 22, after Muddy Waters Research published a report alleging that the company provided data and betting technology to illegal online gambling operators in prohibited markets and downplayed the extent of that exposure through its compliance and KYC representations. The report further estimates that such operators may account for 20% to 40% of Sportradar’s revenue.
The Complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts, about Sportradar's business and operations. Specifically, Defendants misrepresented and/or failed to disclose that: (1) Sportradar intentionally worked with black-market gambling operators to increase its revenues, despite its assurances of strict legal and regulatory compliance and claims that ethics and integrity were crucial for Sportradar's operations; (2) Sportradar's KYC and compliance processes were not as robust as Defendants had claimed; and (3) as a result, Defendants' statements about Sportradar's business, operations, and prospects lacked a reasonable basis.
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