Sportradar shares lose almost a quarter of their value following the publication of illegal markets report on Wednesday
Shares in Sportradar lost more than 20 per cent of their value on Wednesday after the company became the latest gaming supplier to fall victim to a short seller report alleging illegal activities.
Sportradar’s shares closed 22.57 per cent lower in New York following publication of the report by American investment firm Muddy Waters Research, which is known for activist short selling.
Muddy Waters alleges that Sportradar is aiding and abetting illegal online sportsbooks by providing its solutions to operators targeting illegal markets such as China, Vietnam and Thailand.
Muddy Waters said in a statement: “Our research finds that SRAD 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. We estimate that illegal operators today deliver approximately 20–40 per cent of total revenues.”
The investment firm claims to have identified nearly 50 companies as current or recent Sportradar clients and collaborators who are operating in illegal markets, basing its findings on proprietary code-analysis methodologies and interviews with former Sportradar sales executives.
“These include organized crime-linked 1xBet and FonBet in Russia, Cambodian modern-slavery-linked 8xBet, OKVIP, and SBOBet in Southeast Asia, and the infamous Yabo Group in China,” the statement adds. “SRAD previously denied supplying 8xBet. We found its Client ID in 8xBet’s source code.”
Sportradar has denied the allegations, noting several factual inaccuracies in the report and vowing to “unequivocally challenge these assertions”.
“These reports demonstrate a fundamental misunderstanding of our business and the industry and were authored by short sellers trying to erode shareholder value and profit from stock disruption,” said Sportradar.
“Sportradar works exclusively with licensed operators, follows strict global compliance, and due diligence standards, and we stand by our independently audited financial statements, risk disclosures, and information provided to investors and regulators. We conduct our business with the highest ethical standards consistent with Sportradar’s policies and applicable laws and regulations.”
Shares in Sportradar AG (NASDAQ:SRAD) closed 22.57 per cent lower at $13.04 per share in New York Wednesday following the report.