The Class Period begins on November 7, 2024, when Sportradar filed its third quarter 2024 financial results. The Company noted in its related press release that it may be subject to certain risks and outlined various “risk factors” as examples, but the Company also referred investors to the “other risk factors set forth in the section titled ‘Risk Factors’ in [the Company’s] Annual Report on Form 20-F for the fiscal year ended December 31, 2023” (the “2023 Annual Report”). In the 2023 Annual Report, Sportradar noted that it was “subject to a variety of U.S. and foreign laws on sports betting” and acknowledged that “[n]on-compliance with any such legislation or regulations could expose [it] to claims, legal or regulatory proceedings, license reviews, litigation and investigations by regulatory authorities, as well as substantial fines and negative publicity, each of which may materially and adversely affect [its] business” despite its purported “good faith efforts to comply with all local requirements.” These and other risk factors were repeated or referenced in substantially similar form in the Company’s various annual and quarterly filings issued during the Class Period, which were signed by Defendants Carsten Koerl, the Company’s Founder and Chief Executive Officer, and Craig Felenstein, the Company’s Chief Financial Officer.
During the Class Period, the Company touted the robustness of its due diligence, Know-Your-Customer (“KYC”) process, and overall legal and regulatory compliance. For example, on April 1, 2025, Defendant Koerl appeared on CNBC’s “MAD MONEY” with host Jim Cramer and likened the Company to “the SEC or the FBI” for the gambling industry due to its ability to police fraudulent and illicit activity.
A few months later, on November 5, 2025, the Company hosted its third quarter 2025 earnings call. During the call, a Citizens Bank analyst stated that he “want[ed] to address some of the noise around the business with your exposure to certain markets, whether they’re gray or beyond that” (i.e. black markets). In response, Defendant Koerl assured investors that the Company had a “four-level process” to confirm that it “only work[s] with licensed operators,” including by “hav[ing] contracts which are enabling those operators to only work in the territory where they are licensed in.” Moreover, Koerl highlighted that Sportradar had “a global compliance team, which is making an intensive KYC with every operator, and [it is] insisting on this, that [Sportradar] control[s] it.”
Notwithstanding Sportradar’s purported commitment to integrity and legal and regulatory compliance, investors learned the truth about the Company’s intentional non-compliance with applicable laws and regulations on April 22, 2026, when two market research firms—Muddy Waters Research (“Muddy Waters”) and Callisto Research (“Callisto”)—separately published investigative reports revealing that Sportradar intentionally utilized a network of black-market gambling partners to drive a material portion of its revenues.
Muddy Waters claimed that Sportradar “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.” To support this conclusion, Muddy Waters detailed discussions between its investigators and Sportradar sales executives at the International Casinos Exhibition (a large, worldwide gaming convention) where its investigators posed as sportsbook operators indicating interest in penetrating illegal markets, including Vietnam, Thailand, Indonesia, and China. According to Muddy Waters, a Sportradar sales executive “bragged that [Sportradar] ‘serves everyone’ and listed major [business-to-business] clients in Asia, known illegal operators,” and then “walk[ed] [the investigators] through key product offerings for each of these illegal markets.” The Sportradar sales executive “also offer[ed] to solicit assistance from his clients . . . so [Muddy Waters’s investigators] could quickly set up operations.” One of the “clients” specifically identified by the Sportradar sales executive was “the infamous Yabo Group,” a “notorious” illegal betting operator in China that was also known for “using Cambodian customer service centers engaged in human trafficking, modern slavery, kidnapping and torture of its workforce.” In addition to Sportradar’s admitted connection to the Yabo Group, Muddy Waters uncovered numerous other connections between Sportradar and illegal operators in Russia, Turkey, and several Asian markets.
As a result of its investigation, Muddy Waters concluded that Sportradar “intentionally combines a ‘check-the-box’ KYC review with a ‘see nothing, know nothing’ approach to illegal markets” that “contrasts sharply with its CEO’s recent claims of maintaining a robust KYC process.”
Separately, Callisto “examin[ed] . . . hundreds of gambling platforms,” through which it “found evidence suggesting that over 270 individual platforms (more than a third of the 800 Sportradar claims to serve) are using Sportradar’s products or services, or explicitly claiming to do so, while operating illegally in regulated or prohibited gambling markets.” Former Sportradar employees also told Callisto that one of the Company’s largest clients, 1xBet, was “likely to be the world’s largest illegal gambling operator by revenue.”
Callisto reportedly “shared [its] findings with multiple regulators in North America and Europe,” three of which “have already commenced reviews” of the Company. As a result, Callisto reasoned that “Sportradar will have to choose between surrendering its revenue from illegal operators or losing its licenses in Europe and North America.” On this news, the price of Sportradar Class A ordinary shares plummeted $3.80 per share, or approximately 22.6%, from a close of $16.84 per share on April 21, 2026, to close at $13.04 per share on April 22, 2026.
This 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 the Company’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) the Company’s KYC and compliance processes were not as robust as Defendants’ had claimed; and (3) as a result, Defendants’ statements about the Company’s business, operations, and prospects lacked a reasonable basis.
