Sportradar shares fall 23% on illegal-market allegations
Table of contents
- Muddy Waters Research and Callisto Research published short reports on 22 April alleging Sportradar has significant exposure to unregulated or illegal sportsbooks.
- Muddy Waters estimates 20–40% of Sportradar’s revenue may derive from illegal operators; Callisto puts the range at 30–40%.
- Sportradar closed 22.57% lower at $13.04 and has rejected all claims as factually inaccurate and a deliberate attempt to damage shareholder value.
Sportradar (NASDAQ: SRAD) shed approximately 22.6% of its market value on 22 April after two activist short sellers published reports alleging the sports data giant has extensive exposure to unregulated or illegal sportsbooks.
The stock closed at $13.04, down from $16.84 the previous session, erasing over $800 million in market capitalisation.
Muddy Waters Research and Callisto Research each alleged that a material portion of the company’s revenue originates from unlicensed operators, including entities they claimed are linked to organised crime.
The reports were published within hours of each other; Muddy Waters stated it arrived at its conclusions independently, though both firms broadly agreed on the scale of the alleged exposure.
Illegal revenue claims
Callisto examined hundreds of gambling platforms and alleged that more than 270 of what it characterises as roughly 800 platforms served by Sportradar are operating illegally in regulated or prohibited markets, with many holding no licence whatsoever.
The firm said it spoke to multiple former Sportradar employees who acknowledged the company’s exposure to grey or black markets, and estimated that unregulated operators could account for 30–40% of total revenue.
If Callisto’s upper estimate were accurate, this would imply up to around €516 million in revenue from illegal-market operators, based on Sportradar’s reported 2025 revenue of €1.29 billion.
Muddy Waters conducted what it described as an undercover investigation, analysed Sportradar’s website code, and interviewed 15 current and former employees. The firm alleged that illegal operators account for an estimated 20–40% of Sportradar’s revenue and a larger proportion of its profits.
Muddy Waters claimed the company would be unprofitable without that income, and said it identified nearly 50 clients and collaborators it believed to be operating in illegal markets.
Both firms alleged that the majority of the illegal operators served by Sportradar hold licences from Anjouan, an autonomous island in the Union of Comoros whose gaming regulator has been widely criticised for issuing questionable licences.
Other platforms hold licences from Curaçao and Malta, but Callisto and Muddy Waters allege they still operate in markets where online gambling is prohibited.
ICE undercover operation
According to Muddy Waters, an Asia-focused sales executive allegedly walked undercover investigators through product offerings tailored to illegal markets at ICE Barcelona in January and offered to introduce them to the Yabo Group, which the report describes as China’s largest illegal gambling operator.
The claim is attributed solely to Muddy Waters’ investigators and has not been independently verified.
Callisto also alleged that Sportradar has continued to pursue new business in Russia despite its 2022 commitment to suspend fresh investment there following the country’s invasion of Ukraine.
Regulatory and legal pressure
Both short sellers claim to have shared their findings with regulators in the US and Europe. Callisto stated that several regulatory reviews are already underway. Callisto warned that Sportradar faces a stark choice: sever ties with unregulated operators or risk licensing and partnership consequences across North America and Europe.
Any sustained regulatory action could also threaten the company’s data rights agreements with the NBA, NFL, MLB, FIFA, UEFA and the Bundesliga.
Hagens Berman has announced an investigation into whether Sportradar’s pre-22 April disclosures may have violated federal securities law.
The development compounds a difficult period for the company, which is also facing dual antitrust lawsuits filed by Altenar Technologies in New Jersey and London, and did not renew its American Gaming Association membership in January.
Sportradar hits back
Sportradar moved to rebut both reports before markets closed, issuing a statement that directly challenged the short sellers’ motives and methodology. A company spokesperson said:
“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.”
The company stated it works exclusively with licensed operators, follows strict global compliance and due diligence standards, and stands by its independently audited financial statements and risk disclosures. The spokesperson added:
“We conduct our business with the highest ethical standards consistent with Sportradar’s policies and applicable laws and regulations.”
Sportradar described the reports as containing specific factual inaccuracies but did not enumerate them publicly.
The company’s positioning as an integrity provider sits at the heart of the dispute: CEO Carsten Koerl has publicly described the company as the equivalent of “the FBI of gambling,” and on the Q3 2025 earnings call outlined a four-level KYC process and close monitoring of illegal market activity, practices both short sellers characterised as inadequate.
Several brokerages trimmed price targets but retained positive ratings. BTIG lowered its target to $23 from $24 and Truist Financial cut its to $26 from $32, both maintaining buy ratings, according to analyst note summaries reported by The Fly.
What comes next
Sportradar is scheduled to report Q1 2026 results on 6 May, with analysts expecting revenue of $361 million, up from $311 million a year earlier. The results will face intense scrutiny from investors and counterparties in regulated markets, while regulators continue separate reviews.
The stock has now fallen approximately 44% year to date.
If any material portion of these estimates proves accurate, it could imply a fundamental restructuring of Sportradar’s client base and a significant near-term earnings hit.
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