A proposed securities class action is targeting Sportradar Group AG after a shareholder accused the sports betting technology company of misleading investors about its compliance controls and connections to illegal gambling operators.
Investor James Anthony Smale filed the lawsuit May 18 in federal court in Manhattan. The case seeks to represent people who purchased Sportradar Class A shares between November 7, 2024, and April 21, 2026. The complaint names the company along with Chief Executive Officer Carsten Koerl and Chief Financial Officer Craig Felenstein.
Sportradar supplies betting data, odds services, fraud detection tools and audiovisual content to sportsbooks and sports leagues worldwide. The company works with organizations and operators including the NBA, MLB, NHL, PGA Tour, FIFA, DraftKings, FanDuel and Bet365. Its shares trade on the Nasdaq under the symbol SRAD.
According to the complaint, Sportradar repeatedly assured investors that the company followed strict legal and regulatory standards when onboarding sportsbook customers. The suit says executives stressed detailed “Know-Your-Customer” screening procedures meant to verify operators were properly licensed.
The filing states comments Koerl made during a November 2025 earnings call, when he described a “four-level process” to confirm the company “only work[s] with licensed operators.” Koerl also said Sportradar had “a global compliance team, which is making an intensive KYC with every operator.”
The complaint also points to an April 2025 CNBC interview where Koerl compared the company’s integrity division to “the SEC or the FBI” for the gambling industry.
Sportradar illegal gambling reports triggered stock decline
The lawsuit says investors learned damaging information on April 22, 2026, after Muddy Waters Research and Callisto Research released reports alleging that Sportradar maintained extensive relationships with operators active in black and gray gambling markets.
According to the complaint, Muddy Waters alleged 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.” Investigators posing as sportsbook operators reportedly spoke with Sportradar sales staff during a gaming conference and were allegedly told the company “serves everyone.”
The report also described introductions to operators connected to illegal Asian gambling markets, including the Yabo Group, which the complaint characterizes as a well-known illegal betting operation in China.
Callisto Research separately claimed that more than 270 gambling platforms using Sportradar products or services were operating illegally in regulated or prohibited jurisdictions. The report further alleged that regulators in North America and Europe had started reviewing the company’s activities.
Sportradar denied the allegations after the reports were published, calling the claims inaccurate and defending its compliance practices. The company also disputed assertions that it knowingly worked with illegal operators.
Shares of Sportradar dropped 22.6% on April 22, falling from $16.84 to $13.04 after the reports became public, according to the lawsuit. The complaint alleges the company and its executives violated federal securities laws by making misleading statements and concealing the extent of alleged dealings with unlawful betting operators.
ReadWrite has reached out to Sportradar for comment.
Featured image: Sportradar
