Sportradar Group AG shares plunged 24 percent, the most since October 2024, after Muddy Waters Research alleged the sports data firm generates a significant portion of its revenue from illegal gambling operators.
"Sportradar did not support illegal gambling by accident, but as part of a deliberate strategy," Muddy Waters said in a report, estimating such operators contribute 20% to 40% of the company's total revenue.
The report, published jointly with Callisto Research, claims that over 270 betting platforms using Sportradar's data may be operating illegally. The short sellers allege that during a conference in January, Sportradar sales staff offered "tailored solutions" for operating in countries where online gambling is banned. Callisto said it has shared its findings with regulators in the U.S. and Europe.
The stock drop erased nearly a quarter of the company's market value, bringing its year-to-date loss to 44 percent. The allegations challenge Sportradar's reputation as a leader in sports integrity just weeks before it is scheduled to report first-quarter results on May 6.
Despite the sharp decline and serious allegations, some Wall Street analysts maintained a positive view. BTIG trimmed its price target to $23 from $24, while Truist Financial cut its target to $26 from $32. Both firms kept their "Buy" ratings on the stock.
The short-seller report detailed investigators' interactions at the ICE 2026 conference in Barcelona, where they claim sales staff did not reject requests to support operations in black markets. Instead, they allegedly offered introductions to major illegal operators. Muddy Waters said it identified nearly 50 Sportradar clients linked to black and grey markets, including groups with alleged ties to organized crime.
Sportradar, which has a short interest of 4.9 percent, is expected to post revenue of $361 million and earnings of $0.04 per share for the first quarter, according to Fiscal.ai data.
The allegations create a significant overhang for the company, which may face regulatory action or be forced to sever ties with a substantial part of its client base. The company's response to the report and its upcoming earnings on May 6 will be critical for investors.
This article is for informational purposes only and does not constitute investment advice.
