The finance chief of sports data firm Sportradar is named as a defendant in a class action lawsuit accusing the company of working with “black-market gambling operators” to boost revenue.
The suit, filed in the U.S. District Court for the Southern District of New York on May 18, comes on the heels of a pair of short-seller reports alleging that some of Sportradar’s overseas customers were involved in illegal gambling. On its website, Sportradar touts several high-profile organizations under its “partners and clients,” including the NBA, the MLB and NASCAR. Sportradar, which is headquartered in Switzerland but has offices in the United States, also provides data to prediction markets company Polymarket.
Sportradar CEO Carsten Koerl and CFO Craig Felenstein are listed as defendants in the case, which was brought by an individual named James Anthony Smale on behalf of investors who bought shares of Sportradar between November 2024 and April 2026.
Though Sportradar executives issued assurances of “strict legal and regulatory compliance”, elements of the company’s compliance processes were “not as robust” as the defendants claimed, the complaint alleged. The plaintiff pointed to reports issued by short-sellers Muddy Waters and Callisto Research that claimed Sportradar had “ties to a sprawling network of black-market operators.”
The Muddy Waters report alleged 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.”
The class action suit went on to say that Sportradar, Koerl and Felenstein “misrepresented and/or failed to disclose” the company’s alleged ties to illegal gambling operators. The suit accused the firm of two counts of violating the Securities Exchange Act of 1934.
While the suit spelled out CEO Koerl’s comments on media interviews and earnings calls, its depiction of Felenstein’s specific actions pertained primarily to his signing off on annual reports and 6K forms filed with the Securities and Exchange Commission
Sportradar officials didn’t immediately respond to a request for comment sent Tuesday morning. An attorney for plaintiff Smale also didn’t reply to an emailed request for comment.
The class action suit is only the latest turn in ongoing legal battles surrounding prediction markets and the data providers that fuel them. For example, Polymarket has been blocked in Indonesia, and the company and its competitor Kalshi have been temporarily banned in Spain for operating without a gambling license. Meanwhile, last month, federal prosecutors alleged that a U.S. Army master sergeant traded Polymarket prediction contracts relating to the American apprehension of Venezuelan leader Nicolás Maduro.
Such instances have raised concerns that prediction markets are sometimes being influenced by the people or forces they’re meant to observe. In Sportradar’s case, leaders have maintained that the company works only with licensed operators and abides by the rules of the jurisdictions it operates in.
“We stand by our independently audited financial statements, risk disclosures, and information provided to investors and regulators,” a Sportradar spokesperson said in a statement in the wake of the reports by Muddy Waters and Callisto, according to a report by Front Office Sports. “We conduct our business with the highest ethical standards consistent with company policies, laws and regulations.”
