A Sportradar investor has filed a lawsuit against the company following the allegations of illegal activity made by two short selling investment research firms last month.

James Anthony Smale has filed his claim in the US District Court of the Southern District of New York, with Sportradar’s Chief Executive Officer, Carsten Koerl, and Chief Financial Officer, Craig Felenstein, named as defendants, alongside the company itself.

Smale is claiming that Sportradar leadership had made ‘false and misleading statements’ to its investors regarding the business’ commercial relationships with the black market during quarterly earnings calls, citing investor conferences in 2025.

As last month’s allegations led to a sharp decline in Sportradar’s stock price, investors like Smale will have felt a financial sting. Smale is claiming damages from the short sellers, while also claiming that Sportradar has violated the Exchange Act and rules set by the US Securities and Exchange Commission (SEC).

Ever since the short sellers’ allegations were made, Sportradar has strongly denied that the commercial relationships it is accused of engaging in exist.

Muddy Waters and Callisto

On 22 April, Muddy Waters Research and Callisto Research jointly published reports claiming that Sportradar has been providing its sportstech and data services to black market betting firms targeting unregulated Asian markets 

The accusation places the Nasdaq technology group under severe scrutiny, in its status as the leading provider of integrity services and intelligence for global sports leagues and governing bodies including FIFA, UEFA, NBA, NHL and CONMEBOL. 

Allegations included claims that Sportradar has been working with Asian organised criminal groups such as China’s ‘infamous Yabo Group’ and illegal gambling operations in ‘Russia, Turkey and several Asian markets’, as cited in Smale’s suit.

In the aftermath of the reports, Sportradar’s share price fell 22.75% from a high of $18 per share over the previous five days to $13 at the close of trading on 22 April. It has averaged between $12-$14 ever since.

As both Muddy Waters and Callisto had both openly shorted Sportradar stock, the duo likely cashed in when Sportradar’s stock took a tumble on the New York Nasdaq.

Understandably, Sportradar was quick to fire back against the allegations. Koerl labelled the claims a ‘personal attack’, while a Sportradar statement issued soon after the allegations were made public stated that it would “unequivocally challenge these assertions”.

In Sportradar’s Q1 earnings call towards the end of April, Koerl provided some clarity on what he and Fellenstein believe is the extent of Sportradar’s exposure to black and grey betting markets.

Koerl told investors that the firm’s exposure to the grey market was likely ‘between low-to-mid single digit numbers’ – estimating 5% at the lower end and about 12%-13% on the higher end of the spectrum.

“We do not work with black market operators,” he asserted. “For the grey market, we have a solid compliance structure in place, and we only work with licensed operators. The measurements we apply here are a risk assessment, and irrespective of licensing and jurisdictions, we only support businesses which have a licence.”

Is everyone piling on Sportradar?

The aftermath of the allegations against Sportradar and the subsequent decline in the value of its shares undoubtedly caught a lot of attention.

Smale’s lawsuit is just the latest in a series of followups to the allegations, with several securities-focused law firms having been quick to prep their briefcases once Muddy Waters and Calllsto’s reports were published.

As soon as the allegations were made public on 22 April, multiple law firms were putting out statements. A statement was published by the Los Angeles-based Law Offices of Frank R Kutz on 22 April, the day allegations were made, for example. Several more followed in late April and early May.

Kessler Topaz Meltzer & Check LLP, the law firm which is representing Smale in his lawsuit against Sportradar, published a statement on 8 May stating that it was investigating potential violations of securities laws by the company and encouraged investors to get in touch.

Another New York law firm, Kirby McInerney LLP, has issued a similar statement, reminding investors that they have until 17 July to join the lawsuit. This is the deadline for investors to sign up as lead plaintiffs in the claim.

Amid all this talk of ‘official investigations’, however, there is a very important factor to remember – firstly, investor complaints against companies facing allegations, such as in the aftermath of short sellers’ reports, are hardly uncommon.

Secondly, and most importantly, these ‘official investigations’ are being conducted by private law firms with a specialty in securities law, not by any government agency. As of yet, no government agency or regulator has officially commenced an investigation into Sportradar.

In short, the investigations could amount to something, or they could just be cases of ambulance chasing… a lived reality of all US PLCs in a litigious spectrum of sports, media and betting markets.  

Whether it is or not is now for the courts to decide, and for regulators like the SEC – if the regulators decide there is actually enough weight behind the allegations to warrant an investigation in the first place.

Whatever the outcome, Sportradar will be scarred by proceedings that derail its overriding ambitions to become the highest valued sports tech and data intelligence firm.