- DraftKings is being accused of having ties to the black-market world of sports betting.
- Since the news broke on Tuesday morning, their stock dropped 13% in the NASDAQ, down over $2 by the afternoon to $48.45 a share.
- The Hindenburg Research Firm that has been investigating DraftKings says these activities began after merging with SBTech in 2020.
NEW YORK – Sports betting conglomerate DraftKings is being accused of having black market ties according to the Hindenburg Research Firm. These accusations have led the company’s shares in the stock market to drop 13% in value as of Tuesday morning when the news broke.
State-regulated sports betting has crowned DraftKings as one of the top sports betting companies in the nation.
The research firm is arguing that the DraftKings merger with SBTech in 2020 is what created their connection to the black-market world of sports wagering. There have been findings that SBTech has been running suspicious businesses in Iran, Malaysia, Thailand, and Vietnam.
The report surmises that SBTech brought DraftKings “exposure to extensive dealings in black-market gaming, money laundering and organized crime.”
“Based on conversations with multiple former employees, a review of SEC & international filings, and inspection of back-end infrastructure at illicit international gaming websites, we show that SBTech has a long and ongoing record of operating in black markets. We estimate that roughly 50% of SBTech’s revenue continues to come from markets where gambling is banned, based on an analysis of DraftKings’ SEC filings, conversations with former employees, and supporting documents.”
DraftKings is one of the best online sportsbooks in the nation where sports betting is available to consumers. The business has skyrocketed to the top and shattered all of the glass ceilings set before them in the world of sports gaming at each and every turn but these accusations could hurt the company immensely.
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After the news went public, DraftKings issued their own response to the allegations.
"Our business combination with SBTech was completed in 2020. We conducted a thorough review of their business practices and we were comfortable with the findings," read the statement issued by DraftKings.
The Outlook For DraftKings
Should these accusations be real, DraftKings status in the online sports betting world will rapidly decline. For the sake of sports bettors, investors, and everyone that has put stake into the company, let's hope that the research firm has gotten their research wrong.
While it wouldn’t be a deathblow for the business, they’d take quite the hit and it one fell swoop they’ll go from being known as DraftKings to DaftKings.
Christina has been writing for different platforms for years. She has a particular interest in writing about any and all sports-related news. If there is a game on, she’s watching it. She has been writing for USAOnlineSportsbooks since 2019.
