{"id":355,"date":"2021-06-17T16:41:31","date_gmt":"2021-06-17T13:41:31","guid":{"rendered":"https:\/\/xxbet-company.com\/draftkings-slumps-as-hindenburg-research-alleges-sbtech-ties-to-illegal-gambling-organized-crime\/"},"modified":"2021-06-17T16:41:31","modified_gmt":"2021-06-17T13:41:31","slug":"draftkings-slumps-as-hindenburg-research-alleges-sbtech-ties-to-illegal-gambling-organized-crime","status":"publish","type":"post","link":"https:\/\/xxbet-company.com\/ja\/draftkings-slumps-as-hindenburg-research-alleges-sbtech-ties-to-illegal-gambling-organized-crime\/","title":{"rendered":"DraftKings Slumps as Hindenburg Research Alleges SBTech Ties to Illegal Gambling, Organized Crime"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_34 counter-flat ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">\u76ee\u6b21<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1'><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/xxbet-company.com\/ja\/draftkings-slumps-as-hindenburg-research-alleges-sbtech-ties-to-illegal-gambling-organized-crime\/#Hindenburg_Highlights_SBTech_Shady_Dealings\" title=\"Hindenburg Highlights SBTech Shady Dealings\">Hindenburg Highlights SBTech Shady Dealings<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/xxbet-company.com\/ja\/draftkings-slumps-as-hindenburg-research-alleges-sbtech-ties-to-illegal-gambling-organized-crime\/#Illicit_Asian_Operations\" title=\"Illicit Asian Operations\">Illicit Asian Operations<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/xxbet-company.com\/ja\/draftkings-slumps-as-hindenburg-research-alleges-sbtech-ties-to-illegal-gambling-organized-crime\/#At_Least_One_Bank_Defends_DraftKings\" title=\"At Least One Bank Defends DraftKings\">At Least One Bank Defends DraftKings<\/a><\/li><\/ul><\/nav><\/div>\n<p>Shares of DraftKings (NASDAQ:DKNG) are sliding Tuesday after noted short-selling activist Hindenburg Research published a lengthy report. The report alleges the gaming company\u2019s SBTech unit operates in jurisdictions where sports betting is illegal, and may have connections to money laundering and organized crime.<\/p>\n<figure aria-describedby=\"caption-attachment-176433\" data-style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" class=\"wp-image-176433 lazyload\" src=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-142x95.jpg?x38396\" data-src=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-142x95.jpg?x38396\" alt=\"Hindenburg Research\" width=\"1200\" height=\"800\" data-srcset=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-142x95.jpg 142w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-1024x683.jpg 1024w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-768x512.jpg 768w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-1536x1024.jpg 1536w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-2048x1365.jpg 2048w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-600x400.jpg 600w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" data- title=\"\"><img loading=\"lazy\" class=\"wp-image-176433\" src=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-142x95.jpg?x38396\" alt=\"Hindenburg Research\" width=\"1200\" height=\"800\" srcset=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-142x95.jpg 142w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-1024x683.jpg 1024w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-768x512.jpg 768w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-1536x1024.jpg 1536w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-2048x1365.jpg 2048w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/06\/HR-600x400.jpg 600w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" title=\"\"><figcaption class=\"text-description\">Hindenburg Research founder Nathan Anderson, seen above. A new report from his firm says DraftKings unit SBTech runs illegal gambling operations. (Image: Johnny Milano\/<em>Fortune<\/em>)<\/figcaption><\/figure>\n<p>Founded by <a href=\"https:\/\/www.casino.org\/news\/draftkings-director-shalom-meckenzie-buys-cryptopunk-7523-nft\/\" rel=\"nofollow noopener\" target=\"_blank\">Shalom Meckenzie<\/a>, one of the richest men in Israel, SBTech was part of a 2020 three-way reverse merger involving DraftKings and special purpose acquisition company (SPAC) Diamond Eagle Acquisition Corp. That transaction paved the way for DraftKings to <a href=\"https:\/\/www.casino.org\/news\/draftkings-ipo-coming-in-2020-after-merger-with-diamond-eagle-sbtech\/\" rel=\"nofollow noopener\" target=\"_blank\">become a publicly traded entity.<\/a><\/p>\n<div class=\"callout\">\n<p>At that time, SBTech, which is based in Bulgaria, contributed a quarter of the combined company\u2019s revenue and \u201cwas the only positive contributor to operating income, providing both financial stability and technology to the deal,\u201d according to Hindenburg. However, the research firm, which took a short position in the gaming stock, adds there\u2019s a dark side to those benefits.<\/p>\n<\/div>\n<p>\u201cUnbeknownst to investors, DraftKings\u2019 merger with SBTech also brings exposure to extensive dealings in black-market gaming, money laundering, and organized crime,\u201d said the research firm. \u201cWe estimate that roughly 50 percent of SBTech\u2019s revenue continues to come from markets where gambling is banned, based on an analysis of DraftKings\u2019 SEC filings, conversations with former employees, and supporting documents.\u201d<\/p>\n<p>Sports wagering industry observers and some professional bettors have pointed to a slow rollout of the SBTech platform in states in which DraftKings offers mobile sports betting. The Boston-based company primarily uses software provided by Sweden\u2019s Kambi for back-end infrastructure. But that relationship is <a href=\"https:\/\/www.casino.org\/news\/draftkings-kambi-will-amicably-end-deal-by-sept-30-2021\/\" rel=\"nofollow noopener\" target=\"_blank\">supposed to end later this year<\/a>.<\/p>\n<p>Prior to the aforementioned SPAC transaction, there were rumors that DraftKings was looking <a href=\"https:\/\/www.casino.org\/news\/draftkings-to-buy-sbtech-multiple-sources-say-deal-is-close\/\" rel=\"nofollow noopener\" target=\"_blank\">to acquire SBTech<\/a> as part of its quest to become vertically integrated.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Hindenburg_Highlights_SBTech_Shady_Dealings\"><\/span>Hindenburg Highlights SBTech Shady Dealings<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Leading up to the blank-check transaction, SBTech supposedly made efforts to distance itself from its black market business. Citing former employees, Hindenburg says SBTech executive Tom Light \u2014 described by one former staffer as Meckenzie\u2019s \u201cright-hand man\u201d \u2014 left the company to head up an entity known as BTi.<\/p>\n<p>That business, which would later be called CoreTech, acted as a front for SBTech to continue doing business in Asian markets where sports betting isn\u2019t permitted.<\/p>\n<p>\u201cBefore SBTech joined with DraftKings, they split the grey market\/unregulated\u2026they [Bti] are a separate company marketing their white label solution to the Middle East, South America, mostly China and Malaysia,\u201d a former employee said in the Hindenburg report. \u201cTheir technology provider is SBTech. Because SBTech is now on NASDAQ, they don\u2019t want Asia or the grey market to give it a bad influence. They want to be clean.\u201d<\/p>\n<div class=\"callout\">\n<p>A second ex-staffer told the research firm that \u201cwell over 90 percent\u201d of CoreTech\u2019s revenue is derived from black or gray markets. DraftKings regulatory documents indicate an unidentified customer focusing on Asia generated 46 percent of SBTech\u2019s 2019 revenue, with that percentage climbing to 52 percent last year.<\/p>\n<\/div>\n<p>Adding to the drama, the CEO of CoreTech is Amir Vankin. He previously led SpotOption, an Israeli binary option that was raided by the FBI in 2017 and later charged by the Securities and Exchange Commission (SEC) with duping US investors out of $100 million.<\/p>\n<p>\u201cAs alleged, investors were not told that the defendants\u2019\u00a0white label partners were the counter-parties on all investor trades, and thus profited when the investors lost money,\u201d <a href=\"https:\/\/www.sec.gov\/news\/press-release\/2021-66\" rel=\"nofollow noopener\" target=\"_blank\">according to an April statement<\/a> issued by the SEC. \u201cTo ensure sufficient investor losses and make the scheme profitable, Spot Option allegedly, among other tactics, instructed its partners to permit investors to withdraw only a portion of the monies the investors deposited, devised a manipulative payout structure for binary options trades, and designed its trading platform to increase the probability that investors\u2019\u00a0trades would expire worthless.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Illicit_Asian_Operations\"><\/span>Illicit Asian Operations<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In the Asia-Pacific region, there are some countries where sports wagering is regulated. For example, Australia is one of the largest sports betting markets in the world. In Macau, the world\u2019s largest casino hub, Macau Slot Co Ltd. has an instant lottery business and is allowed to accept wagers on basketball and soccer, while <a href=\"https:\/\/www.casino.org\/news\/japan-sports-betting-expansion-could-lead-to-65-billion-market\/\" rel=\"nofollow noopener\" target=\"_blank\">Japan permits betting<\/a> on cycling, horse racing, and motorboat and motorcycle racing.<\/p>\n<p><strong>Hindenburg claims BTi\/CoreTech operates on the fringes, including running a Mandarin and Thai language sports betting website out of Thailand that was recently raided by authorities. Both China and Thailand forbid sports wagering. The research firm adds SBTech has ties to Vietnamese betting operations allegedly controlled by a triad kingpin \u2014 Paul Phua.<\/strong><\/p>\n<p>\u201cIn addition to apparent black-market bookmaking, 12Bet is, or was, owned by <a href=\"https:\/\/www.espn.com\/chalk\/story\/_\/id\/14095257\/how-world-biggest-bookie-paul-phua-was-snared-fbi-last-year-world-series-poker-walked-away-free-man\" rel=\"nofollow noopener\" target=\"_blank\">Paul Phua<\/a>, according to an <a href=\"https:\/\/www.nacional.hr\/football-leaks-how-chinese-triad-online-bookmaker-paul-phua-bought-coast-of-montenegro\/\" rel=\"nofollow noopener\" target=\"_blank\">investigation<\/a> commissioned by the Swiss IHAG Bank,\u201d said the research firm. \u201cThe US Department of Justice has <a href=\"https:\/\/www.espn.com\/chalk\/story\/_\/id\/14095257\/how-world-biggest-bookie-paul-phua-was-snared-fbi-last-year-world-series-poker-walked-away-free-man\" rel=\"nofollow noopener\" target=\"_blank\">alleged<\/a> that Phua is a senior member of the <a href=\"https:\/\/www.nacional.hr\/football-leaks-how-chinese-triad-online-bookmaker-paul-phua-bought-coast-of-montenegro\/\" rel=\"nofollow noopener\" target=\"_blank\">14K Triads<\/a>, one of the most dangerous <a href=\"https:\/\/en.wikipedia.org\/wiki\/14K_(triad)#Criminal_focus\" rel=\"nofollow noopener\" target=\"_blank\">criminal syndicates<\/a> in the world, known for heroin smuggling and contract murder, among other <a href=\"https:\/\/en.wikipedia.org\/wiki\/14K_(triad)#Criminal_focus\" rel=\"nofollow noopener\" target=\"_blank\">activities<\/a>.\u201d<\/p>\n<p>Hindenburg also alleges that SBTech, in its quest to land a contract with the Oregon lottery in 2019, obfuscated ties to 10bet China \u2014 an illegal gambling operation in that country. A former SBTech employee told Hindenburg that operation is \u201cmassive,\u201d and that Meckenzie continues to profit from it.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"At_Least_One_Bank_Defends_DraftKings\"><\/span>At Least One Bank Defends DraftKings<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In just over a year as a freestanding public company, DraftKings <a href=\"https:\/\/www.casino.org\/news\/draftkings-stock-has-recipe-for-upside-says-cowen-analyst\/\" rel=\"nofollow noopener\" target=\"_blank\">garnered plenty of praise<\/a> on Wall Street, and even with today\u2019s controversy, at least one bank is stepping up to defend the sports betting stock.<\/p>\n<div class=\"callout\">\n<p>Following the Hindenburg report, Credit Suisse released a note saying DraftKings acquiring SBTech was about buying the target\u2019s technology, not its current revenue stream. The bank adds that based on 5x sales, the $105 million in revenue generated by SBTech last year contributes just $1 to DraftKings shares.<\/p>\n<\/div>\n<p>\u201cWhile not ideal, in a worst-case scenario, an SBTech issue would not necessarily interfere with betting operations today,\u201d said Credit Suisse. \u201cWe would use today\u2019s weakness as an opportunity ahead of potential Canada legalization (senate meeting today) as well as New York, both of which are catalysts for DKNG.\u201d<\/p>\n<p>The post <a rel=\"nofollow noopener\" href=\"https:\/\/www.casino.org\/news\/hindenburg-claims-draftkings-sbtech-biz-involved-in-illegal-gambling\/\" target=\"_blank\">DraftKings Slumps as Hindenburg Research Alleges SBTech Ties to Illegal Gambling, Organized Crime<\/a> appeared first on <a rel=\"nofollow noopener\" href=\"https:\/\/www.casino.org\/news\" target=\"_blank\">Casino.org<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>Shares of DraftKings (NASDAQ:DKNG) are sliding Tuesday after noted short-selling activist Hindenburg Research published a lengthy report. The report alleges the gaming company\u2019s SBTech unit operates in jurisdictions where sports betting is illegal, and may have connections to money laundering and organized crime. Hindenburg Research founder Nathan Anderson, seen above. A new report from his firm says DraftKings unit SBTech runs illegal gambling operations. (Image: Johnny Milano\/Fortune) Founded by Shalom Meckenzie, one of the richest men in Israel, SBTech was part of a 2020 three-way reverse merger involving DraftKings and special purpose acquisition company (SPAC) Diamond Eagle Acquisition Corp. That transaction paved the way for DraftKings to become a publicly <a href=\"https:\/\/xxbet-company.com\/ja\/draftkings-slumps-as-hindenburg-research-alleges-sbtech-ties-to-illegal-gambling-organized-crime\/\" class=\"more-link\">&#8230;<\/a><\/p>","protected":false},"author":1,"featured_media":356,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/xxbet-company.com\/ja\/wp-json\/wp\/v2\/posts\/355"}],"collection":[{"href":"https:\/\/xxbet-company.com\/ja\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xxbet-company.com\/ja\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xxbet-company.com\/ja\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/xxbet-company.com\/ja\/wp-json\/wp\/v2\/comments?post=355"}],"version-history":[{"count":0,"href":"https:\/\/xxbet-company.com\/ja\/wp-json\/wp\/v2\/posts\/355\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/xxbet-company.com\/ja\/wp-json\/wp\/v2\/media\/356"}],"wp:attachment":[{"href":"https:\/\/xxbet-company.com\/ja\/wp-json\/wp\/v2\/media?parent=355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xxbet-company.com\/ja\/wp-json\/wp\/v2\/categories?post=355"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xxbet-company.com\/ja\/wp-json\/wp\/v2\/tags?post=355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}