DraftKings Under Federal Investigation from SEC

The Securities and Exchange Commission is investigating DraftKings over its acquisition of Bulgaria-based sports betting technology firm SBTech. The investigation stems from allegations made by Hindenburg Research of SBTech’s involvement with black-market gaming, money laundering and organized crime.

Hidenberg, a financial research firm and short seller, published a report in June that described SBTech’s alleged black market operations, including ties to illegal online gaming in China, Thailand, and Vietnam. DraftKings bought SBTech in December 2019 as part of its SPAC merger to go public.

“It is not uncommon for the SEC to investigate allegations in short-seller reports,” a DraftKings spokesperson said in a statement to ESPN. “The SEC inquiry does not suggest any wrongdoing or agreement with the short-seller allegations, and we intend to cooperate with the SEC inquiry.”

In other DraftKings news, the Chicago Cubs received approval last week from the Commission on Chicago Landmarks to build a two-story sportsbook adjacent to Wrigley Field. The Cubs announced a partnership with DraftKings last year.

“The way [fans] consume baseball is different through emerging technology and content platforms. Sports wagering is becoming a big part of that change and this sportsbook will allow us to connect fans to the game in new ways,” Cubs spokesman Julian Green told the Chicago Tribune.