This is in relation to DraftKing’s controversial three-way reverse merger with Bulgaria-based software provider SBTech and special purpose acquisition company (SPAC) Diamond Eagle Acquisition Corp (DEAC).
Among those named are the Draftkings founders, CEO Jason Robins, CRO Matt Kalish, and COO Paul Liberman. Another defendant is Shalom McKenzie, the founder and majority shareholder of SBTech. He is now the biggest shareholder in the combined company with around 11 percent.
Black Market Ops
Yu alleges SBTech has “a long and ongoing record of operating in black markets,” particularly in Asia, which it attempted to conceal prior to the merger by creating a “front” company, BTi CoreTech.
BTi continued the black-market operations, while “ostensibly shielding SBTech and DraftKings from scrutiny,” the lawsuit alleges.
The complaint echoes allegations contained in a report published in June by short-selling activist Hindenburg Research, which estimated that roughly 50 percent of SBTech’s revenues come from jurisdictions where gambling is illegal.
It also repeats Hindeburg’s claim that one of the tech firm’s clients was 12Bet, whose ownership has been linked to high-stakes poker player Paul Phua. The FBI claims Phua is a “high-ranking member of the 14K triads.”
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