Running scared

Private equity giants struggle to force ex-FanDuel founder to fold

Apr 23, 2025

Nigel Eccles fights on in ‘audacious’ David vs. Goliath battle.
Koerl and other shareholders are to sell up part of their Sportradar holdings.
BofA the latest analyst to downgrade DraftKings’ Q1 estimates.
Venture playground: ALT Sports Data’s seed round, Tequity in focus.

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On the ropes

Barbarians on the make: The big-name private equity firms alongside Flutter on the other side of the legal case with former FanDuel founder Nigel Eccles are now attempting stalling tactics after failing to persuade a judge to throw the case out.

Jarndyce vs. Jarndyce: Legal sources suggested KKR and Shamrock, together with Flutter, have been attempting to rack up the costs in the six-year legal battle involving the five founders of FanDuel against the PE firms that took it over and sold the company to Flutter just before the fall of PASPA in 2018.

This is evidenced by the number of “big name, aggressive" law firms on the ticket, said one legal source.
Litigation houses including Proskauer Rose, King & Spalding and Quinn Emanuel are among “the top firms in the US” that are putting their big-name – i.e. most expensive – lawyers on the case.
The little guy: In comparison, Eccles’ case is being led by a five-person team in the Chicago office of Bartlit Beck, a much lesser-known trial firm.

Tooth and claw: In an arbitration claim against Eccles, KKR et al alleged he has “repeatedly and flagrantly” breached his separation agreement with the company, signed in November 2017, by “actively recruiting and assisting other plaintiffs” in litigating against it.

The claimants are using the arbitration to try to claw back $8m Eccles got when he left the company.
They also want him to sever his claims from the other plaintiffs, who they say he “improperly recruited.”

They wrote to the judge at the end of March to tell her about the arbitration – arbitrations are usually totally confidential but this letter is published on the court’s site – because, they said, “an arbitral award providing these remedies could significantly affect this case.”

David vs. Goliath: The litigation brought by the circa 140 ordinary shareholders, led by Eccles, is “really audacious,” according to a legal source. Nevin Gewertz, partner at Bartlit Beck, told The Sunday Times that when both the New York State Supreme Court and its Appellate Division went against them “we thought at that point that we were cooked.”

“The only way to get it back was to appeal to New York’s highest court,” he said.
“The issue is that that court accepts cases at its own discretion – it only takes about two per cent of cases and half of those are criminal.”
“When they said they would take our case that was a win in itself”.

Discovery channels: KKR, Shamrock and Flutter initially tried by filing a motion to dismiss last September and they also dragged their heels on discovery.

But Justice Andrea Masley ordered in February that a “discovery master” be appointed to oversee the process to ensure that each side was releasing the documents the other side requires for their case.

This’ll cost you: Since that point, KKR, Shamrock and Flutter have proceeded to try to massively rack up the costs. In their latest stalling tactic Flutter and the investors have launched arbitration proceedings against Eccles.

Bartlit Beck is acting on a no-win, no-fee basis, so hitting them on cost hurts Eccles and it hurts the firm. “It’s a tactic to try to make them cave,” suggested the legal source.

Eccles has hit back, asking the judge at the start of April to issue a temporary restraining order against the defendants as well as preliminary and permanent injunctions to stop the arbitration.

His court documents say it is “an improper effort to throw a wrench into this action.”
The judge has ordered the Flutter side to file any papers opposing this by April 25.
Eccles must file any reply to that by May 2, then there will be a hearing for them to fight it out on May 5.

Personal touch: Gewertz told The Sunday Times that Eccles had opted for a jury trial because of the David vs. Goliath nature of the case, believing it plays to their strengths.

“People might say this is a complicated case and a judge would be better able to understand the financial structures,” he said. “But at the end of the day this comes down to personal stories.”

Dam and blast: He said the narrative about a group of founders who built this hugely valuable company and never cashed out along the way because of their belief in it is very compelling.

Shamrock and KKR came in and “then when the rocket ship was about to take off said it was worth less than half than when they invested in it.”
“We want a jury to say whether that makes sense.”

Venture capital firm Yolo Investments manages in excess of €500m in capital across 100 exciting fintech, gaming and blockchain companies. The Yolo Investments' Gaming fund, regulated by the Guernsey Financial Services Commission, has taken positions in fast-growth suppliers and operators, including Dabble and Enteractive. Yolo Investments (yolo.io) wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat about innovative products which can plug into our investment ecosystem.

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Implausible deniability: An Israel-based intelligence agency called Black Cube has been revealed as the authors of a report on alleged black market activity by Evolution that the company said damaged its reputation. However, Black Cube claimed not to know the identity of the client that commissioned the report.

Earnings in brief: The Colorado-focused casino operator Monarch Casino reported revenues for Q1 of $125m, up 3% YoY, and adj. EBITDA of $41m, a 7% uplift. The company said it had made market share gains in its key Black Hawk market.

Sportradar share sale

Chunk of change: Sportradar’s founder and CEO Carsten Koerl, along with shareholders the Canada Pension Plan and an affiliate of Technology Crossover Ventures, are to sell down chunks of their holdings as part of a ~$575m secondary offering.

The offering of 23m shares will be underwritten by bookrunners Goldman Sachs and JP Morgan.
At the same time, Sportradar will itself concurrently purchase 3m shares, or up to $75m-worth, as part of its previously authorized $200m share buyback authority.

Prelim: On announcing the news of the share sale, Sportradar also pre–announced its preliminary Q1 earnings, saying revenue would come in at ~$307m-$311m and adj. EBITDA would be in the range of $56m-$58m.

At midpoint this would represent a 16% YoY revenue uplift and a 21% boost to adj. EBITDA compared to Q124.
The company said it will release its full earnings on Monday, May 12.

Vote of confidence: Separately, Sportradar was subject of positive analyst reports this week after Bank of America upgraded it to a Buy, saying there is “higher confidence” in the company’s growth trajectory.

The team added that there was increased visibility on costs, the “option value” from the recent IMG Arena deal and from ongoing AI adoption.
Sportrtadar’s shares were up 9% yesterday in line with the general market buoyancy but were down 3% AMC.

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DraftKings’ downgrade

Fly off the handle: As was foreshadowed a week ago by the analysts at Bank of America, the team has downgraded their Q1 forecasts for DraftKings and suggested investors should be on the lookout for what the company plans to do to “re-accelerate” its handle performance.

Recall, Deutsche Bank said 10 days ago that “fixating” on hold issues was a distraction and that sluggish handle growth could pose more issues for this year.

Sticking out: The BofA team now suggest the “slowing” handle trends evident in recent months, coupled with the rise of prediction markets, indicated DraftKings implied mid-teens handle guidance for the year has “turned into a big overhang.”

The analysts noted it has been suggested by others that handle is an “imperfect measure of activity.”
But they argued DraftKings “clearly needs to articulate what the offset is or what will re-accelerate growth to move past this debate.”

What we’re writing

Plug: E+M’s Scott Longley wrote on what the analysts are saying about DraftKings for Third Planet’s new sports-betting news site, InGame, this week.

Quick takes

Bally’s: Deutsche Bank analysts have highlighted comments from George Papnier, Bally’s president, to the effect that the company was only working off information previously publicly available when it decided to buy into Australia’s troubled Star Entertainment. He told the Australian Financial Review that the previous management had “not done a good job on turning around quickly enough, so there’s an opportunity there.”

Deutsche Bank has initiated on Genius Sports with a Buy rating, noting the company has several “defensive characteristics,” including that ~60% of its business comes from predictable fixed revenue streams, has limited risks in an economic downturn and enjoys a growing free cash flow profile.

Transitory authority: The team at Jefferies said the March state-by-state data for B&M gaming would suggest the previous month's declines represented a “transitory weakness” rather than indicating a wider gaming downturn. The team said they expect March and Q125 to be flat YoY.

Venture playground

Fundraising news – ALT Sports Data

Relay race: Alternative sports-betting data provider ALT Sports Data has closed a $5m seed funding round co-led by Relay Ventures and Eberg Capital, with participation from Motley Fool Ventures, Scrum Ventures and a consortium of strategic investors.

The company said the investment round was “significantly oversubscribed.”

Emerging alternatives: The company said its recent deals, including exclusive content distribution partnerships with Formula 1 and X Games were “reinforcing its dominant position” in the rapidly expanding emerging sports category.

ALT Sports Data now has a portfolio of over 25 premier sports properties and is, according to CEO and founder Joe Dunnigan, “more than a data provider” and is becoming the “connective tissue between next-gen sports, sportsbooks and fans.”

Unlocked and untapped: At the core of that engagement strategy is NXTbets, ASD’s owned-and-operated content platform, which provides betting information, odds marketplaces and sportsbook discovery.

The offering is “unlocking untapped markets with the same discipline and scale as the traditional sports data giants,” said John Albright, managing partner at Relay.

Growth company news

Hacksaw Gaming is reported to be considering an IPO in Stockholm, according to Bloomberg, which said the company has hired Carnegie Investment Bank, Citigroup and Jefferies to advise. The report said Hacksaw, which was formed 10 years ago in Stockholm and now has operations in Malta, reported earnings of €57m in 2023.

Light & Wonder has bought a 20% stake in games development studio Bang Bang Games for an undisclosed sum. The gaming supplier giant said the studio would now become part of its Spark program, its in-house games development studio incubator. The previously UK- and Europe-focused Bang Bang Games will now be setting its sights on expansion in North America.

Geolocation challenger Xpoint has appointed Tom Flaherty as its new CFO. Posting on LinkedIn, Xpoint said that with a proven track record in financial leadership, fundraising and M&A across the software, SaaS, and tech sectors, Flaherty joins at a “pivotal moment.”

In focus – Tequity

Who are you? Led by CEO Krzysztof Opałka, Tequity started life as a remote game server (RGS), quickly securing partnerships with top-tier studios such as AvatarUX, Peter & Sons and Fantasma Games.

Opałka previously held key leadership roles at Yggdrasil and was a technical advisor at BeyondPlay.
He is supported by industry veteran Fredrik Elmqvist in an advisory capacity.

What’s the big idea? The mission, says Opałka, is “to capitalize on the company’s technology, expertise and strong industry reputation to offer high-quality, cutting-edge products and services.”

Now with more than 15 RGS clients, “it has become the go-to solution in the industry, attracting growing interest from both B2B providers and B2C operators looking to create exclusive content,” he adds.
The RGS is available through a subscription model or a one-off payment, giving licensees full control and independence.
Recently, the company introduced its second product vertical, Original Games, a collection of instant games such as Plinko, Dice and Crash.
“These games offer extensive customization options, allowing casinos to tailor them to their needs, leading to their branding as White Label Originals,” explains Opałka.

“This is just the beginning – there are many exciting developments in the pipeline.”

KPIs: Last year, Tequity “doubled” the number of its RGS clients, resulting in “100% YoY growth” in both revenue and EBIT. The growth story is projected to continue with its White Label Original Games expected to “generate impact” this year.

Funding backgrounder: The company is entirely bootstrapped.

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