Class Action Complaint — In re DraftKings Inc. Securities Litigation (S.D.N.Y.)

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U.S. District Court for the Southern District of New York · No. 1:21-cv-05739-PAE · Doc. 1 · 2021-07-02 · Docket on CourtListener

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UNITED STATES DISTRICT COURT  
SOUTHERN DISTRICT OF NEW YORK 
 
 
KENT J. RODRIGUEZ, Individually and 
On Behalf of All Others Similarly Situated, 
 
Plaintiff, 
 
v. 
 
DRAFTKINGS INC. f/k/a DIAMOND 
EAGLE ACQUISITION CORP., JASON D. 
ROBINS, JASON K. PARK, JEFF 
SAGANSKY, and ELI BAKER, 
 
Defendants. 
 
 
Case No. 
 
 
CLASS ACTION COMPLAINT 
 
 
JURY TRIAL DEMANDED 
 
Plaintiff Kent J. Rodriguez (“Plaintiff”), individually and on behalf of all others similarly 
situated, by Plaintiff’s undersigned attorneys, for Plaintiff’s complaint against Defendants, alleges 
the following based upon personal knowledge as to Plaintiff and Plaintiff’s own acts, and 
information and belief as to all other matters, based upon, inter alia, the investigation conducted 
by and through Plaintiff’s attorneys, which included, among other things, a review of the 
Defendants’ public documents, conference calls and announcements made by Defendants, United 
States (“U.S.”) Securities and Exchange Commission (“SEC”) filings, wire and press releases 
published by and regarding DraftKings Inc. f/k/a Diamond Eagle Acquisition Corp. (“DEAC”, 
“DraftKings”, or the “Company”), analysts’ reports and advisories about the Company, and 
information readily obtainable on the Internet.  Plaintiff believes that substantial additional 
evidentiary support will exist for the allegations set forth herein after a reasonable opportunity for 
discovery. 
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NATURE OF THE ACTION 
1. 
This is a federal securities class action on behalf of a class consisting of all persons 
and entities other than Defendants that purchased or otherwise acquired DraftKings securities 
between December 23, 2019 and June 15, 2021, both dates inclusive (the “Class Period”), seeking 
to recover damages caused by Defendants’ violations of the federal securities laws and to pursue 
remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange 
Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials. 
2. 
DraftKings operates as a digital sports entertainment and gaming company in the 
U.S.  It operates through two segments, Business-to-Consumer and Business-to-Business. The 
Company provides users with daily sports, sports betting, and iGaming opportunities.  It is also 
involved in the design, development, and licensing of sports betting and casino gaming platform 
software for online and retail sportsbook, and casino gaming products.  The Company distributes 
its product offerings through various channels, including traditional websites, direct app 
downloads, and direct-to-consumer digital platforms.  
3. 
DraftKings was incorporated in Nevada as DEAC NV Merger Corp., a wholly 
owned subsidiary of its legal predecessor, DEAC, a special purpose acquisition company, or 
SPAC.  On April 23, 2020, DEAC consummated transactions contemplated by a Business 
Combination Agreement (the “Business Combination”) dated December 22, 2019, as amended on 
April 7, 2020, and, in connection therewith, (i) DEAC merged with and into the Company, 
whereby the Company survived the merger and became the successor issuer to DEAC, (ii) the 
Company changed its name to “DraftKings Inc.,” (iii) the Company acquired DraftKings Inc., a 
Delaware corporation (“Old DK”), by way of a merger, and (iv) the Company acquired all of the 
issued and outstanding share capital of SBTech (Global) Limited (“SBTech”). Upon 
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consummation of the preceding transactions, Old DK and SBTech became wholly owned 
subsidiaries of the Company. 
4. 
Throughout the Class Period, Defendants made materially false and misleading 
statements regarding the Company’s business, operations, and compliance policies.  Specifically, 
Defendants made false and/or misleading statements and/or failed to disclose that: (i) SBTech had 
a history of unlawful operations; (ii) accordingly, DraftKings’ merger with SBTech exposed the 
Company to dealings in black-market gaming; (iii) the foregoing increased the Company’s 
regulatory and criminal risks with respect to these transactions; (iv) as a result of all the foregoing, 
the Company’s revenues were, in part, derived from unlawful conduct and thus unsustainable; (v) 
accordingly, the benefits of the Business Combination were overstated; and (vi) as a result, the 
Company’s public statements were materially false and misleading at all relevant times. 
5. 
On June 15, 2021, Hindenburg Research (“Hindenburg”) published a report 
addressing DraftKings, alleging that the Company’s merger with SBTech exposed DraftKings to 
dealings in black-market gaming.  Citing “conversations with multiple former employees, a review 
of SEC and international filings, and inspection of back-end infrastructure at illicit international 
gaming websites,” Hindenburg alleged that “SBTech has a long and ongoing record of operating 
in black markets,” estimating that 50% of SBTech’s revenue is from markets where gambling is 
banned.” 
6. 
Following publication of the Hindenburg report, DraftKings’ stock price fell $2.11 
per share, or 4.17%, to close at $48.51 per share on June 15, 2021. 
7. 
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline 
in the market value of the Company’s securities, Plaintiff and other Class members have suffered 
significant losses and damages. 
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JURISDICTION AND VENUE 
8. 
The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of 
the Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the 
SEC (17 C.F.R. § 240.10b-5). 
9. 
This Court has jurisdiction over the subject matter of this action pursuant to 28 
U.S.C. § 1331 and Section 27 of the Exchange Act.  
10. 
Venue is proper in this Judicial District pursuant to Section 27 of the Exchange Act 
(15 U.S.C. § 78aa) and 28 U.S.C. § 1391(b), as the alleged misstatements entered and the 
subsequent damages took place in this Judicial District.  Pursuant to DraftKings’s most recent 
Quarterly Report, as of May 5, 2021, there were 400,980,887 shares of the Company’s Class A 
common stock and 393,013,951 shares of the Company’s Class B common stock outstanding. 
DraftKings’s securities trade on the Nasdaq Global Select market (“NASDAQ”).  Accordingly, 
there are presumably hundreds, if not thousands, of investors in DraftKings securities, some of 
whom undoubtedly reside in this Judicial District. 
11. 
In connection with the acts alleged in this complaint, Defendants, directly or 
indirectly, used the means and instrumentalities of interstate commerce, including, but not limited 
to, the mails, interstate telephone communications, and the facilities of the national securities 
markets. 
PARTIES 
12. 
Plaintiff, as set forth in the attached Certification, acquired DraftKings securities at 
artificially inflated prices during the Class Period and was damaged upon the revelation of the 
alleged corrective disclosures.  
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13. 
Defendant DraftKings is a Nevada corporation with principal executive offices 
located at 222 Berkeley Street, 5th Floor, Boston, Massachusetts 02116.  The Company’s common 
stock trades in an efficient market on the NASDAQ under the ticker symbol “DKNG”. 
14. 
Defendant Jason D. Robins (“Robins”) has served as DraftKings’ Chief Executive 
Officer (“CEO”) and Chairman of the Board since the consummation of the Business 
Combination. 
15. 
Defendant Jason K. Park (“Park”) has served as DraftKings’ Chief Financial 
Officer (“CFO”) since the consummation of the Business Combination. 
16. 
Defendant Jeff Sagansky (“Sagansky”) served as DEAC’s CEO and Chairman until 
the consummation of the Business Combination. 
17. 
Defendant Eli Baker (“Baker”) served as DEAC’s CFO and President until the 
consummation of the Business Combination. 
18. 
Defendants Robins, Park, Sagansky, and Baker are sometimes referred to herein as 
the “Individual Defendants.” 
19. 
The Individual Defendants possessed the power and authority to control the 
contents of DraftKings’ SEC filings, press releases, and other market communications.  The 
Individual Defendants were provided with copies of DraftKings’ SEC filings and press releases 
alleged herein to be misleading prior to or shortly after their issuance and had the ability and 
opportunity to prevent their issuance or to cause them to be corrected.  Because of their positions 
with DraftKings, and their access to material information available to them but not to the public, 
the Individual Defendants knew that the adverse facts specified herein had not been disclosed to 
and were being concealed from the public, and that the positive representations being made were 
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then materially false and misleading.  The Individual Defendants are liable for the false statements 
and omissions pleaded herein. 
20. 
DraftKings and the Individual Defendants are collectively referred to herein as 
“Defendants.” 
SUBSTANTIVE ALLEGATIONS 
Background 
21. 
DraftKings operates as a digital sports entertainment and gaming company in the 
U.S.  It operates through two segments, Business-to-Consumer and Business-to-Business. The 
Company provides users with daily sports, sports betting, and iGaming opportunities.  It is also 
involved in the design, development, and licensing of sports betting and casino gaming platform 
software for online and retail sportsbook, and casino gaming products.  The Company distributes 
its product offerings through various channels, including traditional websites, direct app 
downloads, and direct-to-consumer digital platforms.  
22. 
DraftKings was incorporated in Nevada as DEAC NV Merger Corp., a wholly 
owned subsidiary of its legal predecessor, DEAC, a special purpose acquisition company, or 
SPAC.  On April 23, 2020, DEAC consummated transactions contemplated by a Business 
Combination Agreement dated December 22, 2019, as amended on April 7, 2020, and, in 
connection therewith, (i) DEAC merged with and into the Company, whereby the Company 
survived the merger and became the successor issuer to DEAC, (ii) the Company changed its name 
to “DraftKings Inc.,” (iii) the Company acquired Old DK, by way of a merger, and (iv) the 
Company acquired all of the issued and outstanding share capital of SBTech.  Upon consummation 
of the preceding transactions, Old DK and SBTech became wholly owned subsidiaries of the 
Company. 
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Materially False and Misleading Statements Issued During the Class Period 
23. 
The Class Period begins on December 23, 2019, when DraftKings issued a press 
release, filed by DEAC on a Current Report on Form 8-K with the SEC that same day, announcing 
the Business Combination.  That press release made the following representations regarding 
SBTech: 
SBTech Highlights 
 
• SBTech is a premier global full-service B2B turnkey technology provider with 
omni-channel sports betting solutions, trading services, and marketing and 
bonus tools powering some of the world’s most popular sports betting and 
online gaming brands. 
• 50+ partners in 20+ regulated markets and jurisdictions including Czech 
Republic, Denmark, Ireland, Italy, Mexico, Portugal, Spain, Sweden, and U.K. 
and Arkansas, Indiana, Mississippi, New Jersey, Oregon and Pennsylvania in 
United States. 
• Awarded exclusive contract offering mobile and retail sports betting for the 
Oregon state lottery with their Oregon Lottery Scoreboard brand. 
 
“The combination of DraftKings and SBTech brings together two tech-native 
companies with the customer at their cores,” said Gavin Isaacs, SBTech’s 
Chairman. “SBTech will maintain its core business and continue its B2B focus. We 
are excited about the opportunity to join a company with a similar innovation DNA 
and create a unique and differentiated player in global sports betting and online 
gaming.” 
 
24. 
That same day, DEAC filed a Current Report on Form 8-K with the SEC, appended 
to which as an exhibit was the transcript of an investor call to discuss the Business Combination.  
During the call, Defendant Robins touted SBTech, stating, in relevant part: 
Number three, the combination with SBTech, who is the leading B2B innovator in 
sports technology, powering some of the world’s most popular sports betting and 
online gaming brands, creates a unique, vertically integrated, customer focused 
U.S. market opportunity. 
 
 
 
 
 
 
*** 
 
Layering in SBTech, the industry leader in B2B sport’s technology, strengthens us 
and creates a unique, vertically integrated company in the category. SBTech is one 
of the fastest growing tech firms within sports betting, featuring an omnichannel 
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solution. They have a proven track record of outperformance versus industry peers 
on both growth and margin. The company has a global footprint with material new 
opportunities emerging in the U.S., Europe, Africa, Latin America, and Asia. 
 
25. 
On January 13, 2020, DEAC filed a Current Report on Form 8-K with the SEC, 
appended to which as exhibit was an investor presentation (the “January 2020 Investor 
Presentation”).  The January 2020 Investor Presentation described DraftKings and SBTech as a 
“fully integrated platform that enables DraftKings’ mission,” and touted SBTech as a “leader in 
online gaming technology” that is “[p]ositioned as one of the fastest growing tech firms within 
sports betting, with an omni-channel solution,” and has a “[p]roven track record of 
outperformance vs. industry peers on growth and margin” and a “[g]rowing global footprint 
with material new opportunities emerging in Europe, U.S., Africa, Latin America, and Asia.” 
(Emphasis in original.) 
26. 
On March 5, 2020, DEAC filed a Current Report on Form 8-K with the SEC, 
appended to which as an exhibit was the transcript of an interview given by Defendant Robins on 
March 3, 2020 at the Morgan Stanley Technology, Media & Telecom Conference.  During the 
interview, Defendant Robins stated, in relevant part: 
I think for us there were really three objectives that we were trying to solve for.  
And the way we approach anything at the company, including something like how 
do we capitalize the business, what's the best financing route, is we start with what 
are we trying to accomplish and then what is the most effective way to accomplish 
that.  Seems simple enough. 
 
  
So the three things we were trying to accomplish were we had identified this 
company, SBTech, which we felt was a really important part of the full product that 
we needed to build out and we thought this was a great opportunity to really add 
the one piece we thought we were missing on the technology and product side. 
 
27. 
On March 12, 2020, DraftKings issued a press release announcing the Company’s 
full year 2019 results.  The press release stated, in relevant part: 
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“This was a transformative year for DraftKings. We further established ourselves 
as a leader in the rapidly evolving digital sports and gaming industry, launched 
products in six new states and announced a business combination with Diamond 
Eagle and SBTech to become a public company,” said Jason Robins, co-founder 
and Chief Executive Officer of DraftKings. “I am excited to have closed out 2019, 
having achieved net revenue of $323M for the full year, a 43% increase over 2018.” 
 
 
 
 
 
 
*** 
 
Upon close of the business combination, DraftKings will become the only 
vertically-integrated pure-play sports betting and online gaming company based in 
the United States. Through the business combination, DraftKings expects to realize 
synergies by transitioning its risk and trading sports betting platform to SBTech’s, 
instead of relying on a third-party platform. In addition to reducing costs, 
DraftKings will control its backend system and product roadmap, differentiating 
the company from other U.S. operators and giving it the ability to tailor its sports 
betting product to U.S. sports and users. 
 
28. 
On April 23, 2020, DraftKings issued a press release entitled, “DraftKings Closes 
Business Combination and Will Begin Trading on the Nasdaq Stock Exchange.”  The press release 
stated, in relevant part: 
“Today marks another milestone for DraftKings and the future of digital sports 
entertainment and gaming in America,” said Jason Robins, co-founder and CEO of 
DraftKings. “By bringing together our leading consumer brand, data science 
expertise and industry-leading products with SBTech’s proven technology 
platform, we will accelerate our innovation, growth and scale. I am confident that 
the new DraftKings will progress our goal of offering the best, most innovative 
sports and gaming products to our customers.” 
 
29. 
On April 27, 2020, DraftKings filed a Prospectus on Form 424B3 with the SEC 
(the “April 27, 2020 Prospectus”).  The April 27, 2020 Prospectus stated, in relevant part: 
Following the consummation of the Business Combination with SBTech, 
we also plan to expand our offerings to begin serving other operators within our 
industry. We will begin by migrating DraftKings’ own consumer offering onto 
SBTech’s proprietary sports betting platform over time, allowing us to become a 
fully vertically integrated sports betting operator. We will also leverage the 
combined entity’s shared infrastructure to service adjacent branded operators in 
both the United States and internationally at greater scale. This could include online 
sportsbooks, retail sportsbooks, iGaming operators, as well as governments or 
lotteries seeking to manage their own sportsbook or iGaming offerings. SBTech 
offers one of the industry’s most robust platform solutions to satisfy its customers’ 
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sports betting technology needs, ranging from trading and risk management to 
platform services to support reporting, customer management and regulatory 
reporting requirements. SBTech competes with a variety of other sports betting 
technology providers and differentiates itself through this full suite platform 
offering. In addition, SBTech offers a leading iGaming solution via its proprietary 
platform with integrations to third-party iGaming suppliers. 
 
30. 
Further, the April 27, 2020 Prospectus listed as one of the Company’s “Core 
Operating Principles”: 
Act responsibly. We are committed to industry-leading responsible gaming 
practices and seek to provide our users with the resources and services they need to 
play responsibly. We have invested in processes that identify and protect vulnerable 
users. Specifically, we created an internal, independent “Game Integrity and Ethics 
Team” that actively monitors for any indication of activities that may violate 
current regulations governing us, our own terms of use or our “Community 
Guidelines.” This team oversees a framework for our user community to follow in 
determining when a user may need assistance. With our focus on fair and 
responsible gaming along with user protection and data security, users have come 
to know and trust our gaming platform. 
 
31. 
Finally, with respect to compliance, the April 27, 2020 Prospectus stated, in 
relevant part: 
Underpinning our regulatory access is our DraftKings platform that allows us to 
efficiently and safely scale our product offerings into multiple jurisdictions. We 
have developed our DraftKings platform from the ground up to meet the needs of 
the unique regulatory environment that the United States offers, while maintaining 
ease of use for our users. We provide a single experience for login, verification and 
wallet. 
 
SBTech’s platform has been built from the ground up to meet the needs of differing 
regulatory regimes, including configurable regulatory and responsible gaming 
controls such as responsible gaming tests, operator alerts on player behavior, 
deposit limits, betting limits, loss limits, timeout facilities, session limits, reality 
checks, balance thresholds and intended gaming amounts. These features allow the 
operators’ customers full control of their gaming to allow them to play responsibly. 
 
32. 
On May 13, 2020, DraftKings filed a Prospectus on Form 424B3 with the SEC (the 
“May 13, 2020 Prospectus”).  The May 13, 2020 Prospectus contained substantively similar 
statements as those included in the April 27, 2020 Prospectus, referenced, supra, in ¶¶ 29-31. 
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33. 
On May 15, 2020, DraftKings issued a press release announcing the Company’s 
Q1 2020 results.  The press release stated, in relevant part: 
Through its recent business combination, DraftKings has created the only vertically 
integrated sports betting company based in the United States. 
 
“We are uniquely positioned at the intersection of digital sports entertainment and 
gaming in a rapidly growing industry,” said Jason Robins, DraftKings co-founder, 
CEO and Chairman of the Board. “DraftKings recorded standalone Q1 year-over-
year revenue growth of 30% despite the effects of COVID-19.  Additionally, the 
engagement we continue to see from our customers validates the connection they 
have with our content, their passion for our products and most importantly their 
loyalty to our brand.” 
  
34. 
That same day, DraftKings hosted an earnings call with investors and analysts to 
discuss the Company’s Q1 2020 results (the “Q1 2020 Earnings Call”).  During the scripted portion 
of the Q1 2020 Earnings Call, Defendant Robins stated, in relevant part, “[t]hrough the acquisition 
of SBTech, we have created the only vertically integrated sports betting company in the U.S., 
enabling us to be the product innovation leader for American sports, with a clear focus on the 
American sports fan.”  Also during the scripted portion of the Q1 2020 Earnings Call, Defendant 
Park stated, in relevant part: 
Starting with Old DraftKings, despite COVID we generated $89 million of net 
revenue in the quarter, which is an increase of 30% versus prior year. Notably pre-
COVID prior to March 11, our revenue was up 60% versus prior year. These results 
are due to our strategy of launching in new states, as well as growing revenue in 
existing states. In this quarter, we were live in five new states for online sports 
betting, versus the first quarter of 2019, Indiana, Iowa, New Hampshire, 
Pennsylvania, and West Virginia. 
 
 
 
 
 
 
*** 
 
Now turning to SBTech. Old SBTech revenue generated €22.6 million, an increase 
of 3% versus Q1 2019. Notably, pre-COVID, prior to March 11, our revenue was 
up 19% versus prior year. 
 
Adjusted EBITDA was negative €851,000 versus prior year of positive €4.3 
million. SBTech was well on track to achieve positive EBITDA for the quarter, 
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until COVID hit. And we anticipate to return to profitability once the major sports 
resume. 
 
35. 
On June 22, 2020, DraftKings filed a Prospectus on Form 424B4 with the SEC (the 
“June 22, 2020 Prospectus”).  The June 22, 2020 Prospectus contained substantively similar 
statements as those included in the April 27, 2020 Prospectus, referenced, supra, in ¶¶ 29-31. 
36. 
On August 14, 2020, DraftKings issued a press release entitled, “DraftKings 
Reports Strong Q2 Revenue Despite Limited Sports Calendar.”  The press release stated, in 
relevant part: 
DraftKings [. . .] today reported financial results for the second quarter of 2020. For 
the three months ended June 30, 2020, DraftKings reported GAAP revenue of $71 
million compared to $57 million during the same period in 2019. On a pro forma 
basis, including the effect of the Company’s business combination with SBTech 
(Global) Limited and Diamond Eagle Acquisition Corp. as if it had been completed 
on January 1, 2019, revenue would have been $75 million in the second quarter of 
2020, compared to $83 million during the same period in 2019. DraftKings ended 
the second quarter of 2020 with over $1.2 billion in cash and no debt on its balance 
sheet. 
 
“We believe that the best product will ultimately win with the American consumer,” 
said Jason Robins, DraftKings Co-Founder, CEO and Chairman of the Board. “As 
a technology first organization, we will continue to focus on bringing new and 
innovative products to market that strengthen our engagement with customers and 
maintain our competitive differentiation.” 
 
37. 
That same day, DraftKings hosted an earnings call with investors and analysts to 
discuss the Company’s Q2 2020 results (the “Q2 2020 Earnings Call”).  During the scripted portion 
of the Q2 2020 Earnings Call, Defendant Robins stated, in relevant part: 
We had a strong second quarter given the limited sports calendar with second 
quarter pro forma revenue of $75 million. As sports have started to return, we saw 
revenue improve sequentially each month in the quarter, with June revenue 
increasing 20% year-over-year on a pro forma basis. This strong overall results and 
improvement are due to our product innovation, our entry into new jurisdiction, and 
pent-up demand for sports betting as Live Sports like Golf, European Soccer, 
NASCAR and UFC started to return. 
 
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38. 
On October 8, 2020, DraftKings filed a Prospectus on Form 424B4 with the SEC 
(the “October 8, 2020 Prospectus”).  The October 8, 2020 Prospectus contained substantively 
similar statements as those included in the April 27, 2020 Prospectus, referenced, supra, in ¶¶ 29-
31. 
39. 
On November 13, 2020, DraftKings issued a press release reporting the Company’s 
Q3 2020 results and raising its 2020 revenue guidance.  The press release stated, in relevant part: 
DraftKings [. . .] today reported its financial results for the third quarter of 2020. 
For the three months ended September 30, 2020, DraftKings reported revenue of 
$133 million, an increase of 98% compared to $67 million during the same period 
in 2019. After giving pro forma effect to the business combination with SBTech 
(Global) Limited and Diamond Eagle Acquisition Corp., as if it had occurred on 
January 1, 2019, revenue grew 42% compared to the three months ended September 
30, 2019. 
 
“The resumption of major sports such as the NBA, MLB and the NHL in the third 
quarter, as well as the start of the NFL season, generated tremendous customer 
engagement,” said Jason Robins, DraftKings’ co-founder, CEO and Chairman of 
the Board. “In addition to our year-over-year pro forma revenue growth of 42%, 
DraftKings recorded an increase in monthly unique payers of 64% to over 1 million, 
demonstrating the effectiveness of our data-driven sales and marketing approach. 
Our product offerings and scalable platform provide a distinctive and personalized 
experience for customers across the ten states where we operate mobile sports 
betting today, and we look forward to entering additional jurisdictions at the earliest 
opportunity.” 
 
40. 
That same day, DraftKings hosted an earnings call with investors and analysts to 
discuss the Company’s Q3 2020 results (the “Q3 2020 Earnings Call”).  During the scripted portion 
of the Q3 2020 Earnings Call, Defendant Robins stated, in relevant part: 
DraftKings had a very productive third quarter on a number of different fronts. 
First, our Q3 performance confirms what we foreshadowed on our previous 
earnings call. The return on major sports has generated tremendous customer 
engagement. Third quarter revenue of $133 million was at the high end of the range 
we outlined in our recent S-1 and grew 42% year-over-year. In Q3, we also had 
more than 1 million monthly unique payers, which means the average for the month 
of July, August and September was greater than 1 million. 
 
 
 
 
 
 
*** 
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We continue to be very excited with the products and technology investments we're 
making as well as with our progress on the technology migration and business 
integration of SBTech. 
 
 
 
 
 
 
*** 
 
As a reminder, with the acquisition of SBTech, we now have almost 1,100 
engineers worldwide dedicated to creating best-in-class technology and games and 
experiences for our users. 
 
41. 
On February 26, 2021, DraftKings filed an Annual Report on Form 10-K with the 
SEC, reporting the Company’s financial and operating results for the quarter and year ended 
December 31, 2020 (the “2020 10-K”).  The 2020 10-K also touted SBTech’s business, stating, 
inter alia: 
B2B Business Marketing - Our core B2B marketing strategy is centered around 
attending and exhibiting at major trade shows around the world. SBTech’s trade 
show marketing is supplemented with digital and offline marketing campaigns in 
leading industry publications, websites, regular media pieces and participation on 
industry panels. SBTech’s reputation and customer testimonials also assist in its 
marketing and business efforts. 
 
(Emphasis in original). 
 
42. 
Further, the 2020 10-K touted the Company’s compliance program, stating, in 
relevant part: 
We have developed and implemented an internal compliance program to help 
ensure that we comply with legal and regulatory requirements imposed on us in 
connection with our DFS, Sportsbook and iGaming activities. Our compliance 
program focuses on, among other things, reducing and managing problematic 
gaming and providing tools to assist users in making educated choices related to 
gaming activities. 
 
SBTech offerings have been built from the ground up to meet the needs of differing 
regulatory regimes, including configurable regulatory and responsible gaming 
controls such as responsible gaming tests, operator alerts on player behavior, 
deposit limits, betting limits, loss limits, timeout facilities, session limits, reality 
checks, balance thresholds and intended gaming amounts. These features allow the 
operators’ customers full control of their gaming to allow them to play responsibly. 
 
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43. 
Appended to the 2020 10-K as exhibits were signed certifications pursuant to the 
Sarbanes-Oxley Act of 2002 by Defendants Robins and Park, attesting that “[t]he information 
contained in the [2020 10-K] fairly presents, in all material respects, the financial condition and 
results of operations of the Company.” 
44. 
Corresponding with the 2020 10-K, DraftKings issued a press release announcing 
the Company’s fourth quarter and full year 2020 results and raising its 2021 revenue guidance.  
The press release stated, in relevant part: 
For the three months ended December 31, 2020, DraftKings reported revenue of 
$322 million, an increase of 146% compared to $131 million during the same 
period in 2019. After giving pro forma effect to the business combination with 
SBTech (Global) Limited (“SBTech”) and Diamond Eagle Acquisition Corp. 
which was completed on April 23, 2020, as if it had occurred on January 1, 2019, 
revenue grew 98% compared to the three months ended December 31, 2019. 
 
“With a favorable fourth quarter sports calendar and strong marketing execution, 
DraftKings was able to generate tremendous customer acquisition and engagement 
that propelled us to $322 million in fourth quarter revenue, a 98% year over year 
increase,” said Jason Robins, DraftKings’ co-founder, CEO and Chairman of the 
Board. “In the fourth quarter of 2020, we saw MUPs increase 44% to 1.5 million 
and ARPMUP increase 55% to $65. We are raising our revenue outlook for 2021 
due to our expectation for continued growth, the outperformance of our core 
business and newly launched states that were not included in our previous 
guidance.” 
 
45. 
That same day, DraftKings hosted an earnings call with investors and analysts to 
discuss the Company’s Q4 2020 results (the “Q4 2020 Earnings Call”).  During the scripted portion 
of the Q4 2020 Earnings Call, Defendant Robins stated, in relevant part: 
Our list of accomplishments in 2020 is impressive. We completed the business 
combination with SBTech and became a publicly traded company in April. We are 
well on our way to completing the integration of the two companies from a team 
organization and business standpoint, and are progressing with the migration to our 
own in-house sports betting engine, which we expect will be complete by the end 
of the third quarter in 2021. 
 
 
 
 
 
 
*** 
 
Case 1:21-cv-05739-PAE   Document 1   Filed 07/02/21   Page 15 of 34

 
16 
We exceeded our expectations in 2020. Pro forma revenue grew nearly 50% to $644 
million versus $432 million last year. Both MUPs and ARPMUP grew 29% in 
2020. We had a strong close to the year with Q4 revenue growing almost 100% 
year-over-year, and MUPs and ARPMUP growing 44% and 55%, respectively, in 
the quarter. 
 
Revenue for the year was almost $95 million higher than the midpoint of our 
guidance. These results were due to overperformance in our core business as well 
as multiple assumptions on external factors that broke our way, such as the sports 
calendar, the extension of mobile registration, Illinois and better-than-expected 
whole percentage in online sports book. 
 
46. 
On May 7, 2021, DraftKings issued a press release announcing the Company’s Q1 
2021 results and raising its 2021 revenue guidance.  The press release stated, in relevant part: 
For the three months ended March 31, 2021, DraftKings reported revenue of $312 
million, an increase of 253% compared to $89 million during the same period in 
2020. After giving pro forma effect to the business combination with SBTech 
(Global) Limited (“SBTech”) and Diamond Eagle Acquisition Corp. which was 
completed on April 23, 2020, as if it had occurred on January 1, 2019, revenue grew 
175% compared to the three months ended March 31, 2020. 
 
“DraftKings is off to an outstanding start in 2021,” said Jason Robins, DraftKings’ 
co-founder, CEO and Chairman of the Board. “We continued to make progress and 
remain on track with the migration to our own in-house proprietary sports betting 
engine, strengthened our content and technology capabilities with the acquisitions 
of VSiN and BlueRibbon Software, and invested in further differentiating our 
product offering with the upcoming rollout of social functionality in our DFS and 
mobile Sportsbook apps.” 
 
Jason Park, DraftKings’ Chief Financial Officer, added, “Our $312 million in first 
quarter revenue, 114% increase in MUPs and 48% growth in ARPMUP reflect solid 
customer acquisition and retention as well as successful launches of mobile sports 
betting and iGaming in new states. We are raising our revenue outlook for 2021 
due to the outperformance of our core business in the first quarter and our 
expectation for continued healthy growth.” 
 
47. 
That same day, DraftKings hosted an earnings call with investors and analysts to 
discuss the Company’s Q1 2021 results (the “Q1 2021 Earnings Call”).  During the scripted portion 
of the Q1 2021 Earnings Call, Defendant Robins stated, in relevant part: 
DraftKings is off to an outstanding start in 2021. Revenue for the first quarter 
increased 175% year-over-year to 312 million on a pro forma basis. MUPs grew 
Case 1:21-cv-05739-PAE   Document 1   Filed 07/02/21   Page 16 of 34

 
17 
114% and ARPMUP grew 48%. These results reflect continued over performance 
of our core business due to strong customer acquisition and retention as well as the 
successful launches of mobile sports betting and iGaming in Michigan and mobile 
sports betting in Virginia. 
 
48. 
The statements referenced in ¶¶ 23-47 were materially false and misleading because 
Defendants made false and/or misleading statements, as well as failed to disclose material adverse 
facts about the Company’s business, operations, and compliance policies.  Specifically, 
Defendants made false and/or misleading statements and/or failed to disclose that: (i) SBTech had 
a history of unlawful operations; (ii) accordingly, DraftKings’ merger with SBTech exposed the 
Company to dealings in black-market gaming; (iii) the foregoing increased the Company’s 
regulatory and criminal risks with respect to these transactions; (iv) as a result of all the foregoing, 
the Company’s revenues were derived, in part, from unlawful conduct and thus unsustainable; (v) 
accordingly, the benefits of the Business Combination were overstated; and (vi) as a result, the 
Company’s public statements were materially false and misleading at all relevant times. 
The Truth Emerges 
49. 
On June 15, 2021, Hindenburg published a report entitled, “DraftKings: A $21 
Billion SPAC Betting It Can Hide Its Black Market Operations.”  The report alleged that the 
Company’s merger with SBTech exposed DraftKings to dealings in black-market 
gaming.  Specifically, the report stated, in relevant part: 
• SBTech accounted for ~25% of total revenue at the SPAC consummation 
and was the only positive contributor to operating income, providing both 
financial stability and technology to the deal. 
 
• Unbeknownst to investors, DraftKings’ merger with SBTech also brings 
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 
Case 1:21-cv-05739-PAE   Document 1   Filed 07/02/21   Page 17 of 34

 
18 
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. 
 
*** 
 
• We identified numerous black market clients of DraftKings’ “front” entity, 
through searches on social media and back-end web infrastructure. 
 
*** 
 
• DraftKings trades at a ~26x last twelve months (LTM) sales multiple and a 
~20x estimated 2021 sales multiple despite (i) no expectation of earnings 
for years, (ii) intense competition, and (iii) regulatory risk. The company 
posted net losses of $844 million in 2020 and $346 million last quarter. 
 
• Insiders have dumped over $1.4 billion in stock since the company went 
public a little over a year ago, with SBTech’s founder leading the pack, 
having personally sold ~$568 million in shares. 
 
*** 
 
• We think DraftKings has systematically skirted the law and taken elaborate 
steps to obfuscate its black market operations. These violations appear to be 
continuing to this day, all while insiders aggressively cash out amidst the 
market froth. 
 
50. 
The Hindenburg report explained that SBTech entered into Asian black markets in 
2014.  Indeed, the report stated, in relevant part: 
According to former employees, SBTech’s offering struggled to compete against 
competitors like Kambi, which had a robust team dedicated to analyzing and setting 
“in-game” betting odds and had more powerful technology. The competition 
pushed SBTech to seek business in markets where others were unwilling to operate, 
we were told. 
 
Despite the illegality of sports gambling in major Asian markets, SBTech’s own 
marketing materials suggest it had an expansive Asia-facing business at least as far 
back as 2014. SBTech’s website at the time advertised a “powerful turnkey Asian 
system” that accepted payment in currencies where gambling was clearly illegal. 
 
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19 
 
 
 
 
 
*** 
 
Specifically, according to the graphic on its website, SBTech accepted Vietnamese 
Dong and Indonesian Rupees – both currencies based in black market sports 
gambling jurisdictions. 
 
51. 
The Hindenburg report continued to explain that the owner of SBTech spun out 
certain of his gambling operations to set up a front entity to mask SBTech’s involvement in black 
and unregulated markets.  The report stated: 
According to a former business partner of SBTech, the prospect of doing business 
in the U.S. was the trigger for SBTech owner Shalom Meckenzie to spin out certain 
of his gambling operations to at least two separate entities. The entities were placed 
under the control of relatives or trusted confidantes and run by many of the same 
staff. 
 
Shortly after the Supreme Court hearing, on March 19, 2018, SBTech announced 
that Tom Light, the SVP of business development, was leaving to create a “new 
blockchain and gambling venture”. 
 
 
 
 
 
 
*** 
 
The venture was unnamed in the press release, but Maltese and Bulgarian corporate 
records show that Light began creating an entity called BTi days later. [1,2,3] It 
was later renamed CoreTech. 
 
One former employee who served in a product development role told us 
BTi/CoreTech was a “front” for SBTech’s illegal or unregulated markets: 
 
“Before 
SBTech 
joined 
with 
DraftKings, 
they 
split 
the 
grey 
market/unregulated…they [Bti] are a separate company marketing their 
white label solution to Middle East, South America, mostly China and 
Malaysia. Their technology provider is SBTech. Because SBTech is now on 
NASDAQ they don’t want Asia or the grey market to give it a bad influence. 
They want to be clean.” 
 
The same former employee told us that BTi/CoreTech acted as a customer of 
SBTech, which invoiced BTi/CoreTech, in an apparent effort to put a layer of legal 
separation between SBTech and its black market end customers. 
 
A second former employee, who worked as a data specialist at SBTech for several 
years, described BTi/CoreTech similarly. When asked how much of 
BTi/CoreTech’s revenue comes from black or grey markets he said: 
 
Case 1:21-cv-05739-PAE   Document 1   Filed 07/02/21   Page 19 of 34

 
20 
“I would say almost all of it. Well over 90%” 
 
Despite the small legal market in Asia, DraftKings states in its SEC filings that an 
unnamed customer focused on Asian markets accounted for 46% of SBTech’s 
2019 revenue and 52% of SBTech’s 2020 revenue, but failed to disclose the name 
of the customer.[1] [Pg. 39, Pg. 40] 
 
When asked about this, the former employee speculated “…if it’s Asia it will have 
to be (BTi)…it must be through BTi”. To be clear, SBTech has several Asia-
facing customers and “resellers” such as 10Bet, W88, and Gameplay, as we detail 
further. The opacity of DraftKings’ customer relationship disclosures has thus far 
masked the names of its top customers. 
 
The implication either way is that black and unregulated market revenue and 
profitability, which includes BTi/CoreTech, represented and still represents a major 
portion of SBTech’s financials since DraftKings went public. 
 
The former employee added that the new focus on adding blockchain to the 
gambling offering was because operators in black markets had requested 
cryptocurrency options to make moving money easier. Crypto has emerged as the 
medium of choice for illicit money transfers, given the lack of oversight. 
 
BTi/CoreTech was set up across town from SBTech’s office in Sofia, Bulgaria, 4.5 
miles (7.2 km) away, per Bulgarian corporate records. 
 
(Emphasis in original.) 
52. 
Further, the Hindenburg report explained that, despite SBTech’s claims it was 
separate from BTi/CoreTech, multiple employees and customers described BTi/CoreTech as either 
an affiliate or subsidiary of SBTech, or used the name BTi interchangeably with SBTech.  For 
example, the Hindenburg report stated: 
Despite the ostensible separation, many employees seemed to be under the 
impression that they worked for SBTech. 
 
This includes BTi/CoreTech’s current CEO, Amir Vaknin (who, according to his 
LinkedIn, never worked for SBTech). Nonetheless, he announced he was searching 
to hire employees for SBTech around the time that BTi/CoreTech was formed. 
 
(Emphasis in original.) 
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21 
53. 
The Hindenburg report indicated that Hindenburg was able to corroborate accounts 
by former employees who claimed that “the renaming and re-branding of parts of SBTech to BTi 
to CoreTech – was an effort to separate the entity’s ‘behind the scenes’ black market operations to 
pave the way for a U.S. deal partner like DraftKings’, with its polished and clean exterior.”  
Specifically, the Hindenburg report provided a number of corroborating examples: 
Example 1: BTi’s Sportsbook Is Advertised Through a Site Linked To A Recent 
Raid on An Alleged Illegal Operator in Thailand 
 
 
 
 
 
 
*** 
 
Example 2: 12Bet, A Site Tied To Triads And At The Center Of A Swiss Money 
Laundering Investigation, Advertises Its Use of BTi’s Technology 
 
 
 
 
 
 
*** 
 
Example 3: Gaming Site Fun88, Linked To An Illegal Gaming Raid In Vietnam, 
Also Advertises Its Use of BTi’s Platform 
 
 
 
 
 
 
*** 
 
Example 4: SBTech Claimed to Oregon Regulators That Its Customer 10Bet Did 
Not Derive Revenue From China (A Major Black Market) Using SBTech’s 
Software 
 
We Found Multiple Chinese-Facing 10Bet Sites Where Backend Web 
Infrastructure Demonstrates SBTech’s Involvement 
 
 
 
 
 
 
*** 
 
Example 4 (Cont’d): 10bet, A Sports Betting Firm With Apparent Ongoing 
Operations in China, Was Launched By SBTech Founder Shalom Meckenzie 
 
In Mid-2018, Meckenzie Stepped Down From 10Bet And Transferred His Shares 
to His Brother To (Once Again) Obfuscate The Connection 
 
DraftKings Continues to Do Business With the Entity, Per Its SEC Filings 
 
 
 
 
 
 
*** 
 
Example 5: SBTech Operated in Iran For Years, According to Multiple Former 
Employees, Contrary to Its Representations to Oregon State Regulators 
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22 
 
54. 
In its conclusion, the Hindenburg report further elaborated on SBTech’s unlawful 
activity, stating, in relevant part: 
One issue with partnering with black market betting operators is that such 
businesses are not just engaged in illegal betting. These operators almost by 
definition are engaged in money laundering, and often additional lines of 
underground business activity. 
 
As one former employee told us succinctly, SBTech founder Meckenzie and his 
affiliate entities have “sold to plenty of mobs”. 
 
The same former employee explained that DraftKings and its SPAC sponsors must 
have either known the issues with SBTech’s black market operations or were 
grossly negligent in their diligence: 
 
“I would be really, really, really surprised if they didn’t know. In fact, it 
would be really, really amateur of them if they didn’t investigate that. 
Presumably they knew and…helped facilitate hiding it or turned a blind eye 
to it… but they must have known.” 
 
DraftKings has never identified the nature of its BTi/CoreTech relationship in any 
of its SEC filings – not as an affiliate or subsidiary of SBTech or in any other way 
as relevant to DraftKings’ SPAC combination with SBTech. It also has not 
provided transparency regarding the markets SBTech and its other “resellers” and 
affiliates operate in, and their respective contributions to the public company. 
 
Given the importance of SBTech to DraftKings’ top and bottom-line, it is virtually 
impossible to fathom that DraftKings was and continues to remain unaware of its 
ongoing relationship with BTi/CoreTech and its illicit operators. 
 
Yet rather than disclose anything about these relationships, the company instead 
appears to have created a complex web of misinformation to conceal them. 
 
(Emphasis in original.) 
55. 
Following publication of the Hindenburg report, DraftKings’ stock price fell $2.11 
per share, or 4.17%, to close at $48.51 per share on June 15, 2021. 
56. 
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline 
in the market value of the Company’s securities, Plaintiff and other Class members have suffered 
significant losses and damages. 
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23 
PLAINTIFF’S CLASS ACTION ALLEGATIONS 
57. 
Plaintiff brings this action as a class action pursuant to Federal Rule of Civil 
Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or otherwise 
acquired DraftKings securities during the Class Period (the “Class”); and were damaged upon the 
revelation of the alleged corrective disclosures.  Excluded from the Class are Defendants herein, 
the officers and directors of the Company, at all relevant times, members of their immediate 
families and their legal representatives, heirs, successors or assigns and any entity in which 
Defendants have or had a controlling interest. 
58. 
The members of the Class are so numerous that joinder of all members is 
impracticable.  Throughout the Class Period, DraftKings securities were actively traded on the 
NASDAQ.  While the exact number of Class members is unknown to Plaintiff at this time and can 
be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds or 
thousands of members in the proposed Class.  Record owners and other members of the Class may 
be identified from records maintained by DraftKings or its transfer agent and may be notified of 
the pendency of this action by mail, using the form of notice similar to that customarily used in 
securities class actions. 
59. 
Plaintiff’s claims are typical of the claims of the members of the Class as all 
members of the Class are similarly affected by Defendants’ wrongful conduct in violation of 
federal law that is complained of herein. 
60. 
Plaintiff will fairly and adequately protect the interests of the members of the Class 
and has retained counsel competent and experienced in class and securities litigation.  Plaintiff has 
no interests antagonistic to or in conflict with those of the Class. 
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24 
61. 
Common questions of law and fact exist as to all members of the Class and 
predominate over any questions solely affecting individual members of the Class.  Among the 
questions of law and fact common to the Class are:   
• 
whether the federal securities laws were violated by Defendants’ acts as alleged 
herein; 
 
• 
whether statements made by Defendants to the investing public during the Class 
Period misrepresented material facts about the business, operations and 
management of DraftKings; 
 
• 
whether the Individual Defendants caused DraftKings to issue false and 
misleading financial statements during the Class Period; 
 
• 
whether Defendants acted knowingly or recklessly in issuing false and misleading 
financial statements; 
 
• 
whether the prices of DraftKings securities during the Class Period were 
artificially inflated because of the Defendants’ conduct complained of herein; and 
 
• 
whether the members of the Class have sustained damages and, if so, what is the 
proper measure of damages. 
 
62. 
A class action is superior to all other available methods for the fair and efficient 
adjudication of this controversy since joinder of all members is impracticable.  Furthermore, as the 
damages suffered by individual Class members may be relatively small, the expense and burden 
of individual litigation make it impossible for members of the Class to individually redress the 
wrongs done to them.  There will be no difficulty in the management of this action as a class action. 
63. 
Plaintiff will rely, in part, upon the presumption of reliance established by the fraud-
on-the-market doctrine in that: 
• 
Defendants made public misrepresentations or failed to disclose material facts 
during the Class Period; 
• 
the omissions and misrepresentations were material; 
• 
DraftKings securities are traded in an efficient market; 
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25 
• 
the Company’s shares were liquid and traded with moderate to heavy volume 
during the Class Period; 
• 
the Company traded on the NASDAQ and was covered by multiple analysts; 
• 
the misrepresentations and omissions alleged would tend to induce a reasonable 
investor to misjudge the value of the Company’s securities; and 
• 
Plaintiff and members of the Class purchased, acquired and/or sold DraftKings 
securities between the time the Defendants failed to disclose or misrepresented 
material facts and the time the true facts were disclosed, without knowledge of 
the omitted or misrepresented facts. 
64. 
Based upon the foregoing, Plaintiff and the members of the Class are entitled to a 
presumption of reliance upon the integrity of the market.  
65. 
Alternatively, Plaintiff and the members of the Class are entitled to the presumption 
of reliance established by the Supreme Court in Affiliated Ute Citizens of the State of Utah v. 
United States, 406 U.S. 128, 92 S. Ct. 2430 (1972), as Defendants omitted material information in 
their Class Period statements in violation of a duty to disclose such information, as detailed above. 
COUNT I 
 (Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Promulgated Thereunder 
Against All Defendants) 
 
66. 
Plaintiff repeats and re-alleges each and every allegation contained above as if fully 
set forth herein. 
67. 
This Count is asserted against Defendants and is based upon Section 10(b) of the 
Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC. 
68. 
During the Class Period, Defendants engaged in a plan, scheme, conspiracy and 
course of conduct, pursuant to which they knowingly or recklessly engaged in acts, transactions, 
practices and courses of business which operated as a fraud and deceit upon Plaintiff and the other 
members of the Class; made various untrue statements of material facts and omitted to state 
material facts necessary in order to make the statements made, in light of the circumstances under 
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26 
which they were made, not misleading; and employed devices, schemes and artifices to defraud in 
connection with the purchase and sale of securities.  Such scheme was intended to, and, throughout 
the Class Period, did:  (i) deceive the investing public, including Plaintiff and other Class members, 
as alleged herein; (ii) artificially inflate and maintain the market price of DraftKings securities; 
and (iii) cause Plaintiff and other members of the Class to purchase or otherwise acquire 
DraftKings securities and options at artificially inflated prices.  In furtherance of this unlawful 
scheme, plan and course of conduct, Defendants, and each of them, took the actions set forth 
herein. 
69. 
Pursuant to the above plan, scheme, conspiracy and course of conduct, each of the 
Defendants participated directly or indirectly in the preparation and/or issuance of the quarterly 
and annual reports, SEC filings, press releases and other statements and documents described 
above, including statements made to securities analysts and the media that were designed to 
influence the market for DraftKings securities.  Such reports, filings, releases and statements were 
materially false and misleading in that they failed to disclose material adverse information and 
misrepresented the truth about DraftKings’ finances and business prospects. 
70. 
  By virtue of their positions at DraftKings, Defendants had actual knowledge of 
the materially false and misleading statements and material omissions alleged herein and intended 
thereby to deceive Plaintiff and the other members of the Class, or, in the alternative, Defendants 
acted with reckless disregard for the truth in that they failed or refused to ascertain and disclose 
such facts as would reveal the materially false and misleading nature of the statements made, 
although such facts were readily available to Defendants.  Said acts and omissions of Defendants 
were committed willfully or with reckless disregard for the truth.  In addition, each Defendant 
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27 
knew or recklessly disregarded that material facts were being misrepresented or omitted as 
described above. 
71. 
Information showing that Defendants acted knowingly or with reckless disregard 
for the truth is peculiarly within Defendants’ knowledge and control.  As the senior managers 
and/or directors of DraftKings, the Individual Defendants had knowledge of the details of 
DraftKings’ internal affairs. 
72. 
The Individual Defendants are liable both directly and indirectly for the wrongs 
complained of herein.  Because of their positions of control and authority, the Individual 
Defendants were able to and did, directly or indirectly, control the content of the statements of 
DraftKings.  As officers and/or directors of a publicly-held company, the Individual Defendants 
had a duty to disseminate timely, accurate, and truthful information with respect to DraftKings’ 
businesses, operations, future financial condition and future prospects.  As a result of the 
dissemination of the aforementioned false and misleading reports, releases and public statements, 
the market price of DraftKings securities was artificially inflated throughout the Class Period.  In 
ignorance of the adverse facts concerning DraftKings’ business and financial condition which were 
concealed by Defendants, Plaintiff and the other members of the Class purchased or otherwise 
acquired DraftKings securities at artificially inflated prices and relied upon the price of the 
securities, the integrity of the market for the securities and/or upon statements disseminated by 
Defendants, and were damaged thereby. 
73. 
During the Class Period, DraftKings securities were traded on an active and 
efficient market.  Plaintiff and the other members of the Class, relying on the materially false and 
misleading statements described herein, which the Defendants made, issued or caused to be 
disseminated, or relying upon the integrity of the market, purchased or otherwise acquired shares 
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28 
of DraftKings securities at prices artificially inflated by Defendants’ wrongful conduct.  Had 
Plaintiff and the other members of the Class known the truth, they would not have purchased or 
otherwise acquired said securities, or would not have purchased or otherwise acquired them at the 
inflated prices that were paid.  At the time of the purchases and/or acquisitions by Plaintiff and the 
Class, the true value of DraftKings securities was substantially lower than the prices paid by 
Plaintiff and the other members of the Class.  The market price of DraftKings securities declined 
sharply upon public disclosure of the facts alleged herein to the injury of Plaintiff and Class 
members. 
74. 
By reason of the conduct alleged herein, Defendants knowingly or recklessly, 
directly or indirectly, have violated Section 10(b) of the Exchange Act and Rule 10b-5 
promulgated thereunder. 
75. 
As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and the 
other members of the Class suffered damages in connection with their respective purchases, 
acquisitions and sales of the Company’s securities during the Class Period, upon the disclosure 
that the Company had been disseminating misrepresented financial statements to the investing 
public. 
COUNT II 
 (Violations of Section 20(a) of the Exchange Act Against the Individual Defendants) 
 
76. 
Plaintiff repeats and re-alleges each and every allegation contained in the foregoing 
paragraphs as if fully set forth herein. 
77. 
During the Class Period, the Individual Defendants participated in the operation 
and management of DraftKings, and conducted and participated, directly and indirectly, in the 
conduct of DraftKings’ business affairs.  Because of their senior positions, they knew the adverse 
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29 
non-public information about DraftKings’ misstatement of income and expenses and false 
financial statements. 
78. 
As officers and/or directors of a publicly owned company, the Individual 
Defendants had a duty to disseminate accurate and truthful information with respect to DraftKings’ 
financial condition and results of operations, and to correct promptly any public statements issued 
by DraftKings which had become materially false or misleading. 
79. 
Because of their positions of control and authority as senior officers, the Individual 
Defendants were able to, and did, control the contents of the various reports, press releases and 
public filings which DraftKings disseminated in the marketplace during the Class Period 
concerning DraftKings’ results of operations.  Throughout the Class Period, the Individual 
Defendants exercised their power and authority to cause DraftKings to engage in the wrongful acts 
complained of herein. The Individual Defendants, therefore, were “controlling persons” of 
DraftKings within the meaning of Section 20(a) of the Exchange Act.  In this capacity, they 
participated in the unlawful conduct alleged which artificially inflated the market price of 
DraftKings securities. 
80. 
Each of the Individual Defendants, therefore, acted as a controlling person of 
DraftKings.  By reason of their senior management positions and/or being directors of DraftKings, 
each of the Individual Defendants had the power to direct the actions of, and exercised the same 
to cause, DraftKings to engage in the unlawful acts and conduct complained of herein.  Each of 
the Individual Defendants exercised control over the general operations of DraftKings and 
possessed the power to control the specific activities which comprise the primary violations about 
which Plaintiff and the other members of the Class complain. 
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30 
81. 
By reason of the above conduct, the Individual Defendants are liable pursuant to 
Section 20(a) of the Exchange Act for the violations committed by DraftKings. 
PRAYER FOR RELIEF 
WHEREFORE, Plaintiff demands judgment against Defendants as follows: 
 
A. 
Determining that the instant action may be maintained as a class action under Rule 
23 of the Federal Rules of Civil Procedure, and certifying Plaintiff as the Class representative;  
B. 
Requiring Defendants to pay damages sustained by Plaintiff and the Class by reason 
of the acts and transactions alleged herein; 
C. 
Awarding Plaintiff and the other members of the Class prejudgment and post-
judgment interest, as well as their reasonable attorneys’ fees, expert fees and other costs; and 
D. 
Awarding such other and further relief as this Court may deem just and proper. 
DEMAND FOR TRIAL BY JURY 
 
Plaintiff hereby demands a trial by jury. 
Dated:  July 2, 2021 
Respectfully submitted, 
POMERANTZ LLP 
/s/ Jeremy A. Lieberman 
Jeremy A. Lieberman 
J. Alexander Hood II 
Thomas H. Przybylowski 
600 Third Avenue  
New York, New York 10016  
Telephone: (212) 661-1100  
Facsimile: (212) 661-8665  
jalieberman@pomlaw.com  
ahood@pomlaw.com 
tprzybylowski@pomlaw.com 
 
Attorneys for Plaintiff 
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DraftKings Inc. (DKNG)
Rodriguez, Kent J.
Transaction
Number of
Price Per
Type
Date
Shares/Unit
Share/Unit
Purchase
4/12/2021
100
$58.1700
Purchase
4/13/2021
50
$58.9100
Purchase
4/13/2021
50
$58.8500
Purchase
4/13/2021
50
$58.8300
Purchase
4/13/2021
50
$58.9400
Purchase
4/13/2021
50
$59.0500
Purchase
4/13/2021
100
$58.8800
Purchase
4/14/2021
50
$60.4200
Purchase
4/14/2021
50
$60.2100
Purchase
4/14/2021
50
$59.6700
Purchase
4/14/2021
50
$59.6500
Purchase
4/14/2021
100
$59.7500
Purchase
4/14/2021
100
$60.0500
Purchase
4/14/2021
100
$59.9493
Purchase
4/16/2021
50
$58.0600
Purchase
4/16/2021
50
$58.1500
Purchase
4/16/2021
50
$58.0999
Purchase
4/16/2021
50
$57.9799
Purchase
4/16/2021
50
$57.9700
Purchase
4/16/2021
50
$57.9897
Purchase
4/16/2021
50
$58.1500
Purchase
4/16/2021
50
$58.1500
Purchase
4/16/2021
50
$58.1200
Purchase
4/16/2021
100
$58.3500
Purchase
4/16/2021
100
$58.2900
Purchase
4/19/2021
50
$56.0500
Purchase
4/19/2021
50
$56.2500
Purchase
4/19/2021
50
$56.4800
Purchase
4/19/2021
50
$56.5600
Purchase
4/19/2021
100
$56.0390
Purchase
4/19/2021
100
$55.7630
Purchase
4/19/2021
100
$55.9800
Purchase
4/20/2021
100
$55.6800
Purchase
4/21/2021
50
$55.3900
Purchase
4/22/2021
6
$57.2450
Purchase
4/22/2021
44
$57.2500
Purchase
4/23/2021
50
$57.9800
Purchase
4/23/2021
50
$57.7799
Purchase
4/23/2021
50
$57.9799
Purchase
4/23/2021
50
$57.9000
Purchase
4/23/2021
50
$57.9999
Purchase
4/23/2021
100
$57.8879
Purchase
4/28/2021
100
$58.5300
Purchase
4/29/2021
50
$58.5499
Purchase
4/29/2021
50
$56.8699
Purchase
5/3/2021
50
$57.4499
Purchase
5/3/2021
50
$57.2100
Purchase
5/3/2021
25
$57.4500
Purchase
5/3/2021
25
$57.2600
Purchase
5/3/2021
25
$56.8500
Purchase
5/6/2021
25
$54.7300
List of Purchases and Sales
Page 1 of 2
Case 1:21-cv-05739-PAE   Document 1   Filed 07/02/21   Page 33 of 34

DraftKings Inc. (DKNG)
Rodriguez, Kent J.
Transaction
Number of
Price Per
Type
Date
Shares/Unit
Share/Unit
List of Purchases and Sales
Purchase
5/6/2021
50
$52.6900
Purchase
6/9/2021
50
$54.9000
Purchase
6/9/2021
50
$55.2000
Purchase
6/10/2021
50
$54.6500
Sale
4/13/2021
(100)
$58.6600
Sale
4/13/2021
(100)
$59.0659
Sale
4/13/2021
(50)
$59.1700
Sale
4/13/2021
(50)
$58.9600
Sale
4/13/2021
(50)
$58.8867
Sale
4/13/2021
(50)
$59.0601
Sale
4/14/2021
(100)
$60.0001
Sale
4/14/2021
(100)
$60.2601
Sale
4/14/2021
(100)
$60.0701
Sale
4/14/2021
(50)
$59.9900
Sale
4/14/2021
(50)
$60.4600
Sale
4/14/2021
(50)
$59.8200
Sale
4/15/2021
(100)
$60.2000
Sale
4/16/2021
(100)
$58.6930
Sale
4/16/2021
(100)
$58.3901
Sale
4/16/2021
(50)
$58.1390
Sale
4/16/2021
(50)
$58.2750
Sale
4/16/2021
(50)
$58.1401
Sale
4/16/2021
(50)
$58.0601
Sale
4/16/2021
(50)
$58.0100
Sale
4/16/2021
(50)
$58.1216
Sale
4/16/2021
(50)
$58.2250
Sale
4/16/2021
(50)
$58.1850
Sale
4/19/2021
(100)
$56.1001
Sale
4/19/2021
(100)
$55.9166
Sale
4/19/2021
(100)
$56.0121
Sale
4/19/2021
(50)
$58.2810
Sale
4/19/2021
(50)
$56.1650
Sale
4/19/2021
(50)
$56.3315
Sale
4/19/2021
(50)
$56.5750
Sale
4/20/2021
(100)
$55.7001
Sale
4/20/2021
(50)
$56.8400
Sale
4/21/2021
(50)
$55.4411
Sale
4/22/2021
(50)
$57.3500
Sale
4/23/2021
(100)
$58.1201
Sale
4/23/2021
(50)
$58.1691
Sale
4/23/2021
(50)
$58.0167
Sale
4/23/2021
(50)
$58.0901
Sale
4/23/2021
(50)
$58.0710
Sale
4/23/2021
(50)
$58.0501
Sale
4/28/2021
(100)
$58.6500
Sale
5/3/2021
(50)
$57.5500
Sale
5/3/2021
(50)
$57.3500
Sale
5/3/2021
(100)
$57.8450
Sale
6/9/2021
(50)
$55.0400
Sale
6/9/2021
(50)
$55.3300
Sale
6/15/2021
(50)
$46.9400
Page 2 of 2
Case 1:21-cv-05739-PAE   Document 1   Filed 07/02/21   Page 34 of 34

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