SBTech Must Set Aside $30 Million To Pay Potential Claims

SBTech Must Set Aside $30 Million To Pay Potential Claims
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An attempted computer hack of SBTech continues to affect multiple sites powered by the sports betting technology firm and SBTech’s sellers have been ordered to set aside $30 million in cash and equities to fund any losses resulting from the shutdown.

All SBTech-run sites were taken offline after what appeared to be a cyberattack hit the provider on March 27. No secure data was obtained.

Meanwhile, the merger of DraftKings with SBTech via Diamond Eagle Acquisition Corp. was scheduled to become official via a virtual meeting on Thursday. However, the attempted computer breach pushed back that closing date and forced the terms of the deal to change.

The Churchill Downs BetAmerica sportsbooks in New Jersey, Indiana and Pennsylvania have yet to return online since the shutdown. The Oregon Lottery Scoreboard betting site has returned, along with the SBTech sites in Europe.

Money Set Aside For Possible Claims

The sellers of SBTech will now set aside $10 million of the $600 million in cash they will receive in an escrow account for two years to potentially compensate SBTech clients for lost revenue due to the stoppage. In addition, $20 million in common stock set to be paid to SBTech will also be set aside for the same period and purpose.

The cash and stock will be used “to cover certain indemnification obligations of the SBT Sellers ... relating to a recent cybersecurity incident. Any remaining cash and shares will be released from escrow and such lock-up provisions, respectively, on the second anniversary of the closing date, subject to any outstanding unresolved claims,” Diamond Eagle Acquisition Corp. said in a filing with the Securities and Exchange Commission.

No SBTech clients have yet to publicly make any claims against the provider.

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