Paysafe shares slide following allegations re China, Bet365

Online payment processor Paysafe is denying allegations of facilitating illegal online gambling that sent the company’s stock into a tailspin.

On Wednesday, short-selling firm Spotlight Research published a document titled “Paysafe: Material Risks from Regulatory Enforcement Action” that claimed Paysafe was “enabling both illegal gambling and Chinese capital control evasion through alleged undisclosed related parties run by recent former executives.”

Spotlight claims Paysafe’s largest customer, “who we believe to be [online betting operator] Bet365,” is operating a China-facing online betting operation, a revelation on par with the theories that water is wet and Donald Trump is a tiny-handed demagogue with crippling self-esteem issues.

Citing Paysafe’s public filings, Spotlight claims Bet365 is the company that represented 20% of Paysafe’s H1 2016 fee revenues and possibly up to 50% of its earnings, and that “the majority of this revenue comes from Asia.” Spotlight also links Paysafe to Asian online betting giant Dafabet, which has been on the receiving end of Chinese authorities’ enforcement actions.