Lottery technology broker Lottery.com has secured an investment commitment of $18.0m (£14.2m/€16.4m) from financial group Prosperity Investment Management.
Lottery.com said it would use the funds to “accelerate” its strategic acquisition plans. It also said the Prosperity investment will support market development initiatives for the Lottery.com and Sports.com brands.
Prosperity will fund Lottery.com through an investment vehicle provided by United Capital Investments Limited (UCIL).
Matthew McGahan, who was named CEO of Lottery.com earlier this month, welcomed the new financial support. He described Prosperity as the “ideal” financing partner for the company.
“They value the value of Lottery.com and Sports.com and are investing both capital and strategic resources to serve the stakeholders of both organizations,” McGahan said. “Prosperity’s expertise and network in high-profile sports arenas provide an unparalleled opportunity for brand exposure and consumer engagement.
“This partnership not only strengthens the company’s balance sheet, but also enables us to leverage the global appeal of motorsports for market development and audience expansion.”
Lottery.com and Prosperity: On the way to the checkered flag?
Prosperity has interests across a range of industries, but particularly in the world of motorsports. This also includes Formula 1, in which two of its ambassadors – Sergio Perez and Alex Albon – are currently competing.
Prosperity founder Warren Mecal said he was excited to be part of the resurgence of Lottery.com. He also referenced the “emergence” of the Sports.com brand.
“Our company has a unique understanding of the motorsports sector,” said Mecal. “Our Motorsport Ambassadors represent every major racing circuit and we welcome the opportunity to use them to support the launch of the Sports.com brand.”
Lottery.com built on this, saying in a statement that the collaboration represents a “critical” step in expanding its presence in international sports.
This also comes after the group acquired Nook Holdings to help develop the Sports.com brand in the Middle East. It also partnered with former elite special forces commander Ant Middleton to increase brand awareness.
“These partnerships underscore the company’s commitment to combining a dynamic sports experience with wellness and fit perfectly with the broader vision of prosperity in the sports industry,” said Lottery.com.
McGahan concluded: “This investment by Prosperity is a strategic fit with the company’s vision. It provides the necessary capital infusion to accelerate strategic growth plans, particularly in the rapidly evolving digital sports and gaming sectors.
“Lottery.com is poised to redefine the industry landscape, supported by the synergistic partnership with Prosperity, UCIL and the exciting new ventures under the Sports.com brand.”
Could Lottery.com be on the verge of a turnaround?
The investment comes at the end of another year of ups and downs, although recent weeks suggest a change in approach from the troubled operator.
McGahan took over as CEO in mid-December. McGahan is now permanent CEO after serving in the role on an interim basis since July 2023. This followed the departure of Mark Gustavson, having only taken over the role at Lottery.com in February.
Joining McGahan’s leadership team is Gregory Potts, who has been promoted to chief operating officer. In addition, Lottery.com’s board approved Robert Stubblefield as the group’s new chief financial officer.
Also that month, Lottery.com released its third-quarter results, which showed lower revenue but a narrower net loss. Revenue fell 59.9% to $285,523 (£225,050/€259,359), but cost of sales also fell 73.4% and operating expenses fell 47.7%. The net loss was $3.4 million, an improvement from $6.0 million last year.
There are still major concerns
Although there has been some good news for Lottery.com in recent weeks, there is no doubt that the group has had another tough year.
Management changes were announced earlier this year, while Lottery.com said in May that the company was facing “significant weaknesses” due to non-compliance with accounting standards. This is a class action lawsuit served in August 2022 on behalf of investors and former senior employees.
Lottery.com was also a lawsuit filed by John Brier and Bin Tu, founders of lottery data company TinBu. The latter claimed that it had not paid them promised compensation after taking over the company.
Other developments in 2023 included Lottery.com resuming ticket sales in April to support affiliate partners through its Texas retail network.
Lottery.com also came back into compliance with the Nasdaq exchange’s rules after violating the rules. In September, Nasdaq’s listing qualifications department confirmed that the broker had demonstrated compliance with minimum bid price requirements.