Lottery.com said it will use the funds to “accelerate” its strategic acquisition plans. It also said the Prosperity investment will support market development initiatives for both its 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 appointed CEO of Lottery.com earlier this month, welcomed the new financial backing. He described Prosperity as the “ideal” funding partner for the business.
“They appreciate the value of Lottery.com and Sports.com and are investing both capital and strategic resources to benefit both our organisations’ stakeholders,” McGahan said. “Prosperity’s expertise and network in high-profile sports arenas offer an unrivalled opportunity for brand exposure and consumer engagement.
“This partnership not only fortifies the company’s balance sheet but also positions us to leverage the global appeal of motorsport for market development and audience expansion.”
Lottery.com and Prosperity: heading for the chequered flag?
Prosperity has interests across a range of industries but significantly so within the world of motorsports. This includes Formula One, where two of its ambassadors – Sergio Perez and Alex Albon – currently compete.
Prosperity’s founder, Warren Mecal, said that he is excited to be part of the resurgence of Lottery.com. He also referenced the “genesis” of the Sports.com brand.
“Our company has a unique understanding of the motorsports sector,” Mecal said. “Our motorsports ambassadors represent every major racing circuit and we are excited at the opportunity to leverage them in support of the rollout of the Sports.com brand.”
Lottery.com built on this, saying in a statement that the collaboration marks a “pivotal” step in expanding its footprint in the international sports arena.
It also comes after the group acquired Nook Holdings to help develop the Sports.com brand in the Middle East. In addition, a partnership was struck up with ex-Elite Special Forces Commander Ant Middleton to expand brand awareness.
“These partnerships underscore the company’s commitment to integrating a dynamic sports experience with wellness, aligning perfectly with the broader vision of Prosperity in the sports industry,” Lottery.com said.
McGahan concluded: “This investment from Prosperity strategically aligns 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’s landscape, bolstered by the synergistic partnership with Prosperity, UCIL and the exciting new ventures under the Sports.com brand.”
Could Lottery.com be turning a corner?
The investment comes at the end of what has been another year of ups and downs, although recent weeks suggest a change in approach for the troubled operator.
McGahan took charge as CEO in mid-December. McGahan is now permanent CEO having served in the role in the interim since July 2023. This followed the departure of Mark Gustavson after only taking the position in February at Lottery.com.
Joining McGahan in the leadership team is Gregory Potts, who has been promoted to chief operating officer. In addition, the Lottery.com board approved Robert Stubblefield as the group’s new chief financial officer.
Also this month, Lottery.com published its Q3 results, revealing lower revenue but a reduced net loss. Revenue fell 59.9% to $285,523 (£225,050/€259,359) but cost of revenue also fell 73.4% and operating spend was down 47.7%. As such, net loss hit $3.4m, an improvement on last year’s $6.0m.
Wider concerns still linger
While there has been some good news for Lottery.com in recent weeks, there is no doubt the group has endured another tough year.
Changes in management were announced early in the year while, in May, Lottery.com said it faces “material weakness” over accounting non-compliance. This relates to a class action suit served in August 2022 on behalf of investors and former high-ranking employees.
Lottery.com was also a lawsuit by John Brier and Bin Tu, founders of lottery data business TinBu. This claimed it failed to give them promised compensation after the company was acquired.
Other developments in 2023 included Lottery.com in April resuming ticket sales to support affiliate partners through its Texas retail network.
Lottery.com also regained compliance with Nasdaq stock market rules after falling foul of regulations. In September, Nasdaq’s listing qualifications department confirmed the broker evidenced compliance with minimum bid price requirements.