The lottery technology broker, Lottery.com, has unveiled a strategic plan aimed at revitalizing its business, following a disappointing financial performance in the first quarter of 2024. The company reported revenues of just $285,523 (€262,000/£224,000) for the three-month period ending on March 31, 2024 — a dramatic drop from the $620,200 generated during the same period in 2023. According to its condensed consolidated statement, which assumes the business will continue as a going concern, the Q1 2024 figure stood at $259,319.
Based in Austin, Texas, Lottery.com once enjoyed a much stronger financial position. In 2021, the company recorded revenue of $16.4 million for the entire year. However, a series of operational cessations beginning in July 2022 led to a significant revenue decline. These cessations were necessitated by the company’s inability to secure sufficient financial resources to sustain its operations. Since then, day-to-day activities have been considerably minimized, impeding the company’s ability to invest in essential growth initiatives, including customer acquisition.
Despite these setbacks, Lottery.com remains optimistic about its path forward. The company relaunched its B2B API Platform on a limited basis last year and is planning to relaunch its B2C platform by the end of June 2024. Additionally, its subsidiary, Sports.com, went live in April 2024 after acquiring SportLocker. Each of Lottery.com’s units, including TinBu, Aganar, and JuegaLotto, have seen relatively stable or slightly decreased revenue compared to pre-operational cessation levels. However, the company has managed to reduce expenses across these units.
“The cornerstone of the company’s operational progress for FY 2024 will be driven by technology, product, and service/capability enhancements,” the company stated.
Financially, the cost of revenue for the first quarter of 2024 was recorded at $72,171, which represents a 73% increase compared to the prior period. This increase was primarily driven by higher costs associated with the products sold as compared to Q1 2023. In the company’s condensed consolidated statement, this figure was slightly higher at $83,787. Despite these challenges, Lottery.com’s gross profit stood at $213,352, marking a significant 52% decrease from the previous year’s $447,819. The primary cause for this decrease was the lower revenue in the first quarter of 2024 compared to that of 2023.
. In its condensed consolidated statement, the gross profit was reported at $175,532.
Operationally, expenses have witnessed a minor decrease, even though personnel costs experienced a slight uptick. Total operating expenses were recorded at $3.4 million, leading to a loss from operations of $3.2 million, remaining flat year-over-year. However, in its condensed consolidated statement, higher operating expenses pushed this figure up to $5.8 million.
Despite these challenges, the company continued to address legacy issues throughout Q1, similar to its efforts during the entirety of 2023. Importantly, Lottery.com has regained full compliance with Nasdaq rules. Nonetheless, the company acknowledges facing “material weaknesses” over accounting non-compliance, an issue linked to a class-action lawsuit initiated in 2022 on behalf of investors and former high-ranking employees.
In terms of strategic growth, Lottery.com announced a deal in February 2024 to acquire the sports-streaming site SportLocker, rebranding it as Sports.com. SportLocker, which has notable connections to Saudi Arabia’s rapidly expanding sports sector, had previously announced plans for club acquisitions, sponsorships, and media partnerships, focusing on UK football and Major League Soccer (MLS) in the United States.
Lottery.com stated that the acquisition of S&MI, the parent company of SportLocker, will be executed through a stock-based deal. This move comes on the heels of announcements regarding the issuance of 20 million shares, amounting to $100 million, and a substantial expansion in fundraising efforts. These efforts have seen commitments from new and existing investors increase from $1 million to an impressive $5 million.
Looking ahead, the Sports.com platform is set to roll out initially in the US and Europe, with targeted efforts also planned for the Middle East. The platform aims to blend sports news, live streaming, and content such as documentaries and films. Interestingly, there has been no mention of sports betting being integrated into the new Sports.com platform.
As Lottery.com navigates these turbulent financial waters, its focus on technological advancements and strategic acquisitions showcases a determined effort to regain stability and foster growth in the coming years.
