Lottery.com Inc. (LTRY, LTRYW)
Lottery.com Inc. is an online lottery, data, and sweepstakes platform that suspended its U.S. operations in July 2022 due to severe cash shortages and furloughed most employees. It continues to operate international subsidiaries (Aganar, JuegaLotto) and its lottery data arm (TinBu), and launched ...
Lottery.com Inc. (NASDAQ: LTRY) 2024 10‑K Deep Dive – What You Need to Know
In this comprehensive review, we dissect Lottery.com’s Form 10‑K for the fiscal year ended December 31, 2024. We cover the company’s business model, recent developments, legal challenges, financial performance, and future outlook. Our goal is to help investors determine if Lottery.com is an opportunity worth pursuing or a red flag to avoid.
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1. Business Overview & Key Segments
Lottery.com (formerly Trident Acquisitions Corp.) operates four main businesses:
- B2C Lottery Platform (U.S. & International)
• Enables users to purchase draw games online via web and mobile apps.
• Revenue: service fees (U.S.) and markups (select international markets). - B2B API (Lottery-as-a-Service)
• Provides partners with API access to purchase and resell lottery tickets in jurisdictions where allowed. - Data Services (TinBu)
• Delivers real‑time results, jackpots, and proprietary transaction data to digital publishers and media. - Sweeps & Promotions (WinTogether & DonateTo.Win)
• Manages charity sweepstakes.
Sports.com (acquired domain & launched app in 2024) now delivers sports content, including live streams in Africa, and has global distribution partnerships.
2. Recent Developments & Strategic Moves
- 2022 U.S. Suspension
• July 2022: furloughed most U.S. staff, suspended U.S. lottery sales due to cash constraints. - International Subsidiaries Unaffected
• Aganar and JuegaLotto in Mexico, and TinBu data operations continued uninterrupted. - New Acquisitions
• SMI Ltd. (Sports content platform; $1M in stock installments).
• Nook Holdings (Dubai co‑working platform) closed in Q2 2025 for Middle East expansion.
• Spektrum Ltd. for multi‑jurisdiction sweepstakes. - Board & Governance Changes
• Resignations, new director appointments (e.g., Warren Macal).
• Switched auditors to Boladale Lawal Company in December 2024. - Capital Raises & Financings
• S‑1 effective for sale of up to 50M shares at $3.00 known as a “at‑the‑market” facility.
• Stock Purchase Agreement: up to $100M over time at 90% VWAP with Generating Alpha Ltd.
3. Legal & Regulatory Challenges
Major Lawsuits
- Woodford Eurasia Assets (UK & Delaware)
• Loan dispute filed in London & Delaware courts.
• Multiple injunctive & preliminary relief attempts dismissed. - Streicher Judgment (Delaware Chancery)
• $16.5M breach‑of‑contract judgment awarded; collectible by wage garnishment. - Class Actions & Securities Litigation
• Federal securities class action alleging misleading statements.
• Amended complaint proceeding on narrowed claims. - TinBu Data Dispute (Florida & Federal)
• Trade‑secret and breach‑of‑contract claims – appeals & arbitration ongoing.
Regulatory Risks
- Wire Act & Interstate Wagering
• 2019 DOJ opinion broadened Wire Act to lotteries; First Circuit narrowed it again.
• Ongoing uncertainty on legality of interstate/foreign lottery ticket sales. - State‑by‑State Variations
• Some states ban courier sales or mark‑ups, require unique licensing, or prohibit underage users. - Responsible Gambling & Anti‑Money Laundering
• Underage restrictions, know‑your‑customer, and self‑exclusion processes must meet evolving standards. - Data Privacy (GDPR, CCPA)
• Handling user PII across multiple jurisdictions invites regulatory scrutiny.
4. Detailed Financial Analysis (2024 vs. 2023)
($ in millions)
| Metric | 2024 | 2023 | Change | % Change |
|---|---|---|---|---|
| Revenue | $1.07 | $7.02 | (5.95) | (85%) |
| Cost of Revenue | 0.32 | 5.67 | (5.35) | (94%) |
| Gross Profit | 0.745 | 1.352 | (0.607) | (45%) |
| Op. Expenses | 18.907 | 19.003 | (0.096) | (1%) |
| Operating Loss | (18.16) | (17.65) | (0.51) | 3% |
| Impairment (Goodwill & Int.) | 4.30 | 7.51 | (3.21) | (43%) |
| Prepaid Ad Credits Reserve | 4.75 | 0 | 4.75 | n/a |
| Net Loss | (28.71) | (25.77) | (2.94) | 12% |
| Share of Net Loss (Noncont.) | (0.17) | 0.27 | (0.44) | (163%) |
| Net Loss to Lottery.com | (28.56) | (25.56) | (3.00) | 12% |
Key Takeaways
- Revenue Collapse: Down 85% due to stalled U.S. B2C relaunch and no repeat of one‑time bulk ticket sale.
- Operating Costs Flat: OPEX remain near $19M despite the 2022 furlough.
- Heavy Impairments: $4.3M write‑downs of goodwill/intangibles in 2024; lower than 2023’s $7.5M.
- Reserve Build: $4.75M reserve for unused ad credits.
- Cash Burn: 2024 ops used $1.5M cash (vs. $2.1M in 2023); cash on hand only ~$63K at year end.
- Debt Reliance: $798K owed to Woodford, $697K to UCIL, $1.21M to Univest; convertible feature risks dilution.
- Going Concern: Severe cash constraints raise substantial doubt about 12‑month viability.
5. Balance Sheet & Liquidity
- Cash & Equivalents: $63K (12/31/24) vs. $1.43M (12/31/23)
- Accts Receivable: $0.76M vs. $1.68M
- Prepaid Expenses & Other Current Assets: $5.34M vs. $10.1M
- Total Current Assets: $6.22M vs. $13.2M
- Deferred Ad Credits: $4.75M reserve against prepaid ad assets
- Total Liabilities: $10.6M vs. $10.9M
- Long‑Term Convertible Debt: ~$2.08M
- Equity: $(4.35)M vs. $7.7M
Working Capital: Negative $4.7M vs. $2.3M positive last year
Liquidity remains critical. Management plans to bridge the funding gap through new debt and at‑the‑market equity offerings, but success is far from guaranteed.
6. Management’s 2025 Roadmap & Risks
3‑Phase Recommencement Strategy
- Phase 1 (H1 2025):
- B2C Platform soft launch in select domestic & international jurisdictions; ramp sweepstakes; relaunch WinTogether (DonateTo.Win).
- Leverage leftover ad credits for user acquisition.
- Phase 2:
- Revive B2B API, Sports.com monetization, and ticket fulfillment.
- Phase 3:
- Broaden US rollout & enter new global markets via Spektrum and Nook acquisitions; secure local licenses.
Top Risks & Uncertainties
- Funding Shortfall: Operating cash outflow, minimal runway, need successful debt/equity raises.
- Regulatory Hurdles: Federal Wire Act & Interstate Wagering Amendment uncertainties; shifting state statutes; heavy licensing.
- Intense Competition: Well‑funded sports, gaming, and lottery platforms.
- Legal Overhang: Litigation, class actions, and cross‑border disputes.
- Tech & Security: High‑risk fintech environment; geo‑location, compliance, and security breaches.
- User Adoption: Sweepstake vs. paid models; digital marketing costs.
- Residual Reputation Drag: 2022 furlough & restatement after internal probes.
7. 2024 Investment Score & Verdict
Score: 2.0 / 10
Why So Low?
- Severe cash constraints, net loss of $28.7M, negative working capital, close to zero cash runway.
- Heavy reliance on litigation outcomes and covenant‑laden financing with dilution risk (Woodford, UCIL, Univest).
- Ongoing uncertainties around legal/compliance and regulatory environment.
- Pending relaunch phases with unpredictable timing and no guarantee of user adoption.
Bottom Line: Lottery.com faces an uphill battle to revive its U.S. B2C platform, cover operating losses, and settle multiple lawsuits while maintaining compliance in a complex, fast‑moving industry. Investors should consider the high risk of dilution, potential bankruptcy, or liquidation if future raises fall through.
For investors with a high risk tolerance and a belief in Moonshot digital lottery and sports media plays, this might be a speculative swing. But for traditional value or growth investors, the odds—and the near‑term cash runway—just aren’t attractive yet.
Disclosures & Disclaimer: This blog post is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Always perform your own due diligence and consult a licensed financial advisor. Past performance is no guarantee of future results. All data and figures are sourced from Lottery.com’s 10‑K for the fiscal year ended December 31, 2024 as filed with the SEC.