Beleaguered Lottery.com is facing yet another lawsuit, this time from the founders of one of its subsidiaries. Plaintiffs John Brier and Bin Tu sold their company TinBu to Lottery.com in 2018. They accuse the company of failing to deliver the agreed-upon compensation worth over $10 million.
The suit alleges that in 2018, the plaintiffs reached a written agreement with AutoLotto, as Lottery.com was known at the time. The deal promised Brier and Tu several million dollars in cash, cryptocurrency tokens conferring a stake in the combined company, and a guaranteed five-year employment contract.
The plaintiffs claim that Lottery.com never fully delivered on any of these promises. They attempted to negotiate a new settlement but sued after Lottery.com also failed to make good on that agreement.
This latest lawsuit is one of many legal battles Lottery.com has found itself fighting.
Details on the TinBu-Lottery.com Lawsuit
The plaintiffs claim Lottery.com still owes them over $10 million and has not given them the agreed digital ownership tokens.
That $10 million represents money still unpaid after the renegotiation. The plaintiffs did not disclose the exact numbers of the original 2018 agreement.
The suit also accuses Lottery.com of defrauding the plaintiffs and other investors by making “material misrepresentations” about the company’s financial status before it went public in 2021. Shares in many US online gambling companies plummeted in 2021 and 2022 after a hot streak in 2019 and 2020, resulting in a string of such lawsuits. Defendants in those cases have included:
- Wynn Resorts
The Lottery.com suit also names two company executives as defendants. These are President, CFO, and treasurer Ryan Dickinson and former CRO and director Matt Clemenson. They’re being sued for their alleged roles in concealing adverse facts and misleading representations.
Finally, the lawsuit points to past incidents where Lottery.com admitted to financial records and accounting failures. These include an instance in which the company overstated its cash balance by $30 million. That revelation led to Dickinson’s firing and the eventual resignation of several other executives, including Clemenson.
The Lawsuit Adds To a Turbulent Year For Lottery.com
The lawsuit might not come as a surprise to those following the ongoing Lottery.com drama. Several high-profile scandals and exits have already shaken the company.
The company’s stock began plunging shortly after it went public in November 2021. However, things began unraveling more quickly, starting in July 2022, when Dickinson was fired for the deceptive SEC filings. At the same time, the company announced the layoffs of most of its staff, as it could no longer pay their salaries.
Soon after, Clemenson admitted his involvement and resigned, causing a further loss of 33% in Lottery.com’s value. Share prices bottomed out at around $0.30 and haven’t budged much since.
That September, DiMatteo and three other board members left the company. After the board members’ departures, Lottery.com faced the prospect of delisting from Nasdaq for the second time in a few months.
Chaos has continued to reign at Lottery.com since then. It has changed CFOs twice and is currently searching for a new person to fill the position. Sohail Quraeshi took over as CEO in October but did not last long. In February 2023, Mark Gustavson took over the position.
Lottery Courier Models Are Becoming Popular
While Lottery.com’s story is cautionary, the lottery courier business model has worked out for others in the US.
Lottery couriers provide an online option for people to buy lottery tickets in states that haven’t legalized direct sales through the Internet. The courier buys tickets at a retail outlet on the user’s behalf and keeps them safe while charging a service fee.
The legality of such services varies from state to state, so check our online lotteries page to see if lottery couriers are available in your state.
The popularity of lottery couriers has been rising along with jackpot sizes. Top prizes over $1 billion are becoming the norm due to changes in ticket pricing and game rules. Internet searches for drawings and lottery information have likewise skyrocketed.
One of the most popular courier services is Jackpocket, which until recently, was available as an app only. This month, however, Jackpocket launched a desktop site in 15 states.
The increase in business has attracted newcomers as well. Jackpot.com (not to be mistaken with Jackpocket) entered the US market in January with a launch in Texas. And more companies will likely follow soon.