Lottery.com outlines growth plan after Q1 losses
Lottery.com has outlined its strategy for returning to growth over the course of the year after beginning 2024 with a further revenue drop.
The lottery technology broker posted revenue of just $285,523 (âŹ262,000/ÂŁ224,000) during the three months to 31 March 2024. This was less than half the $620,200 generated by Lottery.com during the same period last year. In its condensed consolidated statement, prepared assuming that the business will continue as a going concern, the Q1 2024 figure was $259,319.
In 2021, Austin-based Lottery.com generated revenue of $16.4m for the full year.
Lottery.com attributed the continuing revenue decrease to the waterfall impact of the operational cessation on the groupâs subsidiaries in July 2022. This decision was made as it did not have sufficient financial resources to fund its operations. It has performed minimal day-to-day operations ever since, impairing its ability to invest in customer acquisition and other growth initiatives.
Lottery.com moving forward
The group relaunched its B2B API Platform on a limited basis last year and plans to relaunch its B2C platform by the end of June 2024. Its Sports.com subsidiary went live after the close of the reporting period in April 2024 following the acquisition of SportLocker. Lottery.com said each of TinBu, Aganar and JuegaLotto has had its revenue remain relatively consistent or decrease slightly from pre-operational cessation levels. Each have decreased expenses.
âThe cornerstone of the companyâs operational progress for FY 2024 will be driven by technology, product and service/capability enhancements,â it added.
Cost of revenue for the period was $72,171, an increase of 73% compared to the prior period. The increase was driven by the increase in the revenue from higher cost products sold as compared to Q1 2023. In its condensed consolidated statement, this figure was $83,787.
The consolidated financial statements do not include adjustments relating to the recoverability and realisation of assets and classification of liabilities that might be necessary should Lottery.com be unable to continue in operation.Â
Gross profit dip due to lower revenue
Lottery.com posted a gross profit of $213,352 in its results of operations, which was down 52%. This decrease was primarily due to lower revenue in the first quarter of 2024 as compared to the same period in 2023. In its condensed consolidated statement, this figure was $175,532.
Operating expenses decreased slightly despite a small increase in personnel costs. With total operating expenses of $3.4m, loss from operations was flat at $3.2m. However, in its condensed consolidated statement, greater operating expenses put the figure up to $5.8m.
Lottery.com said it continued to address legacy issues during Q1, as it had during the full 2023 year. It said it has also regained full compliance with Nasdaq rules. Changes in management were announced last year while Lottery.com said it faces âmaterial weaknessâ over accounting non-compliance. This relates to a class action suit served in 2022 on behalf of investors and former high-ranking employees.
Lottery.com announced a deal to acquire sports-streaming site SportLocker and rebrand it as Sports.com in February 2024. SportLocker, which has links to Saudi Arabiaâs burgeoning sports programme, previously announced plans for club acquisition, sponsorship and media partnership programmes â focussed on UK football and the US Major Soccer League (MSL).
Lottery.com said in a statement that it would acquire S&MI, the owner of SportLocker, in a stock-based deal. The deal comes after announcements relating to the issuing of 20m shares (totalling $100m) and âa substantial expansionâ in fundraising. The latter includeed commitments from new and existing investors rising to $5m from $1m.
The Sports.com platform will first roll out in the US and Europe, along with dedicated efforts in the Middle East. It aims to combine sports news, live streaming and content such as documentaries and films. There is no mention of sports betting being included on the new Sports.com platform.
