Lottery.com, a lottery technology broker, reduced its Q3 net loss from 43.0% to less than 33% despite reporting revenue declines.
Lottery.com, which has had something of a turbulent few years, posted revenue of $285,523 (PS225,800/EUR261,703) in Q3. The revenue was down 59.9% from $711 477, which had been reported for the quarter ending 30 September of last year.
On its 10-Q, the business didn’t go into more detail on Q3 revenues. It did provide information on spending including that the cost of revenues was down by 73.4%, to $72,171.
After a number of savings, operating costs also fell by 47.7%. Lottery.com’s main expense was $1.4m in depreciation, which fell 6.7% on an annual basis.
Other expenses soared by $246,529. This was due to higher interest costs. This loss was $3.4m before tax, which is a significant drop from the $6.1m of Q3 2013.
Lottery.com paid no tax, but reported a negative impact of $34,256 on foreign exchange translation. The company also reported $72,277 of income from noncontrolling interest. The net loss in Q3 was $3.4m, a significant improvement over last year’s $6m.
Lottery.com reduces costs year-to date
In the first nine months of the current year, revenues have dropped by 74.2% and now total $1.6m. This also resulted in lower revenue costs, which were down by 95.1% to $203,001.
Other costs decreased by 91.4% to $346,166, and operating expenses fell by 78.0%, totaling $11.9m. Lottery.com ended the period with a loss before tax of $10.9m compared to last year’s loss of $56.4m.
Lottery.com reported a negative translation of $182 607 due to foreign exchange. It also reported $212,064 of income from noncontrolling interest.
The net loss over the period of nine months was therefore $10.8m. This is a substantial improvement from last year’s loss of $56.1m.
Lottery.com still has concerns
Although the lower net loss may offer some relief to Lottery.com in the short term, the future of the company is still uncertain, as 2023 will be another year that could prove turbulent.
Mark Gustavson was removed from his role as CEO by the company in July, despite having only assumed it in February. Matthew McGahan temporarily took over the company.
Gustavson was appointed to replace Sohail Quareshi. Quraeshi, who was appointed permanent CEO of the company in October 2022 after an interim period, also held this position only for a short time.
Lottery.com revealed in May that it has “material weaknesses” due to non-compliance with accounting standards. The class-action suit filed in August 2022 by investors and high-ranking former employees was the reason for this.
In the suit, the plaintiffs claim that the defendants made “materially misleading or false statements” and failed to reveal that their company did not have adequate accounting controls.
John Brier, Bin Tu and the other founders of TinBu (a lottery data company) filed a suit against Lottery.com in March alleging that it had failed to pay them the promised compensation following the acquisition.
There are some glimmers?
Lottery.com has received some positive news despite this turmoil. It announced in April that it would resume ticket sales through its Texas retail networks to help affiliate partners.
Lottery.com reported that during its first week in operation, it had sold over seven million Texas lottery tickets. The business signed an affiliate agreement exclusively with International Gaming Alliance to provide Texas lottery tickets for the Dominican Republic.
Lottery.com has recently regained its compliance with Nasdaq Stock Market regulations, over a period of a year following an infraction. Nasdaq’s Listing Qualifications Department verified in September that the broker had met minimum bid requirements.
Nasdaq Listing Rule (5450(a),(1)) states that ordinary shares may not fall below $1.00 in the 30 days preceding a business day. Nasdaq informed Lottery.com that they had violated the rule in August of last year.
Lottery.com closed its shares yesterday, 30 November at $1.75.
