Gustavson removed as CEO of Lottery.com
The troubled lottery technology broker announced a raft of further appointments. A new chief financial officer started last week, and two independent board members – including a Hollywood actor – have been appointed.
Gustavson only joined Lottery.com as CEO in February when he was appointed to replace Sohail Quraeshi. Incidentally, Quraeshi also only held the position for a few months, after he was named permanent CEO in October 2022 following an interim spell.
Lottery.com’s board said Gustavson had been terminated but did not give any reasons for the decision.
McGahan will serve as interim CEO until a permanent replacement for Gustavson is identified. He joined Lottery.com as chair in October last year, shortly after Quraeshi became interim CEO.
Prior to this, McGahan founded UK charity Mask Our Heroes to help supply personal protective equipment during the Covid-19 pandemic. The charity procured and shipped masks to the UK. He also founded – and later sold – Harley-Davidson dealer Magic Automotive Group.
Upon his appointment as interim CEO, McGahan resigned from all committees of the board of which he was a member. Lottery.com added there are no arrangements or understandings between McGahan and any other persons pursuant to which he was selected as an officer.
Further senior changes
Alongside McGahan becoming interim CEO, Lottery.com recently appointed a new chief financial officer. Robert Stubblefield officially took on the role on 14 July, but this was not announced until yesterday.
Stubblefield joins Lottery.com having served as CFO of video games business De Meta since January 2022. Prior to this, he was CFO and chief operating officer at recruitment software provider Jobscience, as well as CFO for another recruiter, Findly Talent.
As was the case with McGahan, Lottery.com said that Stubblefield has no arrangements or understandings with staff at the business.
From Tinseltown to Lottery.com
Meanwhile, Paul Jordan and Tamer Hassan have been appointed as independent members of the board. Jordan and Hassan will both serve on the audit committee, with Jordan also joining the compensation committee.
Hassan is a former boxer who worked in football management before becoming an actor. He starred in films such as The Football Factory and Batman Begins.
Jordan is a motorsport commercial specialist with international sponsorship, acquisitions and communication skills and experience.
Turbulent times at Lottery.com
The latest comings and goings come in what has been another active year for Lottery.com. In May, the business revealed it faces “material weakness” regarding its accounting non-compliance in the face of ongoing class action.
In its long-delayed Q2 2022 financial report, the business outlined a number of issues concerning the effectiveness of its controls and procedures in reporting its financial resulting.
This all linked back to an overstatement of revenue in July 2022. Ultimately, this led to the resignation of chief revenue officer Matthew Clemenson, with CEO Lawrence DiMatteo stepping down soon after.
In March, the business became the subject of a legal challenge from the founders of lottery data business TinBu. John Brier and Bin Tu filed a lawsuit alleging Lottery.com failed to give them promised compensation after the company was acquired.
The suit alleged a written agreement in 2018 said Brier and Tu were supposed to receive millions of dollars in cash, a number of cryptocurrency token investments in AutoLotto and a guaranteed five-year employment contract to continue working for the post-merger combined entity.
However, the challenge said, following the closing of the deal, Lottery.com failed to make the first of many promised payments. It also said the business failed to deliver promised tokens, making that aspect of the deal worthless.
Lottery.com infighting laid bare
The company’s struggles were laid bare when McGahan’s predecessor Richard Kivel resigned, saying it had become “impossible” to perform as an independent director. At the time, Kivel said his efforts to turn round the fortunes of the business had been “aggressively obstructed”.
In a damning resignation letter to the board, Kivel said emergency funding from Woodford Eurasia had not arrived, with no sign of it forthcoming. He added that the chief compliance officer of the business was under FBI investigation.
Kivel had been a member of the Lottery.com board since November of 2021. He remained at the business amid ongoing issues within the business that led other board members to resign in September 2022.
Revenue falls in FY22
Last month, the business was dealt a further blow when it revealed a 58.6% drop in revenue for its 2022 financial year. Revenue for the 12 months to 31 December hit $6.7m.
This was a far cry from Lottery.com’s revenue growth in full-year 2021, which was up 813.3% from Covid-hit 2020.
Aside from the revenue drop, net loss for the year also increased by 14.1% to $60.3m.
Some hope?
Lottery.com was handed some good news in April when it resumed ticket sales operations to support affiliate partners through its Texas retail network.
During the first week of operations, Lottery.com said it sold more than seven million tickets for Texas lottery games.
Meanwhile, Lottery.com also signed an exclusive affiliate agreement with International Gaming Alliance. This covered the supply official Texas lottery tickets in the Dominican Republic.