In an explosive turn of events, disgruntled shareholders of Lottery.com Inc. have declared an all-out war against the company’s top brass. Accusing the board of directors of gross incompetence, corruption, and self-serving schemes, the furious investors are now marching to court with a damning class action lawsuit.
The breaking point came when Lottery revealed earlier this month that it had awarded substantial amounts of stock to its management, despite the company having no operational activities or sales while maintaining high operational expenses and mounting losses. Here’s the inside scoop on the scandal shaking the company.
Lottery.com has been teetering on the brink of financial collapse, thanks to what shareholders are calling a complete failure of basic management and a clear indication of fraudulent activities within the top management. The finger of blame points directly at Board Chairman Matt McGahan, who also took the reins as CEO on July 20, 2023, and the rest of the board, including Christopher Gooding, Paul S. Jordan, Tamer T. Hassan, Warren Macal, and ex-director Barney Battles. These executives are accused of everything from negligence to outright illegal activities, plunging the company into a state of insolvency.
Financial Meltdown: A Company on the Brink of Collapse
The financial health of Lottery.com has deteriorated rapidly under McGahan’s leadership. When McGahan took the reins as CEO in July 2023, shares were trading at $4.03. By October 2024, the stock had plummeted to just $0.53 — a staggering collapse in value.
Shareholders point to gross mismanagement and out-of-control spending as the primary causes. Operating expenses have spiraled, reaching $25.12 million in 2023 alone, while revenue has tanked to just $6.5 million. In the first half of 2024, the company lost nearly $11.7 million, significantly outpacing its $10.8 million loss from the same period in 2023.
Yet, despite this financial disaster, the company continues to pay $462,000 monthly in salaries, while it hasn’t sold a single lottery ticket — its core business — since July 2023. This rapid financial decline has left the company with virtually no cash flow, forcing it to rely on increasingly desperate measures to stay afloat.
In a recent filing, the company made a bizarre disclosure, attempting to justify renting a mansion in Boca Raton — a luxury residential area near Miami — as a “corporate campus for its U.S. operations.” The filing claimed the property would be used for meetings with potential investors, partners, and acquisition targets for face-to-face gatherings of corporate officers and key consultants. In reality, this mansion serves as a private villa for McGahan and his friends to live and party. The filing further revealed that the lavish property costs $25K per month, and the owner was compensated with Lottery shares.
Corporate Raid and Conflict of Interest
But that’s just the tip of the iceberg. McGahan and Battles are at the center of a shocking corporate takeover scandal. Allegedly, they’ve been funneling company shares to themselves and their cronies under the guise of “incentive plans,” diluting the value of original shareholders’ stakes. Even worse, they’ve allegedly used company funds to repay loans to their own affiliate, United Capital Investments Limited (UCIL), while freezing out legitimate creditors.
Since McGahan’s self-appointment as CEO in July 2023, a series of unlawful moves has effectively enabled him and a small circle of insiders to seize control of the company. This takeover was not just a power grab — it was a calculated scheme that leveraged the company’s Incentive Bonus Plan and the conversion of salaries into company shares, all to the detriment of long-standing shareholders.
McGahan, with the backing of board members, systematically issued large quantities of shares to themselves and external consultants. These shares were ostensibly for compensation, but in reality, they were part of a broader strategy to dilute the stakes of original shareholders. The allocation of shares has been so aggressive that now, this inner circle controls a significant portion of the company’s equity, effectively sidelining the original shareholders and consolidating their power within the boardroom.
The Board also conveniently amended the company by-laws to reduce the quorum requirement for shareholder meetings, lowering the number of shares needed to establish a quorum from a majority of outstanding shares to just one-third.
One of the most controversial aspects of this takeover is the close relationship between McGahan and United Capital Investments Limited (UCIL), a company directly linked to both McGahan and Battles. UCIL has been the beneficiary of substantial allocations of shares with massive discounts to the market price. Over just six months in 2024, UCIL received shares valued at $750,000, a move that raised alarms among other creditors like Woodford Finance and Honey Tree Trading, who were notably excluded from similar arrangements despite their financial contributions to the company.
One more example of this power play was the deliberate obstruction of investment from OneStream Invest Ltd. In August 2023, Lottery.com signed General Terms with OneStream Invest Ltd. for a crucial $50 million loan after falling out with previous investor Woodford Eurasia. Despite shareholder approval for both OneStream and UCIL, McGahan blocked the investment by withholding necessary documentation, stalling the process for months.
On December 20, 2023, OneStream offered funding on the condition that McGahan be replaced by qualified executive. The board rejected this offer, and the next day, secured a hollow deal with McGahan ally Warren Macal’s Prosperity Investment Management, which promised $18 million but never delivered funds. Macal was given a board seat and 124,000 shares, further strengthening McGahan’s control.
As of the date of this publication, 9,228,154 common shares of Lottery.com Inc are in circulation, with the board and affiliated parties, including UCIL, controlling 5,282,004 shares — representing 57.24% of the company’s total shares.
Plus, if McGahan’s actions couldn’t get any more outrageous, in addition to awarding himself 1.5 million shares, he also handed out 39,000 shares to his wife, Lorraine “Lotty” Kelly.
Lottery.com has brazenly used press releases and SEC filings to spread false statements and misrepresentations, attempting to conceal their manipulations. On September 4th, 2024, the company filed a Form S-1, which finally revealed the offering of millions of shares to the market. Crucially, this filing exposed the key benefactors behind the corporate raid, finally shedding light on those who have profited the most from the company’s collapse.
Who is Matt McGahan?
Matthew McGahan’s tenure as Chairman of Lottery.com is the latest chapter in a career riddled with controversy, questionable business practices, and a slew of dubious associations. Known previously as the chairman of London’s notorious Stringfellows gentlemen’s club, this is McGahan’s first time holding a chairman title since those days, and it appears that he has carried over some of the murky tactics from that world into the corporate boardroom.
One of the most troubling aspects of McGahan’s leadership is his history of failed businesses. His track record includes a string of ventures that ended in insolvency, leaving behind a trail of unpaid creditors and financial wreckage. For instance, Exclusive Grand Prix Events LLP, where McGahan was a director, went into liquidation after a shady £300,000 transaction for vehicles that were never delivered to a client.
This episode, along with the liquidation of Southern Motorcycle Group Ltd, which lost its prestigious Harley-Davidson franchise under McGahan’s watch, highlights a pattern of poor judgment and mismanagement. Additionally, Thames Valley Motor Cycles Ltd, another McGahan-led company, faced regulatory action from the FCA for failing to comply with essential financial regulations. The FCA’s final notice against the company criticized it for being unfit to conduct business, further tarnishing McGahan’s reputation.
Adding to the growing list of concerns are the individuals McGahan has chosen to surround himself with on the Lottery.com board. These appointments appear to prioritize loyalty over qualifications, turning the board into a close-knit group of associates rather than a team of independent, experienced professionals.
Tamer Hassan, McGahan’s long-time friend and business associate, is a prime example. Once a “has-been” actor and minor celebrity in the United Kingdom, Hassan was brought in by McGahan as an “independent director” and now serves as the Head of the Compensation Committee. Hassan’s appointment would be laughable if it weren’t so troubling — he has no relevant experience for the role and, even more concerning, has a criminal record that includes jail time. This not only makes him underqualified but also violates NASDAQ’s rules for board members of publicly traded companies.
Yet, Hassan is responsible for setting compensation policies at Lottery.com and raising serious questions about the company’s governance.
Another questionable figure is Paul Jordan, who serves as another “independent” director despite a two-decade-long close association with McGahan. Jordan also has a criminal record, having served time in jail, which should disqualify him from board service under NASDAQ rules. However, the most ridiculous aspect of Jordan’s role is his position as Head of the Audit Committee — a critical role for which he has absolutely no experience or qualifications in audit or accounting.
Then there’s Christopher Gooding, a retired lawyer with a lackluster resume who serves as an “independent director” at Lottery.com, though his independence is highly questionable. Gooding has a long history with McGahan, notably defending him against U.K. authorities in a £20 million PPE supply scandal in 2021 — a case that further darkened McGahan’s already tarnished reputation. It seems clear that Gooding’s role on the board is more about protecting McGahan’s interests than providing unbiased oversight.
However, perhaps the most shocking figure in McGahan’s circle is Andrey Rykenko, also known as Andrey Nikitin. Andrey’s past is as murky as they come — he is a former banker at the European Bank for Reconstruction and Development (EBRD), who was convicted and sentenced to six years in a U.K. prison for accepting over $3.5 million in bribes.
Andrey was also found guilty of money laundering, concealing, converting, and transferring criminal property. Despite his criminal history, McGahan brought Andrey into Lottery.com’s fold, where he was granted 125,000 company shares despite not having a formal contract with the company.
This decision has fuelled speculation that Andrey’s role was more about furthering McGahan’s personal interests than benefiting the company. Moreover, Andrey’s wife, Natalia Nikitina, is a senior partner at White & Case, which served as legal counsel for Lottery.com. She played a key role in crafting Lottery.com’s loan agreement with Woodford Finance, signed in June 2023, and is rumored to have been closely involved in drafting and negotiating contracts between Lottery.com and UCIL, a company linked to McGahan and Barney Battles. This suggests a deeper web of conflicts of interest involving Lottery.com, Andrey Ryjenko, Matt McGahan, and White & Case.
Finally, one more surprising and questionable figure in the mix is Majeed Al Sorour, a former PIF director who played a key role in the Newcastle United takeover. What is someone of his stature doing in this messy web of crooks? According to Lottery.com’s recent disclosure, Al Sorour’s close associate, Darren Arturi, now holds just under 100,000 shares, and a Dubai-based company, Bawabba Partner DMCC, owned by Arturi and likely by Al Sorour, controls another 240,667 shares.
The big question is whether these shares were purchased legitimately or just another bribe from McGahan, who is also based in Dubai most of the time. In exchange for using Majeed’s name in Sports.com press releases and hyping empty promises of incoming investments? It’s a shady deal, and it’s unclear whether Majeed is even aware of any of it.
These associations, combined with McGahan’s own history of financial mismanagement and regulatory penalties, paint a damning picture of a leader who is ill-equipped to run a public company. The board of Lottery.com, under McGahan’s influence, resembles a rogue’s gallery of underqualified, conflicted, and legally compromised individuals. Far from steering Lottery.com toward success, McGahan and his cronies are dragging the company into deeper turmoil, raising serious concerns about its future viability and integrity.
Shareholders Fight Back
Shareholders, including a Ukrainian investor Hennadii Rudych, are not standing idly by. They have prepared a class action lawsuit to hold McGahan and the board accountable for the financial collapse of Lottery.com and the massive losses inflicted on shareholders.
Rudych, representing a group that holds 55,670 shares, expressed the desperation of the investor base: “There are over 4,000 of us, and we’re all suffering at the hands of just five crooked men. We have to save this company. We intend to hold the board accountable for the massive financial losses inflicted on the company and its investors. This is a fraud case, and we will pursue every board member personally.”
Rudych’s group is accusing McGahan and his team of violating their fiduciary duties, committing fraudulent acts, and engaging in insider trading, all of which have contributed to the company’s dire financial state. They are also calling for the removal of McGahan and his associates, hoping to restore stability to Lottery.com before it faces delisting from NASDAQ or worse — complete liquidation.
Other lawsuits have already been filed against McGahan and his cronies by disgruntled lottery creditors. Honey Tree Trading, Sharon McTurk, and Woodford Eurasia Assets accuse McGahan and Lottery management of deliberate breach of contract and fraudulent behavior.
The shareholders are determined to seek justice, and if their claims are upheld in court, the consequences could be devastating for Lottery.com’s leadership. The turmoil within the boardroom is far from settled, and this unfolding scandal is only just beginning.
