Issuer Spotlight: Lottery.com

Originally posted by Juan Hernandez on Feb 20, 2020 2:51:00 PM

As a leader in the mobilization of officially sanctioned lottery games, Lottery.com aims to raise significant funds for humanitarian needs using games of chance. Powering these efforts is its revolutionary mobile lottery platform, which is capable of raising billions of dollars for charity.

Lottery.com, through its LDCC Universal PLC entity, made its LDCC security token available to U.S. investors this month on the Openfinance platform, making it one of the latest additions to Openfinance’s growing portfolio of digital securities. Here, Lottery.com’s CEO, Tony DiMatteo, and co-founder, Matt Clemenson share their thoughts on nonprofit fundraising and working with Openfinance.

Tell us about Lottery.com and your mission.

When Lottery.com began four and a half years ago, we found it strange that you could buy most anything online, yet lottery tickets were still paper-based. Now, our mobile platform is bringing the charitable side of the lottery to light. We work with vetted nonprofit organizations to help them raise money, and we add a prize. When people participate, they’re actually making a donation to their charity of choice. We really hope to make the world a better place through our platform.

What kinds of causes can investors support through Lottery.com and the LDCC token?

We work with a lot of charitable causes that are attractive to our investors, from The ALS Foundation to Best Friends Animal Society. We work with large nonprofit organizations, and we’re always looking to connect our investors with more causes that are important to them. Not only do we want to do well, we want to do good, too.

One area we’re really passionate about is the United Nations’ sustainability goals. The UN assembled a task force that is focused on the biggest issues of our time, and our mission is about making a bigger difference on those same issues. In particular, we’re really invested in ending extreme hunger. We also select our nonprofit partners carefully to make sure they’re spending charitable dollars efficiently and effectively.

As a company focused on revolutionizing the traditional paper-based lottery system, how did issuing a digital security fit into your larger vision as a company?

We believe that digital security offerings are the future of fundraising. The transparency inherent in this type of offering aligns with our overall mission, because digital securities are a better way to raise money.

We were initially intrigued by blockchain as a technology and the efficiencies and transparency that are built-in. Being a highly regulated company, compliance with U.S. security laws was a high priority for the firm. It was very clear to us that there are advantages that come from raising funds through a blockchain-based private placement. Through the LDCC token, we have an opportunity to provide more value to our investors while deepening connections with them. For example, our investors actually are eligible to receive a 7% revenue share in the company.

Can you walk us through the timeline and process of listing LDCC? What surprises or challenges did you encounter along the way?

As one of the first large digital offerings, there was a steep learning curve for us and all of the other parties involved. One of the biggest challenges at the time was understanding the guidance coming from the SEC. Throughout that process, we’ve worked to make prudent and cautious choices to comply with regulations.

LDCC became available to international investors on Openfinance in January 2019 and to U.S. investors this month. How has Openfinance supported you throughout the listing process?

Our global charitable sweepstakes is our first venture into digital securities. The Openfinance team has been very liberal with sharing its expertise in capital markets and securities law and has helped us with everything from spotlighting our platform to educating our investors on navigating the marketplace. They’ve also introduced us to many partners throughout the space. Our association with Openfinance has been an asset in our first digital security offering.

Since launching on Openfinance, how have the initial results aligned with your goals for LDCC?

We’re now able to reach a broader set of investors through a global platform. At a more foundational level, just being able to offer this type of asset to our investors has been a big achievement, because we’re able to offer our investors revenue on a product that has a revenue participation. The LDCC offering has really helped to solidify us as leaders in this space. Going through the process has allowed us to meet and form partnerships with industry and thought leaders, and we’ve also been successful in raising capital for the company.

What advice would you give to other private companies considering a digital security offering?

We spent countless hours seeking legal advice so we could ensure everything was 100% compliant. We encourage other sponsors and issuers to do the same to preserve the legitimacy of the space. It’s important for both investors and issuers to be patient to execute everything correctly. As we digitize privately placed securities, prioritizing compliance is going to be essential for the continued growth of the industry.

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