Three Lawsuits Against Lottery.com and Sports.com Dismissed With Prejudice
Rhea-AI Summary
Lottery.com (NASDAQ: LTRY) has secured significant legal victories as three lawsuits against the company were dismissed with prejudice by the United States District Court for the Western District of Texas – Austin Division. The cases, filed by Ryan Peterson, Brandon Marsh, and Carl Wells, were all dismissed between January and March 2025.
The Court granted the Company's Motion to Dismiss for Failure to State a Claim in all three cases, with final judgments signed on March 27, March 4, and January 25, 2025, respectively. The dismissal with prejudice means the plaintiffs are barred from refiling the same claims.
CEO Matthew McGahan expressed satisfaction with the rulings, stating these favorable judgments will allow the company to focus on resuming gaming operations, building the Sports.com brand, and delivering shareholder value. The company aims to resolve legacy legal matters while steering towards growth with accountability and transparency.
Positive
- Three lawsuits dismissed with prejudice, reducing legal liability and expenses
- Company can redirect resources from legal defense to core business operations
- Legal resolution supports company's ability to resume gaming operations
Negative
- Company faces ongoing challenges with Nasdaq compliance and bid price requirements
- SEC reporting delays and internal accounting control issues remain unresolved
- Company's status as going concern remains uncertain
Insights
The dismissal of three lawsuits with prejudice represents a significant legal victory for Lottery.com. When a court dismisses cases with prejudice for "failure to state a claim," it indicates the plaintiffs couldn't establish legally viable claims even if all alleged facts were true. This is the strongest form of dismissal, effectively barring these plaintiffs from refiling similar claims.
These dismissals occurred sequentially (January, March, and late March 2025), suggesting systematic resolution of legacy legal issues. The court's comprehensive dismissal - including termination of all pending deadlines, hearings, and motions - provides Lottery.com with complete closure on these matters.
For micro-cap companies, litigation can disproportionately drain resources through legal expenses, management distraction, and reputation damage. The unspecified nature of the plaintiffs' claims prevents precise assessment of avoided liability, but the resolution of three separate cases simultaneously removes a significant legal overhang that likely impeded operational progress.
This triple dismissal strengthens the company's legal position and potentially improves its standing with investors, partners, and customers by eliminating uncertainty around these particular liability risks.
For a company with just
The CEO's statement about "resuming gaming operations" is particularly noteworthy, suggesting that litigation may have been impeding normal business functions. This context makes the dismissals even more significant from an operational standpoint.
The resolution of these legal matters removes barriers to several strategic initiatives mentioned by management: resuming core operations, building the Sports.com brand, and improving shareholder value. For a company trading at
The dismissals may also improve Lottery.com's ability to secure capital resources - a concern explicitly mentioned in their forward-looking statements section. Potential investors and lenders typically view unresolved litigation as a major risk factor, making these dismissals potentially transformative for the company's financing options.
This development should be viewed as a necessary but not sufficient condition for turnaround, removing obstacles rather than guaranteeing success.
FORT WORTH, Texas, March 28, 2025 (GLOBE NEWSWIRE) -- Lottery.com Inc. (Nasdaq: LTRY, LTRYW) (“Lottery.com” or the “Company”), a leading technology company in digital lottery and sports entertainment, announces the following favorable judgements from the United States District Court for the Western District of Texas – Austin Division (the “Court”):
- The Court has ruled in favor of the Company granting with prejudice the Motion to Dismiss for Failure to State a Claim in the case styled Ryan Peterson v. Lottery.com, Inc. d/b/a Sports.com Inc. d/b/a AutoLotto.com, Inc. (Case No. 1-23-CV-646-RP). The final judgement was signed on March 27, 2025.
- The Court has ruled in favor of the Company granting with prejudice the Motion to Dismiss for Failure to State a Claim in the case styled Brandon Marsh v. Lottery.com, Inc. d/b/a Sports.com Inc. d/b/a AutoLotto.com, Inc. (Case No. 1-23-CV-080-RP). The final judgement was signed on March 4, 2025.
- The Court has ruled in favor of the Company granting with prejudice the Motion to Dismiss for Failure to State a Claim in the case styled Carl Wells v. Lottery.com, Inc. d/b/a Sports.com Inc. d/b/a AutoLotto.com, Inc. (Case No. 1-23-CV-081-RP). The final judgement was signed on January 25, 2025.
Matthew McGahan, Lottery.com Chairman and CEO commented:
"I am gratified by the Court’s ruling in the Company’s favor. Receiving these favorable judgments allows us to focus our resources on resuming gaming operations, building the Sports.com brand and most importantly delivering value to our shareholders. I am also delighted at the forward momentum our new management team is creating for Lottery.com. We’re successfully resolving legacy legal matters and shifting our attention towards steering the Company towards a new era of growth within an environment of accountability and transparency.”
In all three cases, the court ordered and adjudged that:
- The Defendants’ Motions to Dismiss were granted;
- The Plaintiffs’ Complaints were dismissed with prejudice;
- All pending deadlines and hearings were terminated;
- All other pending motions were denied as moot; and
- The Clerk of the Court was directed to close the cases.
These rulings signify the final dismissal of all claims against the Company. As the cases were dismissed with prejudice, the Plaintiffs are barred from refiling the same claims in this form.
Important Notice Regarding Forward-Looking Statements
This press release contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, regarding the Company’s strategy, future operations, prospects, plans and objectives of management, are forward-looking statements. When used in this Form 8-K, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “initiatives,” “continue,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. The forward-looking statements speak only as of the date of this press release or as of the date they are made. The Company cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company. In addition, the Company cautions you that the forward-looking statements contained in this press release are subject to risks and uncertainties, including but not limited to, any future findings from ongoing review of the Company’s internal accounting controls, additional examination of the preliminary conclusions of such review, the Company’s ability to secure additional capital resources, the Company’s ability to continue as a going concern, the Company’s ability to respond in a timely and satisfactory matter to the inquiries by Nasdaq, the Company’s ability to regain compliance with the Bid Price Requirement, the Company’s ability to regain compliance with Nasdaq Listing Rules, the Company’s ability to become current with its SEC reports, and those additional risks and uncertainties discussed under the heading “Risk Factors” in the Form 10-K/A filed by the Company with the SEC on June 4, 2024, and the other documents filed, or to be filed, by the Company with the SEC. Additional information concerning these and other factors that may impact the operations and projections discussed herein can be found in the reports that the Company has filed and will file from time to time with the SEC. These SEC filings are available publicly on the SEC’s website at www.sec.gov. Should one or more of the risks or uncertainties described in this press release materialize or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Except as otherwise required by applicable law, the Company disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release.
This press release was published by a CLEAR® Verified individual.
For more information, please visit www.lottery.com or contact our media relations team at press@lottery.com.
FAQ
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