SEC Charges Lottery.com Executives in Massive Securities Fraud Scheme

A Complex Web of Financial Deception

The Securities and Exchange Commission has filed fraud charges against four former executives of Lottery.com, alleging they orchestrated a sophisticated scheme to artificially inflate company revenues and deceive investors during a high-profile merger with a special purpose acquisition company (SPAC).

The SEC complaint names Lottery.com founder and former CEO Tony DiMatteo, former Chief Financial Officer Ryan Dickinson, former Chief Revenue Officer Matthew Clemenson, and associate Vadim Komissarov . The lawsuit comes months after two Lottery.com executives pleaded guilty to securities fraud charges over their role in the scheme, which involved taking the company public through a merger with a so-called SPAC, reporting fake revenues about Lottery.com, and dumping their shares before the stock price tanked .

The complaint detailed the executives' involvement in a fraudulent $30 million financing deal and an overpriced acquisition of a Mexican gaming company that were both allegedly designed to inflate the company's revenues . In another instance, a $30 million round-trip transaction with a data company was used to make it appear that Lottery.com had earned $30 million in revenue .

The Texas Lottery Connection

Beyond the securities fraud, Lottery.com became entangled in a separate scandal involving the Texas Lottery system. The company was involved in a rigged $95 million jackpot secured in April 2023, with the aid of the Texas Lottery's former executive director, Gary Grief . Lottery.com's former CEO, Tony DiMatteo, reactivated the company's lapsed license to allow for the printing of millions of tickets on a dozen machines delivered quickly to the organization's offices, where no other retail business was conducted .

Lottery.com Chief Operating Officer Greg Potts told legislators that company executives contacted then-Texas Lottery Director Gary Grief to seek clearance for the mass purchase. "We fully expected that they would laugh at us and say, 'Well, no, of course you can't do this,'" Potts testified. "We were very surprised that the answer was yes."

The April 2023 jackpot involved three bulk purchases of lottery tickets, totaling 25 million $1 tickets, that came from the Mediterranean island nation of Malta . State Senator Paul Bettencourt described the situation as potential money laundering: "If I was trying to launder money in this country, I would buy $25 million worth of lottery tickets and not only launder my bad money, my suspect money, I just got two-to-one return. I got $50 million out of it, so I don't have to win many times to make a big difference in my cash flow of laundering."

Regulatory Fallout and Investigations

The securities fraud scheme began to unravel in mid-2022. Internal investigations revealed non-compliance with state and federal laws, particularly regarding the cross-state sale of lottery tickets and improper revenue recognition . The company soon disclosed it had overstated its cash balance by $30 million and recognized improper revenue in the same amount .

Texas lawmakers voted last year to abolish the 32-year-old Texas Lottery Commission, transferring oversight to the Texas Department of Licensing and Regulation . The Texas Lottery's top executive, Ryan Mindell, recently resigned amid mounting pressure . After reviewing complaints, the commission's Enforcement Division determined that the seriousness of the allegations warranted referral to federal law enforcement, including the FBI .

Corporate Rebranding and Future Implications

Lottery.com announced that it has filed to officially change its corporate name to Sports Entertainment Gaming Global Corporation. According to the company, the name change reflects its movement from a lottery-focused business to a broader portfolio of assets across sports, entertainment, and gaming-related verticals .

The company said it has cooperated with the investigation and reiterated that its current leadership was not involved in the misconduct alleged by the SEC. "Since mid-2022, the Company has completely cleaned house, implemented substantial changes to its management team, governance framework, internal control environment and have become fully compliant with the SEC" .

This case represents a significant test for both securities regulators and state lottery oversight systems. The intersection of complex financial fraud with state-regulated gambling operations highlights vulnerabilities that could affect similar companies nationwide. As federal investigations continue and civil litigation proceeds, the outcome may reshape how lottery-related businesses operate and how regulators monitor cross-state gambling activities.