How a SPAC Deal Built on Fiction Brought Down Lottery.com
By Nick Silver, Editor-in-Chief, LottoExposed
In a dramatic unraveling that now reads like a corporate crime thriller, Lottery.com—previously reviewed by LottoExposed — is at the center of a growing legal firestorm. The once-hyped digital lottery platform now faces a class action lawsuit and federal criminal investigation over what plaintiffs describe as a web of “sham transactions,” securities fraud, and violations of gambling law.
At the heart of the complaint is a familiar cautionary tale: a high-pressure SPAC deal, a failing startup, falsified financials, and investors left holding the bag.
A Merger Fueled by Desperation, Not Due Diligence
The roots of the scandal trace back to Trident Acquisitions Corp. (TDAC), a special purpose acquisition company (SPAC) created to find a target in the Eastern European energy sector. When that plan failed, and a fast-approaching SPAC deadline threatened to nullify the deal and render TDAC’s shares worthless, CEO Vadim Komissarov turned to a struggling U.S. company instead: AutoLotto, Inc., which would later rebrand as Lottery.com.
AutoLotto, according to court filings, was on the verge of collapse — unable to meet payroll and facing deep operational issues. Rather than walk away, Komissarov allegedly helped orchestrate a financial illusion. In late 2020, AutoLotto entered into a $9 million “data services” agreement with a third party, which prosecutors claim was entirely circular and devoid of economic substance. The money looped through shell entities and was booked as revenue, even though no legitimate service was ever provided.
Internal emails, a federal indictment, and now a civil class action claim that this was only the beginning. The inflated revenue from that deal — and potentially others — was later included in the official Proxy Statement used to solicit shareholder approval for the SPAC merger in October 2021. One line in that statement claimed $5 million in deferred revenue linked to the $9 million deal. That, too, was allegedly a fabrication.
Fabricated Revenue and the Collapse That Followed
Once Lottery.com went public, the scheme had to continue — or unravel. According to the lawsuit, the company entered into another questionable $30 million service credit deal with a second entity in 2021. But behind the scenes, the funds used in that “purchase” were actually borrowed by Lottery.com itself, and the credits issued were non-transferable — rendering them functionally worthless.
The entire transaction allegedly existed only to artificially boost revenue on paper. When the truth came out, Lottery.com was forced to restate earnings for Q4 2021 and Q1 2022, wiping $35.6 million off the books.
Auditors quit. Shareholders revolted. The stock crashed. And in the weeks that followed, top executives — including co-founders Lawrence DiMatteo, Matthew Clemenson, and CFO Ryan Dickinson — were pushed out.
A Lottery Company That Couldn’t Follow Lottery Laws
The lawsuit doesn’t stop at corporate fraud. It also accuses Lottery.com of engaging in illegal lottery ticket sales across state lines, violating both federal interstate gaming laws and state-level licensing restrictions.
According to internal reports uncovered during the investigation, when local couriers weren’t available, Lottery.com printed tickets at its headquarters in Texas — even for orders placed in states like Pennsylvania. The practice not only deprived states of proper tax revenue and regulatory oversight, it broke the law.
Additionally, the company’s claim that it used geofencing technology to verify the physical location of its customers has come under fire. Plaintiffs and whistleblowers allege that Lottery.com had no effective geolocation technology in place, exposing itself — and its customers — to unauthorized or unlawful ticket purchases.
What Is a SPAC and Why Does It Matter?
A SPAC (Special Purpose Acquisition Company) is a shell company formed to raise capital and acquire an existing business. Unlike traditional IPOs, SPACs can fast-track companies to public markets — but with far less scrutiny. Many SPACs have been criticized for pushing questionable startups into public trading before they’re ready or regulated.
Criminal Charges Support Civil Claims
Beyond the class action, the U.S. Department of Justice and Securities and Exchange Commission are also actively investigating. Komissarov faces charges of securities fraud, obstruction of justice, and making false statements in SEC filings.
One damning piece of evidence is a recording captured by federal investigators, in which Komissarov begs his fellow executives not to name him in the sham deal. “If they name me, I’m in deep, deep, deep, deep water,” he allegedly said.
His plea alone paints a picture of a company whose leadership knew exactly what they were doing — and who they were trying to protect.
Key Allegations in the Class Action
– Sham transactions used to inflate AutoLotto’s revenue prior to the merger
– Misstatements in official SEC filings and Proxy Statements
– Post-merger revenue fraud through circular loan deals
– Violations of federal and state gambling laws by selling tickets across jurisdictions
– Failure to implement adequate geolocation or compliance controls
The Impact on Investors — and the Industry
The plaintiffs in the class action include individual and institutional shareholders who allege that Lottery.com’s misstatements caused them severe financial losses. Some voted in favor of the SPAC merger based on fraudulent documents. Others bought stock after the IPO, only to see it plummet once the truth surfaced.
But this case also has broader implications for the digital lottery industry.
As editor of LottoExposed, I’ve warned before that the courier model and aggressive SPAC activity demand stricter scrutiny. Platforms that blend fintech, gambling, and public investment are a regulatory minefield — and when governance fails, the damage hits everyone: investors, customers, and public trust in the game.
The Lottery.com saga is a prime example of why this industry needs not just disruption but accountability.
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