Lost in the commotion of the rush to crypto/blockchain (and weed, and lately lithium and cobalt) is a company that, a few months back, investors couldn’t get enough of.
Lottogopher (LOTO.C) is an online lottery ticket seller in California, which is a big deal because US lotteries aren’t allowed to sell tickets online. LOTO works around the system by literally sending employees to the bodega after hours and processing lottery tickets by hand, in return for a monthly subscription fee. This means no more waiting in line behind the guy wanting singles and chopped cheese, no more standing behind grandpa as he checks 87 tickets, no more kicking the bodega cat away from your ankles.
But the plan requires buy in from consumers, which means it needs marketing nous.
Enter William Shatner, Canadian acting icon, Priceline spokesman and mega wealthy stockholder, who is now fronting for Lottogopher.
The company had a successful quarter in terms of overall website traffic, active user statistics and trial user conversions. Press coverage included mainstream media outlets such as Forbes, Fox News Online, Boston Globe, Time-Money, ABC News, Heavy.com, TechDigg, NBC News, A List Daily, The Maven, Money for Life and more. The most impactful news in terms of the company’s brand this quarter was certainly the news of William Shatner becoming the company spokesperson: Mr. Shatner was announced on Sept. 12 and this news paved the way to these major media outlets, while other service providers in the industry became aware of Lottogopher at this time as well. Subsequently, Mr. Shatner filmed commercials, recorded voice overs, attended photoshoots and conducted phone interviews on behalf of Lottogopher.
Monthly Active Users (MAU) is up to 3000, which brings in around $36k in sub fees by my estimation. That’s not enough to turn a profit, but it’s enough of a base to start making meaningful moves to expand.
The company will focus on finalizing the customer database acquisition announced on Nov. 20 to negotiate a binding and definitive deal with the vendor. This customer base includes 177,000 depositing players and general leads, and while the vendor’s business model is different when compared with Lottogopher’s, there is a current revenue base coming from this database.
Solid move. But expansion outside of California is necessary to bring real return on marketing moves. That’ll take some time, but is in motion.
CEO James Morel:
“I want to stress to our shareholders that our business has been built on compliance. No other company that I know of is operating within all of the state and federal laws. We comply with the Unlawful Internet Gaming Act, 18 USC 1301 and the Wire Act. It is not easy to thread the needle exactly as you need to in this business, but we have established a system for servicing this market within the legal boundaries of California, and we plan to grow through phased expansion across the U.S. next year.”
- Retains former lottery executive Melissa Riahei as independent external adviser to advise on U.S. expansion;
- Plans to develop and launch lottery blockchain;
- Announces integration of payment processing solution to accept Bitcoin and Ethereum
Yep, you’ll be able to pay for your lottery ticket in BTC and ETH shortly, while the company makes serious work happen on a blockchain to handle lottery sales and payouts.
If you’re looking for outlier crypto companies that the market hasn’t recognized yet, this is an interesting one. The stock roared on debut, up as high as $0.60+, but has fallen off as early money took its profits and moved to other sectors.
Considering the work done, the heavy hitters attached, and the lack of competition, this should be a screaming buy.
Why isn’t it?
Because it came to market with a ton of cheap paper, held by folks with short term interests, that was in profit all the way down, right up until now. It Vancouvered itself.
Also, the company spends a lot of money marketing the client side of the business, but nothing marketing the stock proper.
That’s a damn shame, because the money they could use to really expand right now, is money that’s going to other companies with less actual business, but more investor attention.
I maintain that Lottogopher is a good deal. There’ll be a catalyst at some point that should make the stock go crazy nuts. But my question is, will anyone be watching when that catalyst comes?
At $0.15, I’m likely going to pick some up.
— Chris Parry
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.
Latest posts by Chris Parry (see all)
- 2020 Gravitas Securities Growth Conference lines up seriously interesting deals, even in weed - February 21, 2020
- Wayland Group (WAYL.C) selling once hyped foreign assets for pennies on the dollar - February 18, 2020
- If the cannabis industry is desperate for capital, time to bet on the guys with capital - February 14, 2020