Lottery.com Fires Back At Alleged Hostile Takeover Attempt

In response to a lawsuit filed in September, Lottery.com’s leadership is alleging that investor Philip Gurian, also known as “Florida Phil,” is attempting an illegal takeover of the lottery ticket platform. The lawsuit, filed on Sept. 4 by Gurian through his investment firm Honey Tree Trading LLC, has drawn attention to both Gurian’s controversial past and the lottery courier company’s recent financial struggles.

During a Delaware Chancery Court hearing on Wednesday, Christopher Gooding, a Lottery.com director representing himself, argued that Gurian’s lawsuit is a hostile maneuver intended to enable criminal activities within the company. Gooding, referring to Gurian’s criminal history, said Gurian is a “con shouting ‘con’ at Lottery” and accused him of concealing his background to gain influence over the company.

Gurian, whose past convictions include charges related to mob-linked stock schemes and illegal gambling, has denied Gooding’s allegations. He continues to claim that Lottery.com breached its investment agreement.

The controversy centers on Honey Tree’s claim that it invested nearly $1.3 million in Lottery.com, expecting shares and warrants in return. Honey Tree claims the funds were misappropriated to cover costs, such as CEO Matthew McGahan’s $25,000 monthly rent, and says the company failed to fulfill the investment agreement’s terms.

Past comes back to haunt

Gurian argues that his prior offenses are irrelevant to the current dispute, maintaining that his firm is owed compensation. “I don’t deny I’ve done things that got me into trouble,” Gurian stated in September, defending his right to fair treatment as an investor despite his past.

Gurian’s lawsuit and his firm’s recent motion seek expedited court consideration. The suit cites allegations that Lottery.com has not met Delaware tax obligations and has failed to file annual reports.

Honey Tree asserts that these actions reflect broader mismanagement issues at Lottery.com, contending that the company’s leadership has neglected regulatory requirements essential to maintaining a compliant business. Anne Melton, representing Honey Tree, argued in court that the firm remains a legitimate shareholder and, therefore, holds a stake in how the company conducts its affairs.

Gooding counters that Honey Tree’s involvement and Gurian’s history suggest ulterior motives. He argues that the funds from Honey Tree were not transparently sourced, implying possible money-laundering intentions.

Furthermore, Gooding claims that Gurian used a pseudonym to enter the investment agreement, a tactic he alleges was intended to conceal Gurian’s criminal past from Lottery.com. Gooding maintains that this lawsuit is just one step in Gurian’s broader effort to seize control of Lottery.com for improper purposes.

Lottery.com dealing with bigger issues

Complicating the case further, Lottery.com has reportedly been grappling with outstanding tax obligations in Delaware, totaling over $300,000, a situation that has only recently come to the attention of the company’s board. Gooding acknowledged the oversight, stating that directors had not fully understood the extent of Lottery.com’s tax liabilities but are now working to resolve them.

Vice Chancellor Nathan A. Cook, overseeing the proceedings, expressed concerns about the self-representation of Lottery.com’s directors and questioned why they had not yet secured Delaware-based legal counsel. The judge instructed the company to respond to Honey Tree’s complaint promptly, emphasizing the importance of addressing allegations of potential misconduct and mismanagement.

Cook expressed his frustrations with the procedural delays, especially as Lottery.com’s leadership represented themselves pro se, meaning they appeared without official legal representation in Delaware. The vice chancellor suggested that Honey Tree’s accusations could lead to irreparable harm to Lottery.com’s reputation and assets.

Given the “highly unusual allegations,” Cook indicated that the balance of interests seemed to justify expediting the case. This could set the stage for upcoming hearings to consider potential injunctive relief that could restrict certain activities within Lottery.com.

The legal dispute brings significant attention to both Gurian’s criminal history and Lottery.com’s governance, as Honey Tree seeks damages and equity compensation for the allegedly unmet terms of its investment. Gooding has continued to frame Gurian’s involvement as a direct threat to the integrity and future of Lottery.com.