Online lottery provider launches ZEAL Investments, offering support for start-ups with 'disruptive' concepts
International online lottery company ZEAL Network SE has announced the formation of a new wing titled ZEAL Investments which will provide financial and other support to interesting start-ups with commercially disruptive ideas in the business.
In a statement this week ZEAL said that its objective is to help unearth new lottery business models and to give existing models a significant competitive edge by employing fresh, imaginative approaches and technology.
The new division is led by lottery entrepreneur James Oakes, following ZEAL Network SE's acquisition of his company Geonomics in March 2016.
In a company statement announcing the launch of the new division, Oakes said:
"With only five percent of the $300 billion worldwide lottery market currently played online, this is a huge opportunity for the industry to fully digitise and build more of a presence in the online and mobile spaces.
"There are thousands of fantastic start-ups out there, all with their own unique ideas, some of which could really move the industry forward. ZEAL Investments has been set up to help these entrepreneurial companies achieve their goals" he added.
If the name James Oakes sounds familiar, cast your mind back to 2011 when James and brother Henry – then 20-somethings – persuaded the Atlantic Lottery Corporation in Canada to invest Cdn$8.7 million with their London map-based lottery company, then titled Roberus, with the goal of attracting a younger demographic to ALC through this new-style lottery.
The investment was financed with an ALC bank loan guaranteed by the Canadian provincial governments of New Brunswick and Prince Edward Island despite the fact that the map-based concept had not been successful in the UK the previous year and the project was headed by the 20-something Henry – a business novice.
Nova Scotia and Newfoundland and Labrador declined to invest.
Henry Oakes told The Guardian newspaper in 2010 that he came up with the online map based lottery concept in 2008 as an 18-year-old "struggling student dreaming of making it big."
ALC launched the game as Geosweep in Canada in 2012, investing in a Cdn$ 2 million promotional budget, but the venture failed to fly and was abandoned a year later, triggering political opposition cries for the heads of those involved.
Nevertheless, the ALC retained an 8 percent in the Oakes's company, Geonomics Global Games, which was planning a re-launch of the lottery in the UK.
The re-launch did not work either and in mid-2015 there were political calls in New Brunswick for a full investigation into the losses the province had incurred in the project.
Shortly thereafter the ALC announced that it was writing off its Cdn$8.7 million investment in Geonomics, including around a half million dollars in interest charges.
ALC's chief financial officer, Patrick Daigle, insisted the 2011 investment decision underwent rigorous scrutiny and deliberation.
ZEAL Network SE acquired Geonomics in March 2016, and the statement announcing the formation of ZEAL Investments this week claims:
"Together, they (the Oakes brothers) launched Geonomics and in so doing created an entirely new class of lottery draw game, went through four funding rounds, secured numerous industry partnerships, and reached a valuation of £50m — before an eventual exit to ZEAL Network SE."
However, earlier this year ZEAL (formerly MyLotto24) announced that it would write down its venture investment in Geonomics Ltd.
In a market update, ZEAL said it had reviewed Geonomics' growth viability and concluded that it could no longer support its investment in the business.
ZEAL's write down meant a non-cash impairment charge of circa Euro 19 million for its fiscal 2015 corporate income statement.
Online Casino News Courtesy of Infopowa