In most countries, lotteries are conducted by state-licensed companies. Regulation and control are necessary because lotteries are not transparent. Who controls which numbers are drawn? Who monitors the payment of winnings? Online lotteries often work in dark web mode: they pressure players, they hide behind complex company constructs, they don’t pay out, disappear and open the same lottery under a different name. Fintelegram took a closer look at the interdependencies of LottoPalace.
LottoPalace – BILD warning against telephone mafia
On the LottoPalace website, customers can bet on the results of various lottery draws or buy scratch cards. In principle, LottoPalace works like binary options – you bet on the occurrence of events such as price developments and numbers. Marketing through the Boiler Rooms (call centers) also works in the same way for these lottery bets as for the Binary Options. In the case of LottoPalace – as our research has shown – even the same boiler rooms and address files are used for customer acquisition and subsequently for support (in the few cases where someone is available).
LottoPalace is distributed and marketed by the public-listed VELTYCO GROUP and the related offshore companies ALTAIR ENTERTAINMENT N.V. and PAYIFIC LTD. VELTYCO has been massively active in the binary options sector in recent years and has marketed, among other things, Option888. The activities of Option888 has been prohibited by many financial market supervisory authorities and/or ordered to cease business operations. After the ban on Binary Options in the EU, Option888 positions itself as a FOREX broker.
In recent months, customer complaints regarding LottoPalace have become louder and louder. The web is full of customers complaints about non-payouts and winnings, inaccurate information and aggressive phone calls. The Facebook page was closed because of the many negative reviews and the BILD newspaper has warned against the Mafia methods of the boiler rooms around LottoPalace. More and more people are also contacting FinTelegram with complaints about non-payouts. We have therefore done some background research.
Development of Lotto Betting Technology and LottoPalace
The lotto betting technology was a sort of spin-off from the Sofia-based TRADOLOGIC, a then-leading provider of software for binary options. In 2014, the founders of TRADOLOGIC launched the LOTTOTECH project (www.lottotech.com). The published goal was the creation of an innovative “White Label Lottery Platform” with a strong affiliate system (called the “LottoPartners”). Nothing less than the revolution of the global lottery market was targeted.
The LOTTOTECH CEO Delzar KHALAF explained the project idea in detail in an interview with IGB Affiliate Magazine.
In 2014, the LOTTOTECH founders’ offshore company DREAMS PARTNERS SOLUTION LTD (Seychelles) acquired the domain www.lottotech.com to implement the project. On its Facebook page, LOTTOTECH posted for the first time on April 24, 2014, and presented itself to the public at the EiG 2014 in Berlin. Also in October 2014, LOTTOTECH received financing of USD 6 million according to iGamingBusiness.
The domain www.lottopalace.com was acquired in 2015 by Uwe LENHOFF‘s ALTAIR ENTERTAINMENT N.V. (Curacao). The domain had already been registered since 2003 but was initially in use in Asia. In early 2015, LOTTOPALACE became one of the first white label partners of LottoTech.
Until April 2016 LOTTOTECH was active on Facebook and reported about events in London and Amsterdam. In April 2015 LOTTOTECH presented its SOFTLOTTO initiative, which was positioned to become a strategic part of LOTTOTECH. In April 2016, LOTTOTECH stopped its public communication, deleted blog posts and old announcements. In parallel, the project SOFTLOTTO was introduced to the market. The domain www.softlotto.com was already registered in May 2014 by DREAMS PARTNER SOLUTIONS LTD, i.e. by the founders of LOTTOTECH.
The LOTTOPALACE Structure Today
VELTYCO, listed on AIM in London, was founded in 2016 by the German citizen Uwe LENHOFF, who is still the main shareholder of the company and continues to work in management. The LottoTech founder is also one of VELTYCO’s main shareholders and was also a member of the company’s Management Board until March 2018.
The prospectus of VELTYCO (formerly “SHELTYCO”) published in summer 2016 (admission document as of June 2016) and various press releases of the company show that the LENHOFF group of companies still operates the LottoPalace website together with its VELTYCO in opaque and complicated structures.
According to our research, LENHOFF has combined the activities around the development of LottoPalace and other lotto betting activities in the Maltese SOFTLOTTO LTD. Development and maintenance of the software are expected to continue in Sofia, Bulgaria.
This SOFTLOTTO LTD was founded in September 2017 and has taken over the domain www.softlotto.com from DREAMS PARTNER SOLUTIONS. In addition, SOFTLOTTO LTD also acquired the wwww.lottopalace.com domain from ALTAIR ENTERTAINMENT N.V. and hence consolidated the different parts of the lotto betting technology venture.
The LOTTOTECH project became part of SOFTLOTTO LTD, which is controlled by the shareholders of the VELTYCO Group. This confusing structure obviously aims to conceal the economic owners and their responsibilities.
VELTYCO, the official but not on the website mentioned marketer of LottoPalace, is to be held responsible for their customers and investors and point of contact for complaints. The operators ALTAIR ENTERTAINMENT N.V. and PAYIFIC LTD listed on the website also belong to the group of companies around the main VELTYCO shareholder Uwe LENHOFF, which is to be regarded as the beneficial owner of the LottoPalace network.
For further information about LottoPalace, please do not hesitate to contact the FinTelegram team.