- is struggling with cash collection in the online financial trading marketing vertical and may, therefore, have to
- make massive impairments and
- must reduce its marketing expenses.
Interestingly, the company’s defaulting debtors all belong to the network of companies controlled by Uwe LENHOFF, the founder, major shareholder, and business developer of VELTYCO. Some of those non-paying companies are in VELTYCO’s Online Lottery Vertical with LOTTOPALACE as the focal point. According to the board’s press release, they owe VELTYCO €1.4 million.
The VELTYCO Verticals
VELTYCO has aligned its business into so-called verticals. In addition to the Financial Trading Marketing vertical, the company also operates a Sportsbook and Casino Vertical with Bet90 as its own brand and an Online Lottery vertical. With the prohibition of the binary options and the numerous warnings of various financial market supervisory authorities against companies and websites from the company’s Financial Trading Marketing vertical, VELTYCO’s management is obviously confronted with serious problems. VELTYCO has already admitted to the problems with banks in a very covert manner. In recent months, banks and investigating authorities have taken radical action against illegal providers of binary options and FOREX trading platforms.
Unfortunately, almost all of VELTYCO‘s revenues and cash flows in the Financial Trading Marketing Vertical are generated with illegally operating financial trading platforms.
There is perhaps no other public-listed company in the world that has received so many warnings from financial market regulators against its business and/or network (read more).
It is only because VELTYCO‘s board has not disclosed the true ownership in the VELTYCO network of companies that the public has not yet recognized the full extent of VELTYCO’s involvement. But this is only a matter of time. Today we take a closer look at the company’s lottery vertical.
LOTTOPALACE and VELTYCO
The online lottery betting provider LOTTOPALACE concentrates primarily on the German-speaking markets. According to the LottoPalace website, the business is owned and operated by ALTAIR ENTERTAINMENT N.V. (see OpenCorporates) and its subsidiary PAYIFIC LTD (see OpenCorporates).
The domain www.lottopalace.com is registered by the Maltese company SOFTLOTTO LTD (see OpenCorporates) which is owned by VELTYCO main shareholder Uwe LENHOFF. Previously, the domain was registered by ALTAIR ENTERTAINMENT, which also owns the domain www.option888.com, a banned binary options and FOREX trading platform.
The business of betting on lottery numbers is conducted with a gaming license from ALTAIR ENTERTAINMENT on Curacao. The fact that ALTAIR ENTERTAINMENT and PAYIFIC are companies associated with LENHOFF can also be found in VELTYCO’s official documentation (see for example here). From an official statement of the VELTYCO board, we know that ALTAIR ENTERTAINMENT can be attributed to Uwe LENHOFF. In addition, the LOTTOPALACE software and hosting is provided by SOFTLOTTO LTD (Malta), where LENHOFF is also the beneficial owner.
Evidently, LOTTOPALACE and its operating entities ALTAIR ENTERTAINMENT N.V., PAYIFIC LTD, and SOFTLOTTEO LTD are controlled by VELTYCO’s main shareholder and manager Uwe LENHOFF.
LENHOFF is also the Head of Business Development at VELTYCO and therefore responsible for the development of the business. VELTYCO does almost exclusively business with the other companies in the LENHOFF network. Hence, he is of course well aware of the financial situation of the entire network. As VELTYCO’s Head of Business Development, LENHOFF does de facto business with himself without disclosing it.
Uwe LENHOFF and the board members Gilles OHANA and Marcel NOORDELOOS have a veritable conflict of interest – LENHOFF does not pay the debts of his companies to VELTYCO and thus brings the listed company into financial and strategic problems.
Liquidity problems at LOTTOPALACE?
FinTelegram has received numerous complaints from LOTTOPALACE customers about non-payments. Most of the claims reported to us range from €5,000 to €30,000, but we have also received a customer claim in the amount of some €450,000, of which €110,000 has been deposited by the customer. The remainings of his account balance are contributed to lottery wins and bonus credits. Thus, we deal with several hundred thousand Euros in this case.
Unfortunately, LOTTOPALACE refuses to pay the customer even part of the money paid in and/or won. She is constantly put off. Lastly, she was once again promised that a fraction of the amount due would be made at the beginning of December 2018. The customer is now desperate and has commissioned her legal representative to file a criminal complaint. She told FinTelegram that she no longer believed in the seriousness of LOTTOOPALACE and that she considered the business a fraud.
In view of the now known liquidity situation at VELTYCO, one could conclude that LOTTOPALACE has liquidity problems.
We have already warned investors against doing business with LOTTOPALACE (the website) in the knowledge of its background. In view of the now obvious liquidity problems, we repeat and reinforce our warning. Only red flags can be raised here. Existing customers should try to withdraw their money as quickly as possible.