Star Investor Carsten Maschmeyer's Lawsuit Financier Embroiled in Gambling Litigation?
Scrappy Startup RightNow Crashes, Puts the Gambling Industry in Limbo
The fintech company, RightNow, known for buying gambling-related claims at a discount and offering immediate payouts to customers, has filed for bankruptcy. The insolvency report comes after numerous gambling lawsuits stalled, potentially a significant factor in the startup's downfall.
Upfront Payout for Gambling Disputes
RightNow's business model revolved around buying gambling-related claims from customers with a reasonable chance of winning damages, as detailed by the Rheinische Post. This could include disputes over data protection violations, delayed flights, excessive health insurance contributions, or unresolved gambling losses. The startup promised to handle the claims and hand out the advance, adjusting the payment according to the likelihood of success in the court proceedings.
Despite filing for bankruptcy, RightNow's homepage still boasts a promise of "Immediate Refund for Your Gambling Losses", which experts suggest could have hastened the startup's demise, given the current standstill of many gambling court proceedings.
Court Quandary: When a Win Isn't a Win
Courts across Europe, including the Bundesgerichtshof (BGH) and the European Court of Justice (ECJ), are grappling with questions about the legality of gambling in Germany. One high-profile case involves a dispute between sports betting provider Tipico and competitor Gamesright. The ECJ is set to decide if the Malta Gaming Authority license offered a legal basis for gambling in Germany before the 2021 State Treaty on Gambling was passed.
Traditionally, these disputes were settled outside of court. Experts speculate that operators avoided a final ruling by the BGH or ECJ as it could have triggered a wave of lawsuits. However, the upcoming landmark ruling from the ECJ may influence operators' willingness to negotiate, leading to a hold on all similar proceedings until the ruling is made.
Bill No. 55: The Unbeatable Shield
Online casinos licensed in Malta benefit from the protection offered by Bill No. 55, a controversial law that safeguards them from foreign enforcement penalties. The EU Commission is scrutinizing the bill for potential violation of Union law, but it remains in effect until a ruling is handed down.
The hurdle makes it difficult for claimants from Germany to enforce any damage claims even if they successfully sue the operator. The leaked Casino Papers reveal that many online casinos operate under shell companies, making it hard to trace the responsible parties and collect unpaid debts.
What's Next for RightNow?
Although it appears the insolvency of RightNow GmbH is inevitable, its founders have already set up a new company called RN Inkasso GmbH. The focus of this new venture is not on process financing but on debt collection.
The founders have assured that all customers have been paid out, and they are actively pursuing ongoing proceedings to regain liquidity. However, the outcomes of these proceedings are uncertain due to the lack of resources to continue the legal battles effectively.
The future of RightNow remains uncertain; the company may vanish from the market in the coming weeks, or a new investor could step in. The founders remain optimistic about the business model's potential. They told the Rheinische Post: "We firmly believe in the future of the business model!"
- Given the unstoppable number of gambling lawsuits that stalled and potentially contributed to the financial difficulties of the fintech startup RightNow, the likelihood of investors showing an interest in financing the business models that involve technology and casino-and-gambling may decreases.
- The financer's question, "What's next for RightNow?" remains a pressing one, especially since the failure of the startup RightNow GmbH has led to the emergence of a new venture by its founders - RN Inkasso GmbH, focusing on debt collection.
- Despite filing for bankruptcy, the business model of RightNow, which involved buying gambling-related claims and offering immediate payouts, has caught the attention of general news outlets, highlighting the potential risks associated with investing in startups that rely on technology, business, and casino-and-gambling industries.
- The insolvency of RightNow comes at a time when courts across Europe, including the Bundesgerichtshof (BGH) and the European Court of Justice (ECJ), grapple with questions about the legality of gambling in Germany, raising concerns about the future of the online gambling industry, especially for operators licensed in Malta that benefit from the protection offered by Bill No. 55.
- Experts suggest that the promise of "Immediate Refund for Your Gambling Losses" on RightNow's homepage may have hastened the startup's demise, as the current standstill of many gambling court proceedings leaves little hope for successful legal battles to regain liquidity.
- In a bid to regain liquidity and advance their business model, the founders of RightNow have assured that all customers have been paid out and are actively pursuing ongoing proceedings, although the outcomes of these proceedings are uncertain given the lack of resources to continue the legal battles effectively.
