Gaming company sues former leaders, others

Millions were looted before bankruptcy, plaintiffs allege.

A big player in Georgia’s coin-operated amusement machine industry is suing several of its former executives and managers as well as a dozen companies they allegedly used to loot the gaming business of millions of dollars before it was plunged into bankruptcy.

ARC Gaming and Technologies LLC, formerly known as Lucky Bucks LLC, filed a civil racketeering and fraud lawsuit Jan. 2. Among those accused of pillaging Lucky Bucks’s assets are founder and former owner and CEO Anil Damani, former chief operating officer Tony Kassam and former operations director Imran Ali.

“It is difficult to catalog the number of crimes and schemes that the defendants committed while systematically looting Lucky Bucks, and it is likely that the full extent of their illicit activities will never be uncovered,” the 72-page lawsuit states.

Damani, the CEO and president of Atlanta investment company 27th Investments, denies the allegations, which his attorneys described in a statement as baseless and frivolous.

“Mr. Damani is a successful businessman and a pillar of his community,” Damani’s attorneys Scott R. Grubman and Lauren A. Warner told The Atlanta Journal-constitution.

Attempts to contact the other defendants were not immediately successful.

ARC, which filed its complaint in the Fulton County Superior Court, says its claims are backed by testimony from lower-level employees who participated in the alleged scheme and decided to cooperate with the company’s new managers. Seven of those workers are identified in the lawsuit, which states that “the evidence of the defendants’ guilt is overwhelming.”

Lucky Bucks was founded in 2011 by Damani, case records show. It grew to become one of the largest companies of its kind in Georgia, holding several master licenses from the Georgia Lottery Corporation to buy, own and service coin-operated amusement machines, known as COAMS. Lucky Bucks machines can be found in more than 345 retail locations throughout Georgia, ARC said in a Jan. 5 press release about the lawsuit.

Most gambling is illegal in Georgia. Coin-operated amusement machines require a small level of skill and can be located in businesses that derive the majority of their income from the sale of goods and services, such as convenience stores. Those businesses are permitted to reward winners with store merchandise.

There are more than 30,000 COAMS in thousands of stores across the state. Georgia Lottery reported that players spent $4.8 billion on the machines in fiscal 2022, winning $3.4 billion in prizes.

In its lawsuit, ARC alleged that Damani and the nine other individual defendants used “straw men,” shell companies, and competing businesses they controlled to loot Lucky Bucks once it became clear that it was headed toward bankruptcy.

The alleged scheme was implemented after Damani was barred by Georgia Lottery in 2020 from having an active role in Lucky Bucks due to regulatory violations, ARC claimed. The state agency did not immediately respond to a request for confirmation of the alleged violations.

ARC claimed its former executives caused Lucky Bucks to borrow hundreds of millions of dollars from lenders and banks, then distributed the majority of the money among themselves. Damani allegedly received more than $50 million as a cash dividend in July 2021, when Kassam allegedly received more than $500,000.

Competing gaming businesses were also established to take lucrative customer contracts away from Lucky Bucks, ARC alleged. It claimed that those businesses used Lucky Bucks employees, equipment and resources, and in some cases sold customer contracts back to Lucky Bucks “at a massive markup.”

The individual defendants allegedly sold some of Lucky Bucks’s master licenses to the competing companies they controlled for a fraction of the licenses’ value. They are also accused of chiseling the serial numbers off some of Lucky Bucks’s COAM machines and parts and selling them in various states.

Lucky Bucks owed creditors more than $500 million by the end of 2022, according to the complaint. The company filed for chapter 11 bankruptcy in June, emerging with a reorganization plan and new management team in October.

ARC has asked the court to block the defendants from transferring, selling or hiding money and assets, and to appoint a receiver for the defendant companies. It also wants all allegedly stolen money and assets returned, including about $200 million in “fraudulent and illegal dividends,” as well as unspecified compensation.