One of Scotland's leading technology firms has cautioned it might not have the ability to continue as a going issue due to legal challenges in its American market.

FanDuel was set up in Edinburgh, where much of its innovation is established.

Its head offices were moved to New York to make it more of an American firm in attracting a big US and Canadian market for fantasy sports.

It has actually become one of the two giants of that sector, together with US-based Draft Kings.

They supply an innovation platform for fans of the yohaig code four main American sports to choose fantasy teams from genuine players, and follow their efficiencies. Changes are allowed from day to day, which assists drive more traffic than dream groups which are fixed for a season, and there are considerable prizes on deal.

The fantasy sports business have come under pressure from civil cases together with state regulators and legislators, with efficient restriction on the online video games as being based upon chance instead of skill.

Facing action from legal authorities, FanDuel has actually had to wind down its activities in Texas from the start of this promotion code month and in New York State for the past 2 months.

Recently, members of the US Congress in Washington DC began an investigation into the market. And with uncertainty about its legality, the companies have dealt with obstacles from a minimum of one payment processing firm that are an essential channel to their revenue.

The audited accounts have actually just been published and state that the legal challenges cast doubt on the yohaig code continued solvency of the business.

Up until now, the limitations on its activities have only affected states which represent less than half of its earnings. Attorney general of the United States in numerous states have encouraged that dream sports are illegal, five state legislatures have passed laws to clarify the yohaig code legal position, with more expected.

But auditors warn that if there is a rise in the share of the marketplace obstructed by legal doubts, "such a possibility represents a material unpredictability that casts considerable doubt on the group's ability to continue as a going concern".

Substantial funds

FanDuel "considers itself to be operating lawfully, is presently protecting its position and therefore the directors have affordable expectations that the group has sufficient resources to continue for the foreseeable future."

The accounts state it is making contingency strategies, including a cut in variable expenses, likely to consist of marketing, advertising and reward money, in addition to postponing some operating cost payments.

The most recent accounts cover the 18 months to the end of June last year, before a blizzard of advertising and promo last autumn accentuated the scale of business, and began the legal obstacles.

During that time, FanDuel had turnover of $87.7 m (₤ 61m), up from $12m (₤ 8.3 m) in the preceding 12 months.

The variety of active gamers increased from 253,000 throughout 2013 to 1.25 m to the middle of 2015.

Between January 2014 and June 2015, it paid $102m (₤ 71m) in "service charges", and spent greatly on a strong fight to develop market share.

There was an operating loss for the 18 months to last June of $77.7 m (₤ 54m), up from $10.3 m (₤ 7m) during 2013. It continued to raise significant funds through releasing equity, and remains in discussions on further financier fund-raising.

Facing the threat of being shut down by guideline and law, the business has cut its cash balances from roughly $274m (₤ 190m) in the middle of in 2015 to less than $48m, which it states ought to be sufficient to keep it trading for an additional 12 months - presuming it is successful in its legal defence.