Motorsport Games loses unpaid wages lawsuits, ordered to pay two employees $24.6k

Earlier this year, Motorsport Games was accused by dozens of employees at its Russian office of not paying them for months. At least two of them have won their lawsuits against the company.

Motorsport Games to pay two employees over $24k after losing unpaid wages lawsuits

What happened?

  • As reported by Insider Gaming, Motorsport Games will pay $14,600 for one of the claims pending in Russia, where the employees are located. Another staffer will receive $10,000 in a separate lawsuit.
  • The Miami-based company is now also awaiting final rulings in at least two other cases. One hearing is scheduled for September 12, and another one (for eight total plaintiffs) is scheduled for September 21.
  • In January, it was reported that Motorsport Games hasn’t paid wages to its 30-person Russian team since October 2022.
  • The company offered its employees to move to a new office in Georgia, but didn’t provide any compensation for the relocation. On top of that, the new contracts were around 20% less than their previous salaries in Russia.
  • One worker even started blackmailing Motorsport Games CEO Dmitry Kozko, threatening to leak the source code for four games, NASCAR 21: Ignition, NASCAR: Heat 5, Indycar, and KartKraft.
  • However, the leak never happened, and a group of employees eventually filed lawsuits against the company.

Financial problems at Motorsport Games

  • Best known for its racing games under the NASCAR license, Motorsport Games went public in January 2021, raising $69 million at a $510 million valuation.
  • Some investors were skeptical about the company’s long-term future, given its focus on the racing genre occupied by large franchises like Forza, Gran Turismo, and Need for Speed. In June 2022, Motorsport Games even faced a possible delisting from the NASDAQ after its stock fell below the minimum price of $1 per share.
  • In its financial report for the second quarter of 2023, the company posted losses from operations of $8.9 million and revealed that it only had $1.4 million in cash remained. This could not be enough to fund its operations for the remainder of the current fiscal year.
  • As a result, Motorsport Games is currently considering selling its NASCAR license to a third-party.
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