Auditors of daily fantasy sports operator FanDuel have expressed “significant doubt” about the company’s future if more US states determine it is an illegal gambling operator.

The Edinburgh-based FanDuel recently released its annual report, which showed the company enjoyed record revenue of $87.7m in the 18 months ending June 30, 2015. However, pre-tax losses came to $94.9m, compared to a loss of only $11.3m in its previous report.

FanDuel blamed the escalating losses on its decision to “significantly” boost its marketing and product development, while insisting that the company’s financial reserves – which fell from $274m to $47.8m as of June 30 – are sufficient to see it through the coming year.

FanDuel defended its spending by noting that its paid active player base had quintupled to 1.25m by June 30, and said the investments it had made would “drive the future success and growth of the group with due consideration of the ongoing litigation issues.”