Here's how I understand it:
Players money is a liability owed by the company which according to the gaming license must be in a segregated account (cannot be used for expenses or invested). Basic protection implies payouts in a liquidation event would be in this order:
1) Debt holders: bond holders of corporate issued bonds, bank loans/overdrafts etc. Often debt has varying seniority. 888 has no debt. GVC (Party's parent company) has €390m or so of debt with 5-6 year maturity. It's a credit facility - essentially an overdraft - and was as part of the LBO of Party. Their debt coverage is actually pretty poor but I wouldn't be too worried if I had money on Party.
2) Any other liabilities: players funds, any money owed to suppliers (gaming licenses, software licenses, payment processors etc). I'd expect this to be done on a pro-rated basis.
3) Equity holders: If there's any money left (not too unusual but fairly unlikely here) then the shareholders get a few pennies on their shares back.
Medium protection basically suggests that you are almost 100% to get your money back in full.
investors are more likely to invest if it's 'basic' protection, with a higher chance of some return in the event of the company going into administration
This won't work. If a liquidating company has $100 in player deposits and owes no other money, you can't buy shares in the company and expect to get some of the $100. The $100 liability is paid out first.