The US operations of PlayUp are on track to be sold to a publicly listed company, the company’s global CEO tells Legal Sports Report.
Daniel Simic said PlayUp US is also going through a significant restructuring and will only bring up to seven employees to the new company. The changes in the US do not affect the larger Australian business, he said.
The unspecified listed company has the senior management to run a US sports betting operation, something PlayUp US has lacked in the past, Simic said.
PlayUp struggles to find cash
PlayUp has not had a smooth US sports betting experience so far, as it searched for a steady stream of cash.
There were claims that then-US CEO Laila Mintas sabotaged the transaction with FTX. Mintas later asserted in court filings that one of the reasons FTX was not moving forward with the deal was that she would not remain with the company.
PlayUp came close to selling again in 2022, this time by a SPAC that would take the brand public at a $350 million valuation.
The company missed deadlines to provide pertinent financial information, though, and the reverse takeover was eventually canceled.
PlayUp already talking to regulators
PlayUp is only live in Colorado and New Jersey, with both regulators aware of the impending transaction.
The transaction was originally scheduled for a June 30 finish, Simic said.
He expects an offer sheet to be signed some time this month.
Business needed changes with FTX funding over
Simic explained that PlayUp US was built with the expectation of significant funding, which almost came in a lost $450 million sale to crypto exchange FTX. The exchange, meanwhile, dealt with plenty of well-documented issues recently and is no longer operational.
“We did have big plans to launch in more states but we were funded by FTX, as you’re probably aware, and since their collapse, we’ve had to go back and re-think our strategy,” Simic said. “And that strategy is to really hone in on those states where we’re currently live now, which is New Jersey and Colorado.”
That means fewer employees, he added. The company had 38 employees six months ago and was down to 18 around June 30.
Email: PlayUp US staff unpaid
A former employee indicated to LSR that they had not been paid since June 15.
LSR viewed a screenshot of another email sent to Simic, US Chairman Dennis Drazin, and others that said there would be a termination of US operations if the two-week period ending June 30 was not paid by that date. Perhaps coincidentally, the PlayUp US Twitter account has not tweeted since June 30.
A second source confirmed to LSR that they are still owed money by the company.
Some could be sued for ‘false representation’
Simic said he is looking at each employee one by one to determine who has actually been completing their work for PlayUp.
“I’m just working through person by person to work out who’s staying on and who isn’t, and who’s been working for us for the last month and who hasn’t. Some have gone missing and don’t even respond to emails. So I don’t know if they’re owed or they’re not owed.
“I’m not willing to just hand out cash. And they’ve been taking advantage of PlayUp for however long, you know, there’s going to be a situation where PlayUp will be suing them for false representation that they’re working for PlayUp and haven’t been.”
According to the CEO, one example is person who cannot explain what they did for the last two months. Simic said even with access to their emails, he cannot tell what work the employee completed over that span.
PlayUp US ‘starting fresh’
Simic said the restructuring and new ownership means the brand is “starting fresh.”
He did not want to follow in the footsteps of Fubo or MaximBet, both of which shut down completely after their sportsbooks failed to generate meaningful share.
“Everyone, including us, focused too hard on getting as many licenses as we could and trying to take over the US,” Simic said. “We’re not a FanDuel, we’re not a DraftKings, but we can be an important player with our skillset and our knowledge of the gambling space.”
Global operations for PlayUp
According to its Australia-facing site, PlayUp “currently operate in Australia, New Zealand, India and the US. Our biggest market is Australia, where we are the largest and most recognised DFS provider in the country and one of the fastest growing fixed-odds providers.”
The company also introduced a unified platform for its Australian offerings earlier this year.
